Happy Birthday, XFactor Ventures!
Three years ago this week, we officially launched XFactor Ventures with a bold vision to change the narrative on women’s access to capital. To do that, we knew we had to do things differently. From recruiting an investment team of incredible female founders who ourselves are in the trenches building, to throwing warm intros out the window and committing to look at everything we received at hello@xfactor.ventures, to running the fund entirely on Slack with a high-conviction investment decision making process, very few things about XFactor were business as usual. Now, three years in, we’ve grown to an investment team of 22 partners spanning across six cities with 52 companies and counting as part of the XFactor family.
It’s been an exciting journey and we can’t wait for what’s to come!
Investment Activity
We’ve invested in 52 companies, which makes us among the most active investors in companies with female founders. Virtually all of our investments are either pre-seed companies (median financing of $800K at $5.5M post-money) or seed companies (median financing of $2.5M at $10.5M post-money). We were in the round of “first-checks” in nearly 60% of our companies. As founders ourselves, we know that raising that first round is HARD. That’s why we aim to invest with conviction as early as possible.
Portfolio Stats
As a rule, all our companies have at least one female founder. Interestingly, one-third of our portfolio are solo female founders, and half have a male co-founder. 37% of our companies have non-white founders- we are actively working to extend our networks and reach into the Black and LatinX communities of founders in particular, which currently represent 13% of our portfolio. Finally, we invest in a range of sectors from developer tools, to plant-based proteins, to telemedicine to must-haves for the modern kitchen.
Investment Team
One of the original theses of the fund was that as investing partners sell their companies, they would be able to leverage their experience with XFactor as a platform to full-time venture roles and increase the number of women on the other side of the table. Alongside this, as our portfolio companies scaled, those founders could become partners with XFactor and invest in the next wave of female founders. We’re excited to see this pipeline working- XFactor Partner Aubrie Pagano recently joined Corigin Ventures and Amy Nelson, a portfolio company founder from Fund I, joined XFactor 2 as an investing partner.
Performance
It was critical to us when we started XFactor that our primary goal was to back companies that could transform industries and drive exceptional investment returns. Our median company is less than 16 months old- too early to determine results. That said, however, our best performing investment is currently valued at 9.5 times our cost basis, about 20% of our companies have already raised subsequent rounds at higher prices than we invested at (at approximately 2x our cost basis), and only 3 of our 52 investments have not worked out. So in venture capital speak, “we are off to a good start” and look forward to reporting more as our portfolio matures.
Where we go from here:
With only 12% of total invested capital going to companies with a female founder in 2019, there is still significant work to do. We’re committed to doing our part by continuing to back exceptional female founders and supporting them as they grow and scale. As we look to the future and raise additional funds, we’re confident that women will be leading the way for the next wave of billion-dollar exits.
