by: Chip Hazard
Last Wednesday marked the two-week point since the launch of XFactor Ventures. We are grateful for, and a bit overwhelmed by, the support and feedback. We thought there was an unmet market need for female founders investing in female founders, but you amazed us with the volume, quality, and breadth of opportunities that have come into XFactor.
Over our first two weeks, we received 200 female-founded companies to review. Obviously, there is a huge pool of talented and creative female founders! Equally obviously, not all of these investment opportunities are going to fit with our expertise, passion or capacity, and we know that will mean we will end up missing out on some fabulous opportunities. Given we can’t do it alone, we want to make sure amazing female founders have access to as many resources as possible. As a result, we are developing an Allies list with whom we can make introductions. If you’re an angel interested in backing seed stage founders or a fund that is committed to backing women and mixed gender teams, drop us a note to email@example.com letting us know what areas (however you define it) are most of interest to you!
In reviewing these opportunities we are struck by the fact that, apart from the high-quality level, there is no such thing as a normative female founded company. While the stereotypical beauty/fashion company is a segment within our deal flow, it is nowhere near the most common. The companies we are seeing are diverse, broadly reflective of the venture industry, tech-driven and blow away the myth that female founders only start female-focused companies. Specifically, 50% are deep tech companies (Software, AI, VR/AR, Networking, IoT, Robotics, Wearables, Other hardware), 20% are e-commerce (mostly B2C, some B2B, in the pet, clothing, beauty, food and home furnishings markets among others), 12% are Biotech (even though it’s not an area of focus or expertise for us at this time) and the remaining 18% are scattered across a variety of categories including fin-tech, ed-tech, marketplaces, content and tech-enabled services.
Nor do female founders always have a female co-founder. Of the companies with co-founders, 68% have mixed gender founding teams. This reinforces our belief that diverse founding teams will have a better perspective on market opportunities, how to define and market products for the widest possible audience, will make better decisions, and be more successful in attracting and retaining talent. Interestingly, almost half of the companies have a solo-founder, and while this has always struck me as a harder path, some of the best female-founded companies (StitchFix, LearnVest and The Real Real are three examples that come immediately to mind) have followed this path, so it’s clearly not a determining factor one way or another.
On the XFactor front, since our launch we have closed 3 investments and committed to 2 others. We are extremely impressed with the quality of the first 5 female founders we are fortunate enough to support. We will follow up with details in future posts, once these companies announce their financings and plans, but the companies are in the AI (2x), Data, Cloud Platforms and Content/Community fields and we look forward to working with these teams as they take on their respective billion dollar market opportunities.
Thank you all again for the support and introductions and for all the female founders we have met for your talent, perseverance, and grit. As always, if you are interested in speaking with our team, please email us at firstname.lastname@example.org.