This summer, How Women Invest LLC (HWI) announced Fund I, a $10 million venture fund subscribed predominantly by female investors, over half women of color, who aim to disrupt the antiquated, unequal landscape of the venture capital system that typically excludes women startup founders. The new fund provides capital, mentoring and a network of influential women leaders to support female startup founders, especially women of color. The first close of $5 million was achieved in four months and the Partners credit the fund›s success to what they call their ultimate differentiator, a vast network of professional, collaborative and community-driven women leaders representing board directors, C-suite, and senior executives.
Data Shows VC Funded, Women-Led Startups Have Better ROI Research shows that greater diversity yields higher returns. Startups with a female founder generated 78 cents of revenue for every $1 of funding, while male-founded startups generated 31 cents, according to a Boston Consulting Group (BCG) study of 350 startups. Private technology companies led by women are more capital-efficient, achieving 35% higher ROI, and, when venture-backed, 12% higher revenue than startups run by men, according to the BCG study.
Julie Castro Abrams, Managing Partner at HWI and founder of sister organization How Women Lead, says, “The goal of the How Women Invest venture fund is to provide the starter fuel and support to propel fearless women startup founders to growth and victory. Research by Pitchbook shows that only 2% of all venture dollars are allocated to women-led, women-owned startups. This leaves most women entrepreneurs out of the venture system. With HWI, we aim to change this imbalance.»
Erika Cramer, Managing Partner at How Women Invest, says, “We started the fund to back our strong belief that the current venture landscape demands a new investment approach and business model — a 2.0 of gender lens investing. Our mission is two-fold. We are committed to bring more women investors from diverse backgrounds to the decision table and to support more female founders creating sustainable change in the venture landscape.” As a first generation American and the first in her family to complete a four-year college degree, Cramer wants other women to have the opportunities she has had and, hopefully, with an easier path. Cramer is investing in the fund with proceeds from her own liquidity event — the sale of her interest in a women-owned investment banking boutique, now an affiliate of Raymond James.
Women investing in the How Women Invest venture fund believe there is enormous opportunity to identify female founders with creative solutions, an opportunity often missed by traditional venture capitalists. This community of powerful women want to change the world by funding female founders who are disrupting systems, technologies, industries, services and products.
How Women Invest, sister organization to How Women Lead (HWL), is deeply rooted in HWL’s mission to disrupt the antiquated and unequal landscape impacting women. Living by the CREDO established in the HWL community, How Women Invest is dedicated to shifting the venture capital landscape by supporting women-led companies, with a focus on women of color. The organization›s mission is to inspire a community of 1,000 first-time female investors by the end of 2020, launch Fund I (a $10 million venture fund for up to 249 limited partners), and create an infrastructure to enable women of all backgrounds to support under-represented and under-capitalized female founders. The fund systematically leverages its diverse community and limited partnership for deal sourcing, industry knowledge, domain expertise and more.
For more information, visit howwomeninvest.com.
