This month marks the one-year anniversary of How Women Invest, a sister organization of How Women Lead, which was created in 2011 to achieve equity for women by driving representation and opportunities across all aspects of life and career. How Women Invest is deeply rooted in the same mission, but with an even more focused goal: inviting women to play big and powerfully in venture by distributing investment opportunities to more high-potential, women-led companies.
Managing Partners Julie Castro Abrams and Erika Cramer saw great opportunity to utilize the power and influence of How Women Lead’s network of more than 14,000 top-tier executive women to affect change in bringing gender equity to both the founders’ and funders’ ecosystems of venture capital.
GETTING MORE WOMEN TO INVEST
With women making up just 4.9 percent of venture capital investors in the U.S., it’s clear that poor female representation is a significant deficit and as a result women have very little influence in venture. This lack of investing and leadership in venture shows up in dramatically lower funding for women founders and a whole host of egregious issues like sexual harassment and bias in traditional venture firms. While startups as a whole raised 13 percent more from venture capitalists in 2020 compared to 2019, women-led startups received just 2.3 percent of VC funding. This is why How Women Invest is dedicated to only investing in completely women-founded and led companies.
How Women Invest has a deep arsenal of resources available to women as they navigate funding or investment, often for the first time. More than 200 women in the network are subject matter experts and can help evaluate opportunities, take positions on boards, or even participate in SWAT teams to provide business development opportunities, technical support or talent acquisition leads.
How Women Invest activates women to step into investment to wield more influence in corporate governance, while propelling high-potential, women-led companies forward at scale. It strives to make the world of venture capital less intimidating by providing access to a supportive community of like-minded investors and through How Women Lead, offering highly curated training sessions that are designed for anyone from the seasoned to the first time investor.
How Women Invest chose to raise $10 million for its first fund, strategically capped for lower investment minimums to allow easier access for accredited women to invest for the first time. Since July 2020 the fund has invested in Latina female-founded fintech company HelloAlice, Black female-founded healthcare analytics company Gray Matter Analytics and Hitch, a future-of-work company focused on reducing bias and increasing equity in opportunity and development. And through the deep and highly diverse How Women Lead network, How Women Invest is able to access capital and influential connections, two of the major barriers female founders face in growing their companies. The nature of the network also provides the opportunity to build a diversified portfolio of investments when it comes to founders, industry focus and company development.
PRIORITIZING FEMALE INVESTORS OF COLOR
In fact, diversity is baked into the DNA of both How Women Lead and How Women Invest, from its investment committee to its staff and Limited Partners. In addition to investing in women-owned companies that are extremely diverse, How Women Invest also prioritizes women investors of color, of which about 50 percent participated in its first close.
“As a Latina and first college graduate in my family, I’ve always wanted to use my deep background in investment banking and investing to pay the opportunities forward by giving the power and capital to worthy female entrepreneurs so they could succeed in building their companies and growing their own wealth,” said Cramer. “There just aren’t a lot of strategic capital options for female founders, and especially women of color, which is exactly what we’re trying to change through How Women Invest.”
How Women Invest has already started to make a difference in its first year. By leveraging the How Women Lead trusted network of top executive women, they’ve brought on 190 female accredited investors starting their investing journey with first time exposure to venture capital. Oversubscribed and with a waiting list, the organization is already looking at launching its second and third funds. And those new investors aren’t just sticking with this network; their experience and confidence-building has resulted in approximately 40 percent of them making additional angel and venture investments within this last year.
“If women invested at the same rate as men, we could move 50 billion dollars into the venture ecosystem and inspire a wholesale shift in the rate of investing.” says Castro Abrams. “How Women Invest is set up to move billions of dollars of women’s wealth into high performing companies. This is game changing for our economy, job creation, and women’s board representation; a significant transfer of power, wealth and influence.”