For female VCs bias is a branding issue

Leslie Feinzaig, a venture capitalist, likes that her venture firm, Graham & Walker, sounds like an old, stodgy law firm. But apart from the name, there’s nothing really stodgy about it: Her fund exclusively invests in female- and nonbinary-founded startups.

It’s a relatively new name for her firm, which was originally called Female Founders Alliance. Feinzaig rebranded in 2021 in an effort to attract a more diverse set of founders and check-writers into her portfolio.

“The number one risk that we fall into is inadvertently stamping our own portfolio with a diversity signal,” she said. “And I mean that in the negative context of the word: We want our founders to stand on their own for being amazing founders. So what do we need to do? We need to become a super, high-signal VC.” In her view, that meant departing from a name that made her firm sound like it was making “diversity investments” and finding a name that didn’t include gender as a brand.

Now, she said, when she enters a room, “It’s very different to be Leslie, the CEO of Female Founder Alliance, than Leslie, managing director of Graham & Walker. Nobody questions it; it sounds like it belongs.”

That said, the investor still found a way to insert the mission into the name: Katharine Graham was the first female Fortune 500 CEO, and Madam C. J. Walker was the first female self-made millionaire.

The goal of being a VC is to generate returns for limited partners, and there’s an understanding that a diverse startup ecosystem will lead to better outcomes for all. Balancing those two, for female VCs, has often manifested in different, often frustrating ways.

A new generation of female venture capitalists is ditching institutional firms to start their own or steadily rising through leadership ranks. According to a survey analyzed by TC+, the share of women represented in director and principal positions has significantly increased over the past two years, while the percentage of women in higher-level positions, such as managing general partner or senior managing director, stands below 25% and has for the past two years. The ranks are diversifying. Slowly.

To put it simply: More women in venture means that bias and strategic branding are increasingly relevant for a larger fraction of check-writers.

For female VCs bias is a branding issue by Natasha Mascarenhas originally published on TechCrunch

VCs and founders are finding life easy in the Big Easy

The good times are starting to roll in the New Orleans startup ecosystem.

TechCrunch spoke to local founders and investors for a vibe check: How is the city emerging as a tech hub? A flood of both founders and capital is entering the market; that, coupled with tax and business incentives to keep them there, makes NOLA an attractive place to start a business.

The city minted its first unicorn in 2021 when software company Lucid sold for $1.1 billion to Swedish tech firm Cint Group. That same year, Shutterstock acquired the animation studio TurboSquid for $75 million, and Procore Technologies acquired NOLA-based software construction company Levelset for $500 million.

Of course, there are a few issues NOLA must overcome for it to be a true tech hub, founders and VCs told TechCrunch: There’s a lack of technical talent, making it hard to find local people to hire. And although money has been flowing in, the city needs more capital to keep up.

VCs and founders are finding life easy in the Big Easy by Dominic-Madori Davis originally published on TechCrunch

Who’s afraid of diversity quotas?

Fashion: a sector known for influencing trends, creatives and perhaps the future of equity for Black entrepreneurs.

Last week was the second Fifteen Percent Pledge gala, hosted by the nonprofit of the same name, to honor Black entrepreneurship and the organization’s efforts to increase equity in the fashion industry.

The nonprofit stems from a callout that designer Aurora James posted in 2020, urging retailers to stock at least 15% of their shelves with items from Black-owned businesses. (This number isn’t arbitrary; Black people make up about 15% of the U.S. population.) That callout turned into a pledge, then into a nonprofit working with 29 retailers — including Yelp, Rent the Runway, Sephora and Nordstrom — that claims to have shifted over $10 billion worth of opportunities to the Black community since its launch three years ago.

The pledge has boosted opportunities for Black entrepreneurs. The foundation itself launched a Google-sponsored marketplace. At the gala, it gave out more than $250,000 worth of grants to Black businesses, a life-changing sum for many. The average Black business begins with around $35,000, compared to around $100,000 for the average white founder. Their efforts in venture capital are equally as harrowing, and most of their businesses do not survive the startup stage.

“I’m also a descendant of people who were enslaved in this country. A program like that might be the closest thing I’ll see to reparations in my lifetime.” Mec Zilla, founder

Who’s afraid of diversity quotas? by Dominic-Madori Davis originally published on TechCrunch

Women-founded AI startups see a boost in VC funding

Funding to U.S.-based AI companies with at least one woman founder has steadily increased over the past few years, according to Crunchbase data.

Last year, such companies raised $3.61 billion out of the $23.5 billion allocated in total to U.S. AI startups, or around 15.38%. That is a steady year-over-year increase. In 2021, for example, AI companies with at least one woman founder raised 13.2% of all capital raised in the sector. In 2020, that was 11.6%, and 11.5% in the pre-pandemic year of 2019. This is exciting.

Usually, in times of a venture pullback, women and people of color are negatively affected as investors retreat to the traditional networks they deem safe. Keep in mind that it’s possible that this data is slightly inflated because it counts all companies with at least one woman founder; usually, all-women teams raise much, much less than mixed-gender teams, giving way to the narrative that the presence of a man always adds — or, in this case, sustains — the value of a woman.

Women-founded AI startups see a boost in VC funding by Dominic-Madori Davis originally published on TechCrunch

AI is the next frontier — but for whom?

A few weeks ago, a founder told me it took three hours of endless clicking to find an AI-generated portrait of a Black woman. It reminded me, in some ways, of a speech I saw three years ago when Yasmin Green, the then-director of research and development for Jigsaw, spoke about how human bias seeps into the programming of AI. Her talk and this founder, miles away and years apart, are two pieces of the same puzzle.

Discussions about diversity are more important than ever as AI enters a new golden era. Every new technology that appears seems to be accompanied by some harrowing consequence. So far, AI has contributed to racist job recruiting tactics and slower home approval rates for Black people. Self-driving cars have trouble detecting dark skin, making Black people more likely to be hit by them; in one instance, robots identified Black men as being criminals 9% more than they did white men, which would be put under a new light if judicial systems ever begin adopting AI.

“As AI pervades society, it is critical for developers and corporations to be good stewards of this technology but also hold fellow technologists accountable for these unethical use cases.” Isoken Igbinedion, co-founder, Parfait

AI ethics is often a separate conversation from AI building, but they should be one and the same. Bias is dangerous, especially as AI continues to spread into everyday life. For centuries, doctors once judged Black people on criteria now deemed racist, with one prevalent belief being that such people experienced less pain. Today, algorithms discriminate against Black people; one study from 2019 found that an algorithm used by U.S. hospitals “was less likely to refer Black people than white people who were equally sick to programs that aim to improve care for patients with complex medical needs.”

Right now, bias appears in various AI subsectors, ranging from investment to hiring to data and product execution, and each instance of bias props up others. Eghosa Omoigui, the founder of EchoVC Partners, told TechCrunch that though AI can be “incredibly powerful,” society is still far from “flawless” artificial intelligence.

“This means that the likelihood of AI bias in outcomes remains high because of the excessive dependencies on the sources, weights and biases of training data,” he said. “Diverse teams will prioritize the exquisite understanding and sensitivity necessary to deliver global impact.”

Omoigui’s brother, Nosa, the founder of ESG compliance regulator Weave.AI, reiterated that point. Many of these models are black boxes, and creators have no particular insights into the inner workings of how a prediction or recommendation is achieved, he said. Compared to Wall Street, AI is practically unregulated, and as the level of governance fails to match its growth, it risks going rogue. The EU proposed steps to reduce and account for bias in AI-powered products, with some pushback, though the proposition itself puts it slightly ahead of where the U.S. is now.

In fact, Eghosa said many investors don’t care or think about diversity at all within AI and that there is a groupthink mentality when it comes to machine-led capabilities. He recalled the reactions investors gave him when he helped lead an investment round for the software company KOSA AI, which monitors AI for bias and risks.

“Quite a few investors that we spoke to about the opportunity felt very strongly that AI bias wasn’t a thing or that a ‘woke product’ wouldn’t have product-market fit, which is surprising, to say the least,” Eghosa said.

AI is the next frontier — but for whom? by Dominic-Madori Davis originally published on TechCrunch

Product profile: Talking about women in STEM with Ketaki Vaidya

As the new year begins, it’s a time for self-reflection and improvement both in your career and personal life. In this Product Profile, we speak with Ketaki Vaidya, Product Manager, at technology platform Oracle to discuss working in tech as a woman, and initiatives are being introduced to address inequality.  [...] Read more »

The post Product profile: Talking about women in STEM with Ketaki Vaidya appeared first on Mind the Product.

All Raise CEO steps down again

Less than a year after assuming the role, All Raise CEO Mandela SH Dixon has stepped down from her position at the nonprofit. The entrepreneur, who previously ran Founder Gym, an online training center for underrepresented founders, said in a blog post that the decision was made after she realized “being in the field working directly with entrepreneurs everyday” is her passion. Dixon said that she will be exploring new opportunities in alignment with that.

Her resignation is effective starting February 1st, 2023. She will remain an advisor to the Bay Area-based nonprofit.

This is the second chief executive to leave All Raise since it was first founded in 2017. In 2021, Pam Kostka resigned as the helm of the nonprofit to rejoin the startup world as well; Kostka is now an operator in residence and limited partner at Operator Collective, according to her LinkedIn. With Dixon gone, Paige Hendrix Buckner, who joined the outfit as chief of staff nine months ago, will step in as interim CEO. In the same blog post, Buckner wrote that “Mandela leaves All Raise in a strong position, and I’m grateful for the opportunity to continue the hard work of diversifying the VC backed ecosystem.”

Dixon did not immediately respond to comment on the record. It is unclear if All Raise is immediately kicking off a permanent CEO search.

The nonprofit has historically defined its goals in two ways: first, it wants to increase the amount of seed funding that goes to female founders from 11% to 23% by 2030, and, second, it wants to double the percentage of female decision-makers at U.S. firms by 2028.

In previous interviews, Dixon said that the company will work on creating explicit goals around what impact it wants to have for historically overlooked individuals. The data underscores the challenge ahead. Black and LatinX women receive disproportionately less venture capital money than white women; non-binary founders can also face higher hurdles when seeking funding, as All Raise board member Aileen Lee noted in the blog post.  The nonprofit has created specific programs for Black and Latinx founders but has not disclosed a specific goal for the cohort yet. These disconnects can be lost if not tracked. All Raise’s last impact report was published in 2020 and they’re working on bringing that analysis back, Lee tells TechCrunch in an interview.

“All Raise is in great hands with Paige as interim leader and we’ve got a lot of exciting things that we’re shaping and scaling,” Lee said. “We have to all continue to link arms to try and continue to make improvements for our industry…we’ve made good progress that we can’t let up.”

Since launch, the nonprofit has raised $11 million in funding, and opened regional chapters in New York, Boston, Los Angeles, Chicago, DC and, soon, Miami.

All Raise CEO steps down again by Natasha Mascarenhas originally published on TechCrunch

Funding for Black founders remains dismal — where do we go from here?

Last week, TechCrunch reported that Black founders in the United States raised 1% of the $215.9 billion in venture capital allocated last year. That is not to be confused with the 1.3% raised in 2021, the 0.8% they pulled in 2020, the 1% they got in 2019 or the 1.1% raised in both 2018 and 2017, according to Crunchbase data.

In case it’s not obvious why these figures are so dreadful, it’s worth noting that Black Americans make up more than 13% of the population.

Each time these numbers are published, there are always a few people posing the same question: Where do we go from here? Is the next step looking at alternative funding, or is it staying on the battleground, always ready to fight?

It’s stunning that, always in the quest for equality, separation is always the safe place in America. Separate schools, separate neighborhoods, separate hair care aisles, separate funding tracks.

Brandon Brooks, a founding partner at Overlooked Ventures, said this is the time to get creative with funding and pointed toward Small Business Development Centers and grant programs as a way to get by.

James Oliver, the co-founder of the app Kabila, cosigned that, saying it’s time for Black founders to be scrappier than ever to get funding. “Period,” he told TechCrunch.

Oliver, who is based in Atlanta, is leveraging relationships to raise a pre-seed and angel round by tapping into local resources, such as the Atlanta Tech Village, and is also raising “founder rounds,” in which other founders invest in his company.

“It generally sucks being a Black founder fundraising right now,” he continued, adding that he once had an investor who funded early-stage companies pass on his idea because he didn’t have a built product. (Typically, these investors back ideas, not products.) “When your back is against the wall, that is when you find out what you’re made of. Leverage your relationships, give first to others, which unlocks giving to you, and let’s get scrappy, y’all.”

Funding for Black founders remains dismal — where do we go from here? by Dominic-Madori Davis originally published on TechCrunch

Natives Rising wins backing to help Native Americans into tech and startups

According to the National Center for Education Statistics, Black, Latina, and Native American women represent approximately 16 percent of the total US population, but make up only 4 percent of students obtaining bachelor’s degrees in computing. On this trend, women of color receiving computing degrees will not double until 2052 — by which time they would be an even smaller proportion of all graduates. And out of this data emerges the fact that Native American women are the least likely to benefit from the wealth and opportunity of the tech industry, and of those obtaining computing degrees, only 0.1% of them are Native women.

So it’s perhaps appropriate that over this past weekend, a new nonprofit community organization comprising of a large network of Native Americans in tech has had a big boost.

Natives Rising has now received grant funding to support and grow the number of Native American women graduating college with computing degrees, as well as provide a path towards entrepreneurship.

The grant was from the Reboot Representation Tech Coalition, a group of 21 tech companies which aims to double the number of Black, Latina, and Native American women receiving computing degrees by 2025, by making philanthropic investments in relevant programs.

Natives Rising now aims to recruit Native women to join the tech industry, plus provide scholarships, mentors, education, and workplace opportunities.

In a statement Dwana Franklin-Davis, CEO, Reboot Representation said: “Building culturally relevant education and pathways can build bridges by showing Native American students how tech relates to their experiences. We’re proud to partner with Natives Rising to create vibrant, viable pathways in tech.”

Currently, only 3 percent on college-level programs get philanthropic funding whereas 66 percent is spent on K–12 programs, showing a wide gap where an untapped opportunity exists.

Natives Rising also runs the Natives Rising Founders Circle as an incubator for Native founders, especially founders interested in venture capital funding.

Danielle Forward, CEO, Co-Founder of Natives Rising added: “Native Americans are the most impoverished group in the US, a vestige of intergenerational, systematic disenfranchisement. They are also being hit the hardest by inflation right now, as a result. While the tech industry is slowing down on hiring, tech jobs remain one of the most economically empowering, in demand job opportunities of the future, especially for those who desire remote work.”

Prior to Natives Rising, Forward (Cloverdale Rancheria of Pomo Indians) was a Product Designer for 5 years at Meta. Co-founder and Chief Impact Officer Betsy Fore (Turtle Mountain Chippewa) joined after previously co-founding Wondermento and Tiny Organics. Hannah Cirelli (Quechan Tribe of Fort Yuma) joined as co-founder and Chief Community Officer, in addition to her current role in diversity at Uber.

Natives Rising is a nonprofit organization with Indigenous community members spanning over one hundred tribes. While focused on the US, the organization has developed an international following to economically empower Indigenous communities through tech careers and entrepreneurship.

Natives Rising wins backing to help Native Americans into tech and startups by Mike Butcher originally published on TechCrunch

Female Invest acquires sustainability-focused investment platform Gaia Investments

When Female Invest launched in 2019, it did so with the goal of creating a community where women who wanted to invest in the stock market, but weren’t sure where to start, could gain the knowledge and confidence to take the plunge. Now, its users will be able to do so all within the Female Invest platform.

The Copenhagen-based startup announced the acquisition of fellow Danish fintech Gaia Investments this week with plans to integrate the trading platform, which focuses on investing in companies with sustainability goals, into its app. The purchase price of Gaia was undisclosed, but the startup raised at a $3 million valuation, three months prior to the transaction, Female Invest told TechCrunch.

For Female Invest co-founder and partner Camilla Falkenberg, adding the ability to invest directly through Female Invest is a great next step for the subscription edtech platform.

“Since day one, we have always been very focused on building the features and products that were requested by our community,” Falkenberg said. “And we get requests every day for the possibility to trade directly through us.”

She added that she thinks the platform gets that request so often because its users trust it. A recent survey of customers found that 96% of them would trust Female Invest with their money more than their bank.

Female Invest has spent the last year building up the company in a way to more easily integrate trading, too. Falkenberg said since they raised their $4.5 million seed round last November, they’ve built out an app, expanded their tech team and raised an additional $3 million in funding.

But when they came across Gaia Investments in July, they realized it might make more sense, and save time, for Female Invest to partner with an existing trading platform as opposed to building their own.

“Gaia has a strong brand here in the Nordics and such a strong focus on ethics and sustainable investing, something we are also very interested in,” she said. “As the talks progressed, it became more and more clear it was a great move for us.”

The team at Gaia felt the same way, Mads Sverre Willumsen, a co-founder and CTO told TechCrunch.

“We knew Female Invest and saw the journey they had been on in the past three years,” he said. “After we talked and saw we had alignment, the decision was not that difficult.”

The two companies also shared similar founding stories — both looked to create an investing product that they felt was needed and didn’t exist.

For Female Invest, it was in 2019 when the founders realized there wasn’t a good resource that taught women how to start investing. For Gaia, it was when co-founder and CEO David Bentzon-Ehlers’s mother asked him in 2020 if there was a safe place to invest in sustainable companies, and his realization that the platform she was looking for didn’t yet exist.

While it isn’t super common for startups to get acquired so early in life — Gaia had just completed a TechStars accelerator program a few months earlier — Sverre Willumsen said the transaction made sense for Gaia because they were more interested in expanding the reach of their product than being startup founders.

“I didn’t become a founder in the first place to be a founder,” he said. “I did it because it was an opportunity to make a lot of innovation and a difference for people quite quickly.”

The current Gaia users will be offloaded — with their money returned in full — in the near future as the platform starts to integrate into Female Invest. Falkenberg said from there they don’t have a specific launch date yet for Female Invest users, but that the ability to trade will launch first in the European Union and in the U.K. after that.

Consolidation of early-stage startups has been a rising trend this year, and as the fintech sector has struggled in 2022’s uncertainty, it seems wise that some of these smaller companies will combine to avoid getting left behind. I’m sure we will start to see more of this heading into next year.

For Female Invest though, the long-term plan, regardless of market conditions, is all falling into place.

“Our vision is to create an extremely user-friendly, and easy to navigate, platform with a focus on sustainability to invest in the values that matter to them,” Falkenberg said. “We have a very loyal user base who is just waiting for us to launch the next product which is a great starting point.”

Female Invest acquires sustainability-focused investment platform Gaia Investments by Rebecca Szkutak originally published on TechCrunch