BBG Ventures just closed on $50 million to fund more women-led startups

BBG Ventures, a now eight-year-old, New York-based seed- and early-stage venture firm that only backs founding teams which feature at least one woman, just locked down $50 million in capital for its third fund, a major leap over its first two funds, both sized at $10 million.

One determining factor in the bigger fund is that BBGV, formerly backed exclusively by AOL (now Verizon Media), now has a broader pool of institutional and individual investors, including the State of Michigan Retirement Systems, the George Kaiser Family Foundation and Verizon Ventures, along with Poshmark cofounder Tracy Sun, ClassPass cofounder Payal Kadakia, and venture capitalists Aileen Lee, Theresia Gouw, and Jennifer Fonstad.

The young firm also has a track record to which to point. Though an investment in the coworking space The Wing may have taken an unexpected turn, hurt by a national lockdown and internal turmoil, other bets have been growing, including the e-commerce platform Zola; the feminine hygiene brand Lola; and Spring Health, a mental health benefits platform for employers that recently closed on $76 million in Series B funding led by Tiger Global Management.

That’s saying nothing of the vast and underserved opportunity to invest in women-led teams that BBGV’s founders, Susan Lyne and Nisha Dua, believe most venture firms still don’t fully appreciate.

We talked earlier today about why that is with Lyne, who is a former ABC president, former Martha Stewart Living CEO and former CEO of AOL Brand Group; and Dua, who is a former lawyer, management consultant, chief of staff to Lyne, and founder. Our conversation has been edited for length.

TC You’ve raised $50 million. What size checks will you be writing? Are you looking to take bigger positions or do you have a more diverse approach?

ND: We’re looking at writing $500,000 to $1 million checks. We look for 7.5% to 10% ownership, and we’re open to co-leading, but we prefer to lead. We’ve been leading rounds already with this with this fund. We’ll likely do about 30 companies from the fund, backing a mix of pre-seed and seed-stage startups, with reserves for follow-on funding.

SL: We’ve actually done 11 investments; we started investing after the first close.

TC: You’ve invested in nearly 80 startups over the years. What has been your biggest investment to date?

ND: Planet Forward, which was founded by Zume cofounder Julia Collins.

TC: Have you — or would you — ever form a special purpose vehicle to invest more in a startup than your fund enables?

SL: We didn’t do it for our last funds, but we did our first SPV for this fund, in a company called Starface, which is skincare company that takes a very different approach to the acne problem. You’ve probably seen the gold stars [that its customers apply to their pimples] on social media. They’ve been growing very fast and did a Series A recently and we took part of it ourselves but we also opened an SPV for one of our LPs.

TC: What themes interest you right now?

SL: We’ve done a lot of investing thus far in health and well being. That’s our largest category. The second is the future of work and education; the third is climate-friendly commerce; and the fourth is really underestimated, or emerging consumers. In all of those areas, we have actually found there are many, many, many female founders who are active and building great companies

ND: Also, we [have historically] described ourselves as a consumer fund, but we are doing more B2B in this fund, where we think that the B2B approach could solve a bigger consumer problem, including for many millions of consumers.

TC: What’s an example of what you mean?

SL: Grayce, which is doing eldercare and actually selling to employers as an employee benefit. If you look at the cost to companies because of the number of hours and days that many people invest in taking care of an aging parent or trying to figure out what the next step is for them [you appreciate the need for this kind of service]. This platform not only allows you to connect with someone who can help you plan but also points you to the resources you need, including financial resources, legal resources, and living resources.

ND: Another is Full Harvest, a marketplace and logistics platform that takes all the excess food on a farm that doesn’t meet cosmetic standards and resells it to juice and salad makers and other food brands and manufacturers.

TC: You mentioned Julia Collins. Do you know how many first-time founders you’ve backed versus repeat entrepreneurs?

ND: There’s a mix. We don’t have a preference.

TC: Do you have a geographic focus?

SL: I would say, New York City is definitely our primary source for for companies for a lot of reasons, including that there’s a very rich and active female founder community here. This is the headquarters for many different kinds of industries, so you get a range of talent here. But we’ve also invested in San Francisco companies, companies in Los Angeles, in Milwaukee, in San Diego. [We see] opportunity in at least a dozen cities across the country.

TC Have have your syndicate partners changed over time, if at all?

ND: That’s been one of the most exciting things of the past few years. We love to partner with women GPs — folks like Kara Norton of Upfront Ventures and Jess Lee of Sequoia. There is a great spiderweb of women GPs emerging at these top venture funds who can create these strong relationships and are ultimately leads for follow-on rounds.

TC: Do think women-led teams are receiving the valuations they would if they were all-male teams? I was horrified to read earlier today that the wage gap between men and women has improved by 8 cents over the last 25 years. 

SL: I can’t speak authoritatively about whether women are getting lower valuations across the board. We certainly know that they are getting a vastly lower percentage of the venture capital investment. If you look at the stats about the amount of funding for women in 2020 versus men, it’s definitely disturbing and shows the vast majority of venture capital is still going to all all male teams. I think some of that is due to the megarounds that we’ve seen, but not enough of it to make a significant difference.

ND: I think it was Harvard Business Review that did some really interesting research at a [2017] TechCrunch Disrupt event that overwhelmingly suggested that men are judged on their potential and women are often judged on their current expertise, and we [might] surmise that [these factors] could have something to do with valuations.

It’s why we’re leading rounds. We see the opportunities that these female-led teams are going after — and we have the opportunity to assess them on their exact merits.

The Wing co-founder admits the co-working space upheld ‘the kind of social inequality we set out to upend’

Audrey Gelman, the former CEO of The Wing who resigned in June, today posted a letter she sent to former employees of The Wing last week. In it, Gelman apologized for not taking action to combat mistreatment of women of color at The Wing. She also acknowledged that her drive for success and scaling quickly “came at the expense of a healthy and sustainable culture that matched our projected values, and workplace practices that made our team feel valued and respected.”

That meant, Gelman said, The Wing “had not subverted the historical oppression and racist roots of the hospitality industry; we had dressed it up as a kindler [sic], gentler version.”

Here are some other highlights from her letter:

  • “Members’ needs came first, and those members were often white, and affluent enough to afford The Wing’s membership dues.”
  • “White privilege and power trips were rewarded with acquiescence, as opposed to us doubling down on our projected values.”
  • “When the realization set in that The Wing wasn’t institutionally different in the ways it had proclaimed, it hurt more because the space we claimed was different reinforced the age-old patterns of women of color and especially Black women being disappointed by white women and our limited feminist values.”

A public apology from Gelman and The Wing COO Lauren Kassan is just one of the demands from members of Flew the Coup, a group of former staffers at The Wing. Another demand is for The Wing to drop the non-disclosure agreements in their contracts.

“Collectively, we have faced racism and anti-LGBTQIA rhetoric from management, HQ staff, and members,” the group wrote on Instagram back in June. “We have faced physical and psychological violence within the various Wing locations, and discrimination when attempting to move up within the company.”

The group went on to say that while The Wing was built on the idea of being a safe and inclusive place for women and non-binary folks, “we have continuously seen the exact opposite of this mission.”

The Wing has raised $117.5 million from a number of investors, including New Enterprise Associates, AlleyCorp, Sequoia Capital, Serena Williams and Kerry Washington. At TechCrunch Disrupt, Washington told me a bit about how she felt about the drama at The Wing.

“Well, you know, I’m not new to scandal, so there’s that,” Washington said. “I was and I am really deeply still inspired by the original vision of the company. And, I think like a lot of companies in this time, because of the several pandemics that we’re facing, whether it’s our awareness around racial injustice, or COVID, lots of people are in a moment of recalibration and self-reflection. So I think that there is incredible space to improve the dynamics. And as somebody who’s an investor, as a woman of color, it’s important to me that there is increased transparency and also accountability.”

Over the past few months, Washington said her role as an investor has been “really just supporting leadership in this transition,” as well as expressing to those leaders a “deep desire” for transparency and accountability.

The Wing, like many other tech companies, struggled during the COVID-19 pandemic. In April, The Wing laid off or furloughed “the majority” of its workers, the company said. Then, in July, The Wing laid off another 56 people.

As part of Flew the Coup’s organizing, it’s also raising money to help support people who were laid off from The Wing. As of today, the group has raised more than $15,000 for its grant program. Its goal is to raise $100,000.

We’ve reached out to The Wing and will update this story if we hear back.

Kerry Washington explains why she became a startup investor

“Scandal” and “Little Fires Everywhere” star Kerry Washington won her first Emmy Award yesterday, but when she joined us at TechCrunch Disrupt today, she was much more focused on her work as an investor.

Washington traced much of her interest in technology to the premiere of “Scandal” in 2012. It had, she said, been “almost 40 years since a Black woman was the lead on a network drama,” which meant that the pressure was high — and that “Scandal” was considered a “bubble show,” with the network “taking a big risk by putting a Black woman in the lead.”

So Washington said she drew on her experience as a volunteer with Barack Obama’s presidential campaigns in 2008 and 2012, and particularly her work with social media organizing, to try to rally support.

“From the very beginning of that show, we leveraged the power of technology to support the show in ways that traditional media wasn’t supporting us — or was waiting to see what the public response would be,” she said. “Really, I think the Twitter-verse allowed us to have a second season, and then we kind of took off from there.”

As for how that led to investing her own money into startups, Washington suggested that she wanted to be more involved.

“When it comes to my engagement with any sort of any creative relationship that I’m in, I’m not really good at having a seat at the table without a voice,” she said. For example, she noted, “I gravitated very quickly in my career …  toward being a producer.”

Similarly, she said that using tech tools was exciting, “but figuring out how to have more stake, more input, more creative voice, more ability to impact the technology itself was really exciting for me.”

Washington’s first investment was in female co-working space The Wing. which she explained as being part of her commitment to “ideas of inclusivity and community, celebrating identity in a really inclusive way, supporting women’s voices, supporting marginalized voices.”

The Wing has seen its share of success, but also controversy, with a New York Times article reporting that a number of employees (particularly women of color) felt that they had been mistreated. In the wake of these criticisms, CEO Aubrey Gelman departed this summer.

When asked about her response to the controversy, Washington said, “As somebody who’s an investor, as a woman of color, it’s important to me that there is increased transparency and also accountability.” She said that over the past few months, her role as an investor has been “really just supporting leadership in this transition,” while also expressing a “deep desire” for that transparency and accountability.

Other investments include Community, which allows celebrities to manage text message conversations with fans. (Washington promised that if you text her, she will really be the one who responds — though she also asked for patience, since she’s texting with “thousands and thousands of people.”) There’s also direct-to-consumer teeth-straightening startup Byte, which Washington said she uses herself.

As for her dream startup, Washington said she has a not-yet-announced investment in a direct-to-consumer fashion startup, “and it feels really dreamy at the moment.”

Again, these have all been personal investments so far. Would Washington consider raising a fund or joining a venture capital firm?

“I have considered it, but at this point, I really like having the more intimate and really hands-on relationship with the investments that I’ve made,” she said. “I feel like I’m really able to be in the trenches and bring more value as an individual investor.”

The Wing poaches Snap’s comms director

Women-focused co-working space The Wing has hired Rachel Racusen as vice president of communications. Racusen has been the director of communications at Snap, the developer of Snapchat, since late 2016.

Racusen’s exit represents the latest in a series of departures at the “camera company.”

Earlier this year, the company’s chief financial officer Tim Stone stepped down. Shortly after, The Wall Street Journal reported that Snap had fired its global security head Francis Racioppi after an investigation uncovered that he had engaged in an inappropriate relationship with an outside contractor. Snap CEO Evan Spiegel reportedly asked the company’s HR chief Jason Halbert to step down as a result of the investigation’s findings.

Racusen worked under Snap’s chief communications officer Julie Henderson, who had joined late last year from 21st Century Fox.

Racusen has a history in politics similar to several other executives at The Wing. Ahead of her Snap tenure, she served as the associate communications director under President Barack Obama . Before that, she was a vice president at MSNBC and the public affairs firm SKDKnickerbocker, where The Wing co-founder and chief executive officer Audrey Gelman worked prior to launching her business.

Four months after closing a $75 million Series C, The Wing is making two other key additions to its management team. The company has brought on Nickey Skarstad as vice president of product and Saumya Manohar as general counsel. Skarstad joins from Airbnb, where she was a product lead on the Airbnb Experiences team. Saumya Manohar spent the last three years as Casper’s vice president of legal.

Backed by Sequoia Capital, Upfront Ventures, NEA, Airbnb, WeWork and others, The Wing has raised more than $100 million to date.

“We’re thrilled to be bringing this group of seasoned and talented women to build out our executive team,” Gelman said in a statement. “The Wing is the perfect home for leaders who thrive on fast growth and want to combine their social values with their work practice.”

Women’s co-working space The Wing adjusts membership policy to allow all genders

The Wing opened its doors to entrepreneurial women in New York City in 2016 with the support of about $2.5 million in seed funding, marketing itself as a place for women of diverse backgrounds to meet and do work. Now, as it officially amends its membership policy to allow all genders — yes, men included — it will have to work harder to stay true to its promise and purpose: to create a feminist co-working empire.

In two years, The Wing built a committed social media following and launched an in-house magazine and an online store offering merchandise adorned with third-wave feminist catchphrases. It established additional co-working spaces in New York, Washington, DC and San Francisco and entered into financial agreements with high-profile venture capitalists. Just three weeks ago, The Wing company announced a $75 million Sequoia-led Series C funding that more than doubled the New York-based female-founded startup’s previous valuation to $375 million, according to PitchBook.

While The Wing grew its community of female-identifying members to more than 6,000, debates surrounding its anti-male doctrine sprang up on and off the internet. Men aren’t allowed in The Wing — is that legal? Many questioned. No, probably not. Why? Because as much as The Wing disguises itself as a social club, it’s technically too large to benefit from laws that actually permit those sorts of groups to practice gender discrimination, according to a Jezebel report. So yes, male-only social clubs were able to thrive for decades because they were lean — small enough to legally discriminate. Still, there’s no reason The Wing needed to bar men from accessing its properties and resources, other than the fact that there have been protected male safe-havens promoting business and entrepreneurship for a very long time, while female-focused rooms of that sort have been few and far between.

Thought pieces were written, Tweets were sent and the New York City Commission on Human Rights opened a “commission-initiated investigation,” which is still ongoing, according to The Wing. Then a man by the name of James Pietrangelo filed a $12 million lawsuit against The Wing alleging its “illegal discrimination against men … was/is egregious: brazen, flagrant, intentional, willful, wanton, actually malicious, motivated by evil and ill-will, deliberately oppressive, outrageous, and willfully and callus disregardful of the rights of men.”

Pietrangelo takes issue with essentially every piece of The Wing’s DNA: its slogans, decor, schemes and employees. “The Wing’s brazen attitude towards the law and the civil rights of men can be summed up by one of The Wing’s own favorite slogans: “Girls Doing Whatever The F*ck They Want,” the lawsuit states.

“Of the 53 corporate and/or front-of-the-house positions, identified on the wing’s About page of its website, all 53 are women — arguably a statistical impossibility if the wing is not discriminating based on sex and/or gender-identity,” it continues.

Now, The Wing says it’s altered its membership policy to allow access to anyone, as first reported by Insider. The company, however, said the transition has been planned for some time and is not a result of the ongoing lawsuit: “The membership policy was codified and adopted before the lawsuit,” a spokesperson for The Wing told TechCrunch.

Keychains for sale on The Wing’s online shop.

“Gender identity and gender presentation are two distinct concepts and do not always align,” co-founder and chief executive Audrey Gelman wrote in a letter to members announcing the policy amendment. “To that end, we’ve made some internal updates and adopted written membership policies to ensure that our staff is trained not to make assumptions about someone’s identity based on how they present, or to ask prospective members or guests to self-identify. We initiated these trainings and policies so that we can continue to build a community that reflects our values and pushes us all to be more inclusive.”

As for how new membership policies will change The Wing’s female-friendly environment and community of women, that’s to be determined. The company is still figuring out just how it will ensure any new members believe and respect its mission of promoting women.

Ultimately, The Wing’s decision to open up membership is good business. Given that it is a space meant for entrepreneurs to get work done, it makes sense that it would be inclusive of all genders, as women and non-binary folk often build businesses with cisgender males, too. The Riveter, another female-focused co-working startup, has allowed men in from the very beginning for that very reason.

“I don’t think the future is female, I think the future is fluid,” The Riveter founder and CEO Amy Nelson told TechCrunch last month. “Gender is becoming an outdated idea but at the same time, it’s important to think of women when we build these spaces … There is a lot of value to women’s only spaces but our take on it is we want to redefine the future of work for women and we want everyone to be part of it.”

Despite demonstrating a certain brand of millennial feminism that isn’t inclusive or appealing to all, The Wing has been very blatant about its diversity and inclusion efforts since its beginning. Sure, it’s learned and adapted along the way, but considering the dearth of attempts in Silicon Valley to create safe spaces for women or to fund women’s businesses, The Wing’s efforts to promote women should be encouraged rather than torn down.

The Wing, a co-working space for women, opens its doors in San Francisco

Women-focused co-working space The Wing has made its way to California, opening its first of two planned locations in the state this morning.

On Sansome Street in San Francisco’s Financial District, The Wing hopes to attract professional women able to shell out $215 per month for access to its 8,000-square-foot workspace, which is complete with conference rooms, a cafe, a library stocked with books on feminist theory, a lactation room and more.

In addition to its chic decor and feminist messaging, The Wing is also known for its programming. Headquartered in New York City, where the company operates three of its four existing spaces, The Wing has hosted events with former Secretary of State Hillary Clinton, actress Jennifer Lawrence and New York Senator Kirsten Gillibrand, to name a few. The San Francisco location will be no different.

A spokesperson for The Wing tells me they have a fully booked calendar of politics, tech, entertainment and lifestyle-focused events prepped for members. In the first month, San Francisco Mayor London Breed will stop by, as will Democratic House Minority Leader Nancy Pelosi and Oakland Mayor Libby Schaaf.

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As a brand founded by women — Audrey Gelman and Lauren Kassan — and inspired by the women’s club movement of the 19th century, The Wing and its majority female staff very carefully and skillfully practice what they preach. In building their spaces, for example, they hire female architects to design and perfect the location. Their conference rooms are named for notable women. One, in particular, named for Dr. Christine Blasey Ford, stands out.

The dozens of art pieces scattered throughout The Wing are by female artists. The menu at The Wing’s cafe, which has a sign above it that reads “I’ll have what she’s having,” showcases women of the Bay Area’s food and beverage industries. Even the wines served at The Wing are made by female wine makers in California.

If there’s on thing about The Wing that stands out, it’s the startup’s attention to detail.

Founded in 2016, The Wing plans to open its next location, in West Hollywood, in early 2019.

The Wing is backed by venture capital firms NEA, Kleiner Perkins, Forerunner Ventures and BBG Ventures, as well as co-working unicorn WeWork. It has raised just over $40 million to date to expand its co-working spaces throughout the U.S. and beyond.

“The Wing answers a desire by women to connect with each other in an environment that aims to promote learning and camaraderie,” Forerunner’s Kirsten Green told TechCrunch. “It’s both a timely and timeless need. With so much focus on entrepreneurship and start-ups here in the Bay Area, The Wing offers the community that many independent women are looking for and can benefit from.”