Letter from Founding General Partner
September 1, 2015
I think everyone should strive to figure out what their purpose is on the planet and how to create value with their experiences and skills. It’s a question I have been asking myself for a long time, and for me, my purpose has come together with the formation of True Wealth Ventures.
True Wealth Ventures is a venture capital fund designed to invest in women-led companies that will design, develop, go to market and scale consumer health and sustainable products and technologies to more efficiently address and solve the next generation of challenges. If this sounds like a lofty goal, that’s because it is. Let me take a minute to walk through my motivation and passion for this fund and why now is the right moment in time for it.
I spent several years in venture capital early on in my career and have known for over a decade that my long-term goal was to return to VC because I believe it is where innovation and change happens the fastest, but it wasn’t until recently that I knew exactly why and how I wanted to be involved with the industry.
Consider a few key points:
- The percentage of women in leadership positions today is abysmal. In the venture capital world, it’s worse.
As someone with a Bachelors, Masters, and PhD in mechanical engineering, who has worked primarily in venture capital, management consulting and semiconductors, with a side job starting a microbrewery with my husband and having two sons – let’s just say my life and work have been fairly male-dominated. But it wasn’t until I was asked to be the executive sponsor of my last employer’s womens forum that I actually researched and became aware that it was not a unique experience I was having being the only woman at the table. 4.8% of today’s Fortune 500 companies are led by women CEOs. In the venture capital world, it’s similarly staggering, with 4.2% of deal-making partners in venture capital and 3% of venture-backed company CEOs being women. Research has convinced me that this gender profile is not going to be the answer over the next few decades, because…
- Women-led companies typically outperform other companies by a variety of financial metrics.
Women excel in a variety of areas that are important to 21st century leadership skills – areas like cooperation, communication, taking initiative and driving for results. McKinsey research tells us that these solid leadership qualities translate into results for more women-led companies such as 41% higher return on equity and 56% better operating results. In the venture capital arena, women-led companies translate into less capital requirements and higher returns. These results, returns and statistics speak for themselves. Women-led companies represent an incredible opportunity now and in the future of business, and are inordinately underfunded today in venture capital.
- Women already dominate the decision making power in consumer purchases and healthcare decisions, and their share of wallet in investment wealth is increasing.
In the U.S. alone, women exercise decision-making control over $11.2 trillion – roughly 39% of the nation’s estimated $28.6 trillion of investable assets. Women account for 85% of all consumer purchases including everything from autos to health care. It is estimated that that women will control two-thirds of the wealth in the U.S. over the next decade and be the beneficiaries of the largest transference of wealth in our country’s history. With this level of purchasing power and anticipated wealth transfer, there is a clear view into the enormous influence that women will have in making future products and economic trends. I also see a clear view into the advantages women leaders will have in better understanding, designing and bringing to market products and services that address the purchasing populations’ needs and evolving preferences.
- There are clear trends in consumers, and especially women, demanding more sustainably manufactured products as well as healthier products.
As the WSJ recently pointed out, we are now living in a world where Costco outsells Whole Foods in organics, Wal-Mart is exceeding its own goals for buying local, and McDonald’s is contemplating adding kale to its menu. The tides are turning with healthier food and eating, as well as more dollars and time spent on wellness and sourcing more sustainable goods. My vantage point with a PhD in Green Design and Manufacturing, a minor in Public Health and sitting on both the UT Austin and UC Berkeley’s mechanical engineering advisory boards is two-fold: 1) not only is there increasing demand to improve the quality of ingredients, products and sustainability across local and global supply chains for greener and healthier goods, homes, and cities, but 2) women are especially interested in making a positive impact through environmental and human health (i.e., greater deal flow since women in STEM tend towards positive impact businesses.) People want and deserve both, and this is the space I consider to be true wealth creating.
The strategy of this fund is to invest in:
- More women leaders…
- …who have proven to financially outperform
- …in markets where women are making the vast majority of purchase decisions
- …with a focus on high-growth greener and healthier products and businesses.
I believe start-ups are where change is driven quickly and value created. A venture capitalist’s job is to look at where the big opportunities and exits are over the next decade. I see the trends in my own life and community, as a woman, from a unique vantage point with 96% of venture capitalists being men and a pressing need to design and develop products and processes that more effectively, efficiently and responsibly fulfill people’s needs. Women-led businesses are underinvested in today, and I see a big opportunity to hand women the reins to drive companies to successfully bring these products to life.
My purpose and value is seeking out the very best, up-and-coming companies that fit this target profile in which to invest. There is nothing I would rather spend my time doing!
- “Venture capital’s stunning lack of female decision-makers”, Fortune
- “Diana Report Women Entrepreneurs 2014: Bridging the Gender Gap in Venture Capital”, Babson College
- The Athena Doctrine: How Women (and the Men Who Think Like Them) Will Rule the Future by John Gerzema and Michael D’Antonio
- “Women Matter 2010”, McKinsey & Company
- “Whitepaper: High Performance Entrepreneurs Women in High Tech”, Illuminate Ventures
- “Harnessing the Power of the Purse”, Center for Talent Innovation
- “The Purchasing Power of Women”, marketingzeus.com
- Women and Money: Matters of Trust by Mary Quist-Newins
- “How Can Big Food Compete Against Fresher Rivals?”, Wall Street Journal