1 change that can fix the VC funding crisis for women founders

The venture capital industry as we know it is broken. At least for women, that is.

In terms of funding to women founders, 2020 was among the worst years on record. On a global level, only 9% of all funds deployed to technology startups went to founding teams that included at least one woman. Solo woman founders and all-women teams raised just 2% of all VC dollars, Crunchbase data showed.

Shockingly, this number is actually less than it was when we first started counting a decade ago, well before many high-profile diversity initiatives launched with the goal of fixing this very problem.

This funding gap isn’t just a moral crisis — it’s an economic one. The lack of investment into women-founded startups is a missed opportunity worth trillions of dollars. That’s because of overwhelming evidence that startups founded by women outperform startups founded by men: They generate more revenue, earn higher profits and exit faster at higher valuations. And they do all this while raising way less money.

What we’re doing isn’t working. Through research for my next book on women founders and funders, I kept asking myself the same question: When it comes to fixing the funding gap for women founders, what’s the one thing we can do that will make everything else easier or unnecessary?

I now believe that our best bet for long-term change is to focus our efforts on increasing the number of women investing partners who can write large seed checks. Here’s why.

Women investors are up to 3x more likely to fund women founders

Recently, one of the top VCs in the world told me how challenging it is to diversify his senior team. He expressed it as an accepted fact and a widespread belief. This is a common trope in Silicon Valley: Everyone wants gender diversity, but it’s so hard to find all the senior women!

In the venture capital industry, who you hire at the senior level is who you hang out with. And who you hire at the senior level determines who your fund will back.

Since studies now show that women investors are up to three times more likely to invest in women founders, it is clear that the fastest way to fund more women is to hire more women investing partners with check-writing ability. The effect to venture firms? Returns.

“When U.S. VC firms increased the proportion of female partners, they benefited with 9.7% more profitable exits and a 1.5% spike in overall fund returns annually,” explained Lisa Stone of WestRiver Group.

Data from All Raise and PitchBook reinforce the “correlation between hiring female decision-makers at the investment level and outperformance at the fund level,” adding that “69.2% of U.S. VCs that scored a top-quartile fund between 2009 and 2018 had women in decision-making roles.”

It shouldn’t be surprising that women investors are more likely to invest in women founders. That’s because humans have a propensity toward homophily the tendency for like to attract like and for similarity to breed connection.

Homophily is why a vegan VC is more likely to invest in a vegan food tech, a gamer is more likely to hang out with gaming founders, or a parent is more likely to invest in a parent marketplace. People gravitate toward what they know.

Deena Shakir, who happens to be a woman and a mother, recently led Lux Capital’s investment into women’s health unicorn Maven. Shakir had multiple high-risk pregnancies with multiple complications, emergency C-sections, NICU stays and breastfeeding challenges.

“It is no coincidence that I am joined on Maven’s board of directors by four other mothers … and a brand-new father … whose personal journeys have also informed their professional conviction,” Shakir wrote in a Medium post.

Why seed checks have the greatest impact on the ecosystem

I believe that to fix the funding gap for women founders and jump-start the virtuous cycle of venture capital investing into women, we should focus on getting more seed checks into the hands of women founders. That’s because seed investing is a leading indicator of whether we are headed in the right direction in terms of closing the funding gap for women, according to Jenny Lefcourt, a partner at Freestyle and co-founder of All Raise, the leading nonprofit focused on diversifying the VC industry.

This doesn’t discount the importance of investments made into women founders at later stages. When a women founder lands Series D capital, it boosts this year’s numbers into women founders and likely brings that particular founder closer to a liquidity event that will lead her (and her executives) to invest in more women.

That said, the greatest impact on the future ecosystem will come from widening the top of the funnel and giving more women at the seed stage the shot to one day reach a momentous Series D funding like Maven. After all, who we fund now becomes who we fund later.

Why large seed checks matter most

Finally, the size of the check is also important when thinking about how to have the biggest impact on the ecosystem.

I know first-hand that microchecks are critical to building an inclusive ecosystem. When women invest at the seed level — in any amount — they jumpstart a virtuous cycle of women funding women. That’s why when I stepped in to lend a hand at my portfolio company when the solo woman founder took a parental leave, one of my key projects was to develop Jefa House, a way for Jefa’s own executives to easily invest in other women-founded startups.

That said, large party rounds made up entirely of small angel checks are few and far between. Similar challenges face small checks from emerging fund managers. Although the sheer number of emerging managers has increased 9x in seven years, the reality is that most emerging managers simply don’t have much money.

Are women venture capitalists who run their own microfunds more likely to invest in amazing women founders than Tier 1 funds with few or no women investing partners? Yes. Will it take them a long time to compete with those Tier 1 funds in terms of check size? Yes.

This is why it matters so much when leading funds hire or promote women to the partner level. Not only does it give women founders a better shot at funding from high-signal shops, but the moves that top funds make are key signals to others in the ecosystem: In venture capital, women investors don’t have to sit at the kids’ table.

Why we must hire women investing partners

We all know that great returns in early-stage venture capital come from making big bets on great ideas that others aren’t betting on. That is why VC investing is contrarian by definition. Thanks to our increasingly globalized world and clear data showing the importance of diverse teams to make good decisions to get those returns, no one in 2021 truly believes that single white dudes in Palo Alto have a monopoly on billion-dollar ideas.

However, due to the nature of homophily, venture capital remains a highly homogenous industry, and the social and economic interactions and decisions of human beings remain deeply swayed by these principles. No matter how much work we do, birds of a feather really do flock — and fund — together.

This all leads to one place: The clearest path to funding different kinds of founders with different kinds of ideas is to put different kinds of investors on the investing side of the table. To get more funding to women founders, we need more women who can write checks. That’s why prioritizing the hiring of women investing partners who can write large seed checks is key to fixing the funding crisis for women founders and increasing VC returns worldwide.

#column, #deena-shakir, #funding, #jenny-lefcourt, #maven, #opinion, #private-equity, #startup-company, #tc, #venture-capital, #women-in-venture-capital

Edtech leans into the creator economy with cohort-based classes

Revitalized by the pandemic, entrepreneurs are on the hunt to refresh some of education’s most traditional tenets, from flashcards to tutors to after-school programs. And those aren’t just bets: They’re unicorn-valued businesses looking to capitalize on consumers’ newfound digital adoption.

The edtech sector’s boom is rivaled by that of the creator economy, which promises to help creators monetize and democratize their passions, all while maintaining their identity. The creator economy has grown over the past year due to an increased appetite for digital content from at-home eyeballs and a wave of new creators eager to meet demand.

Edtech and the creator economy certainly differ in the problems they try to solve: Finding a VR solution to make online STEM classes more realistic is a different nut to crack than streamlining all of a creator’s different monetization strategies into one platform. Still, the two sectors have found common ground in the past year — as encapsulated by the rise of cohort-based class platforms.

At large, cohort-based platforms help experts launch classes for their communities, no previous teaching experience required. Students move through the class together — ergo “cohort” — with the expert on-demand as a sounding board. It’s a bet on education, but it also allows an individual to showcase their passion by pushing all their chips to the center of the table rather than working for an institution. While the idea of experts teaching a group of people isn’t exactly new, it’s being refreshed by a wave of new startups.

It’s not a simple overlap, entrepreneurs and investors say. Some fear that turning creators into educators could bring in a rush of unqualified teachers with no understanding of true pedagogy, while others think that the true democratization of education requires a disruption of who is traditionally given the right to educate.

Anyone’s a teacher!

Massive open online courses (MOOCs) and traditional institutions are built around the belief that students want to learn from accredited teachers, while many cohort-based platforms are forming around a more controversial, yet compelling, ethos: Anyone can be a teacher. The idea of empowering people to monetize their talents is a page directly out of the creator economy rulebook.

In other words, instead of convincing a college professor to teach in their spare time, what if you convinced the star product manager at a tech startup to launch a class sharing their tips and trade secrets? It’s not a theory; it’s a venture-backed business. Mighty Networks raised a $50 million Series B to help its creators launch classes. Last month, Nas Academy raised $11 million to help creators launch their own MasterClass-type series. Then there’s Maven, an early-stage edtech company that raised millions before it even had a name — and led the charge on popularizing cohort-based classes as a branding move to begin with.

These companies sit at the intersection of edtech — and its evolving views on how education should look — and the creator economy, with its empowering premise of “individuals as a business.”

Mark Tan has taken part in a dozen fellowships and received years of coaching through his years in tech. For Tan, who moved from the Philippines to the United States, the allure of virtual classes has always been the network of students also participating in the program. That virtual networking led him to stints at Amazon and Twitch, and, most recently, he spent the last three years working as a director of product at Wyze.

The realization that “you don’t need to be an expert teacher, just an expert” is what eventually gave Tan the confidence to launch a course of his own on Maven. It will begin in a few weeks and is about community-driven product development.

“I’ve been in fellowships with people who are really well known, and sometimes it’s hard to connect with them because they’ve been in my shoes five or 10 years ago,” he said. “I think there’s an overreliance on the expert being the teacher.

light bulb flickering on and off

Image Credits: Bryce Durbin / TechCrunch

“Over time, what I realized is that there’s way more stuff to learn from other people, so I spent more time connecting to [my peers] rather than spending time listening to the lecture.”

His four-week class was originally priced at $799 but now costs $599 and requires a commitment of five to 10 hours per week. Programming will range from live weekly workshops and open Q&As to guest speakers and peer-to-peer networking.

In many ways, Tan is the quintessential example that cohort-based platform founders look for when trying to bring creators onto their service. He has experience at big, well-known companies, has spent years experiencing the product he is now selling and has a passion for education after seeing the benefit of peer-to-peer learning firsthand.

“The best teachers are the ones who haven’t been teachers before,” said Ana Fabrega, who spent years as a primary school teacher before joining Synthesis, an online enrichment school inspired by Elon Musk’s Ad Astra model. “I think that the instinct of a teacher is to jump in and try to control, over-engineer and plan everything so kids don’t struggle … but I think the approach that works the best is [by doing] the opposite.”

Synthesis focuses more on creating good facilitators that can sense engagement and create intimacy with students than educators who focus on a specific curriculum to hit certain metrics, Fabrega explained.

“We really want to make sure that the kids are the ones in charge and doing all the heavy lifting, not the teachers,” she said.

#ec-edtech, #edtech, #education, #gagan-biyani, #maven, #mighty-networks, #startups, #tc, #wes-kao

Men are a niche demographic

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

Danny was back, joining Natasha and Alex and Grace and Chris to chat through the week’s coming and goings. But, before we get to the official news, here’s some personal news: Danny is stepping back from his role as co-host of the Friday show! Yes, Mr. Crichton will still take part in our mid-week, deep dive episodes, but this is the conclusion of his run as part of the news roundup. We will miss him, glad that his transitions and wit will continue to be part of the Equity universe.

Who will take the third chair? Well, stay tuned. We have some neat things planned.

Now, the rundown:

Equity drops every Monday at 7:00 a.m. PDT, Wednesday, and Friday morning at 7:00 a.m. PDT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

#brazil, #carta, #chime, #databricks, #decacorns, #discord, #equity, #equity-podcast, #fundings-exits, #informed, #launch-house, #maven, #media, #monte-carlo, #news-economics, #nuvemshop, #startups, #unicorns, #yik-yak

Maven’s comprehensive approach to women’s health earns it unicorn status

For Kate Ryder, the founder of women’s health clinic and benefits platform Maven, business is personal. During the first year of building her company, Ryder experienced a miscarriage. Maven began offering support for pregnancy loss and high-risk care management as the founder herself waded through the emotions and confusion of it.

Ryder was then a Maven “customer” for her following three pregnancies, using the platform for after-hours advice, virtual access to specialists or, more recently, guidance on how to prepare for a breech birth. As a founder-turned-repeat-customer, Ryder gained a key perspective on parenthood: it’s a diverse experience.

The insights were poured back into her business, a platform that offers services addressing everything from fertility to family care. And today, Maven is making history in its own way.

Maven announced that it has raised $110 million in a Series D financing co-led by Dragoneer Investment Group and Lux Capital. BOND also participated in the round, alongside existing investors, including Sequoia, Oak HC/FT and Icon Ventures. Oprah Winfrey also invested in the round, bringing Maven’s total known funding to date to $200 million.

The financing event valued Maven at $1 billion, a rare landmark moment for women’s health, and women-led startups more broadly.


After raising one of the largest Series C rounds for women’s health startups in 2020, Maven’s latest financing came after some strong growth.

The startup said that it has partnered with five new Fortune 15 clients, including Microsoft, and has achieved a near 100% retention rate. While the company didn’t disclose client growth more specifically, it did say that membership in its employer and payer-sponsored clinical problems increased 400% year over year — suggesting that revenue similarly grew as the company hit larger scale.

While COVID-19 refocused women’s health as a top priority, Maven began when that wasn’t a baseline assumption. The company was founded in 2014 to help working women plan and start families. It started by selling to employers as a benefits platform, which it still does today — the idea being that women could turn to their employers to get access to a network of women’s health and family health provider networks.

The focus has aged well as companies rethink health benefits in the wake of the coronavirus, which has disproportionately seen women depart from the workforce. Ryder says this wasn’t always the case, noting how many rejections she got in the early years of building.

After five years, Maven has grown to offer support services ranging from preconception to post-pregnancy to family care. Companies are able to offer their employees access to 30 different provider types, which include OB-GYNs, pediatricians, therapists and career coaches. Because the options can be overwhelming, Maven also introduced care advocates — people whose entire job it is to support existing patients in navigating the resources.

“For anyone who says that telemedicine isn’t important in this user journey is somebody who is not really deeply immersed in the needs of the patient,” Ryder said. “A new mom, particularly in childbirth recovery, has a baby and can’t really get out of bed and has all of these needs… There’s no better time to use telemedicine.”

More than 2,000 doctors, caretakers and specialists exist in Maven’s network, a total that represents over 250 subspecialties, from egg donor consultants to fertility awareness educators. The startup has served over 10 million women and families to date.

A growing focus for Maven is being able to match its members to providers who are culturally aware and relatable to them. Black women, for example, face higher mortality rates compared to their white counterparts — a factoid that seeded another startup, Expectful, to pivot its focus.

Ryder said that 40% of Maven’s providers are BIPOC, and can speak across 30 languages.

Even with the introduction of white-labeling services that make it easier for competitors to spin up telehealth services overnight, Ryder said Maven wants to stick to hiring in a more incremental way. The startup accepts about 35% of provider applications that it gets, she said.

“If we were starting today, we’d look at [outsourcing] platforms because we’d need it to compete in the market — we have the benefit of starting in 2014, when we were able to take our time and just be really thoughtful about the types of providers that work with Maven.”

The rise of competition makes Maven’s status as a unicorn more broadly relevant, with investors thinking it could prove opportunity in women’s health and give the growing sector a fresh consolidator to acquire some startups.

The rising tide

Maven’s raise wasn’t only a milestone from a fundraising perspective, but also a board perspective. Most of the startup’s investors are women and mothers, she noted — a bright spot when looking at data that suggests that nearly half of private companies don’t even have a woman on the board at all.

Deena Shakir, partner at lead investor Lux Capital, said this was her largest check to date into a startup.

“The idea of the woman as the primary decision maker in healthcare is just part of my overall thesis around women’s health,” Shakir said. “A woman is more than just, obviously, her reproductive identity — that’s for sure.” As well-funded startups in the mental health and musculoskeletal worlds — two other top priorities for employers — kept growing, Shakir felt like maternal health was the last top cost center that employers needed to address.

Maven is compelling to Shakir because of how comprehensive it is, which she thinks is increasingly important as new vendors and point solutions enter the market and exhaust employers through decision fatigue.

“It’s not just in maternity and it’s not just in fertility, and not just in pedes or mental health,” she added. Maven’s language is already starting to look more broad in branding, moving from women’s health to family and child health. “There’s also male infertility, couples therapy, and beyond the gender binary…it’s very sensitive to providing inclusive care for everyone.”

Ro’s acquisition of Modern Fertility showed that hormonal health and women’s health are being looked at as an attractive opportunity for digital health startups more broadly.

“Ro started off as men’s health,” Shakir said. “I’m excited for when it’s going to be the women’s health company that’s going to be making the other, you know, several $100 million acquisitions here.”

Christina Farr covered the rise of digital health as a journalist for CNBC before leaving her post to become an investor at OMERS Ventures, which does not have a stake in Maven.

As a reporter, Farr said that one of the things she would often hear is that women’s health was too niche as an investment category.

“Which is obviously upsetting, and just not true,” Farr said. “How could you ever refer to 50% of the population as niche on top of the fact that women are the primary buyers of healthcare services in their household — to me that’s just an ignorant perspective.”

Farr said that she’s not aware of any other companies in the digital health, women’s health space that have raised this much money with a female-founder. “I believe at this stage, the CEO became a man,” she said, of another startup. Long-term, Farr thinks that Maven has the potential to bring together a lot of the different point solutions for women and family health under one roof, whether it’s postpartum recovery or physical health.

“In my mind, these companies can exist in their own right, but there’s also an incredible value to pulling together all of us in one kind of platform in one place,” she said. “I think a big kind of potential area for Maven is to be a navigator for all the women’s health solutions that are out there.”

Ryder maintains that her personal experience has given her a lot of opinions — ones that she thinks have helped the company stay focused, even in the wake of new competition and potential acquisitions.

“We know what we stand for, we know what we do for patients, we know that our care model works, and so we’re unwilling to kind of bend,” she said. “If there’s the latest shininess that everyone goes rushing for that doesn’t help the patient, then we’re not going to run towards it.”

#digital-health, #dragoneer-investment-group, #health, #lux-capital, #maven, #recent-funding, #startups, #tc, #womens-health

A16z bets millions on Maven, a platform for cohort-based courses

Maven, a startup that helps professionals teach cohort-based classes, has raised $20 million in a Series A round led by Andreessen Horowitz. The round places A16z general partner Andrew Chen on Maven’s board – and is his latest lead check in a creator-focused company, similarly pouring millions into recent rounds for Clubhouse and Substack.

The investment comes seven months after Maven, then nameless, left stealth alongside a $4.3 million round led by First Round Capital, and three months after it raised a $750,000 equity crowdfunding round. While the company declined to disclose valuation, we do know that it’s a lot of fast cash earmarked toward fueling the same bet: that the future of cohort-based learning is the future of education.

And if you’re wondering why, I’d tell you it’s two-fold. First, the startup has an impressive founding team: Udemy co-founder Gagan Biyani, altMBA co-founder Wes Kao, and early Venmo employee and Socratic co-founder Shreyans Bhansali.

Second, Maven has some impressive growth to tout, showing its potential. Maven’s core product right now is a suite of services that makes it easier to run a cohort-based course, while taking a 10% fee – similar to Substack – from a professional’s revenue. In three months after its January launch, four Maven courses earned over $100,000. To date, over $1 million worth of courses has been sold on Maven.

With the new capital, Kao tells me that her team is focused on getting instructors to see the value of CBCs. The startup has had over 2,000 people apply to become instructors, and expects to grow from 7 to 100 instructors by end of the year. Some of Maven’s investors, including Sahil Lavingia and Li Jin, are instructors on its platform. Long-term, the startup sees its competitive differentiation as helping experts who aren’t “conventional instructors” start sharing their knowledge.

The co-founder teaches a course to all incoming Maven instructors – meta, I know – from deciding to put in a curriculum to understanding course-market fit and building buzz for the course.

While Kao explained that instructors like the idea of turning free advice in modular, revenue-generating classes, she said “monetizing that expertise is often really hard.”

“Traditional platforms—Instagram, TikTok, Twitter—create a division between activities intended to monetize and those meant for community building,” she said. “Meaning, creators give away valuable content, and then monetize via brand partnerships or low-margin merchandise—activities that often detract from community-building.”

The biggest challenge ahead, she thinks, is expanding the mindshare about CBCs for creators. It needs to show the importance of signal in the cacophony of air horns that want creator’s attention.

It’s a problem that Maven is all too familiar with it.

“One of the biggest things we had to untangle early on was the difference between “content” and the Maven offering,” Kao explained. “There’s no shortage of content in our world.” The startup had to spend a good chunk of time figuring out how to create a cohort-based class experience that pairs community and accountability with that content. And it still has ways to go.”

“At the end of the day, it ended up being quite simple. In our view, we’ve reached the Post Content Age,” she said. “In other words: Content is no longer scarce in education. It’s either free or low cost, and it’s abundant.”

#a16z, #andreessen-horowitz, #clubhouse, #maven, #substack, #tc

GM exits car-sharing business and shuts down Maven

GM’s experiment with car sharing is over. The automaker Tuesday said its Maven car-sharing service, which launched in 2016, will shut down for good.

Maven had paused service due to the COVID-19 pandemic. The company sent an email to customers Tuesday that after examining the business, the car-sharing industry and COVID-19, it decided to shutter the service permanently. The Verge was the first to report the story.

The car-sharing service has struggled for months, long before COVID-19 upended the “shared” mobility sector. Last year, Maven scaled back and stopped service in nearly half of the 17 North American cities in which it operated. Maven continued to operate in Detroit, Los Angeles, Washington, D.C. and Toronto. However, two programs within Maven, its consumer car-sharing and peer-to-peer service, also stopped in Washington, D.C. Only a program directed at gig workers was still operational in that city.

GM confirmed to TechCrunch that it has started to wind down Maven. All assets and resources will be transferred to GM’s Global Innovation organization, as well as the larger enterprise, according to a GM spokesperson.

The company confirmed that all operations should be concluded by later this summer. Maven had already suspended its consumer car-sharing and a peer-to-peer service due to COVID-19. A separate program directed at gig economy workers has been “very limited and will continue to wind down,” a GM spokesperson said.

“We’ve gained extremely valuable insights from operating our own car-sharing business,” Pamela Fletcher, GM’s vice president of global innovation, said in an emailed statement. “Our learnings and developments from Maven will go on to benefit and accelerate the growth of other areas of GM business.”

Below is a screenshot of the email sent Tuesday morning to Maven customers.

maven shut down

Image Credits: Screenshot/Maven email

The company doesn’t have plans to re-enter the car-sharing business. The company told TechCrunch that it “will take the great insights we’ve gained from Maven and leverage its car-sharing technology to provide new GM fleet services, and explore other new service offerings.”

Maven was designed to bring and expand several of GM’s existing test programs under one brand. At the time of its launch, Maven was essentially three car-sharing services in one that included a city-based service that rented GM vehicles by the hour through an app and another for urban apartment dwellers in Chicago and New York.

Maven developed and launched a smartphone app, which was used by customers to search for and reserve a vehicle, unlock the door and remotely start, cool or heat the car. 

It was an important launch for GM and its Chairman and CEO Mary Barra, who used a study commissioned in the wake of the ignition switch engineering scandal to accelerate her plans to transform the culture and operations at the automaker. Dozens of executives participated in transformational leaders programs; Maven was one of the fruits that spun out of that.

A wave of other initiative and investments were announced in 2016 that showed GM’s shift in interest toward unconventional transportation businesses that were adjacent to its core business of producing, selling and financing cars, trucks and SUVs to consumers.

But Maven never quite settled on one business model. The car-sharing service continued to evolve, leaving and entering cities or tweaking where it offered certain programs. For instance, the company launched in 2017 Maven Reserve in Los Angeles and San Francisco to allow customers to rent its GM-branded vehicles for a month at a time. It also started Maven Gig in hopes of tapping into a growing demand from rideshare and delivery app drivers.

Maven then launched a service in summer 2018 in Chicago, Detroit and Ann Arbor that let owners rent out their personal GM-branded vehicles through its Maven car-sharing platform. The peer-to-peer car rental service was designed to operate in a similar fashion to how Turo and Getaround work.

The service’s demise seemed to begin after the company lost its CEO Julia Steyn in January 2019. It scaled back a few months later and was only operating in a handful of cities up until the COVID-19 pandemic put further pressure on the business.

#ann-arbor, #automotive, #car-sharing, #car-sharing-service, #carsharing, #chicago, #collaboration, #coronavirus, #covid-19, #detroit, #general-motors, #getaround, #gm, #los-angeles, #mary-barra, #maven, #new-york, #peer-to-peer, #san-francisco, #smartphone, #tc, #toronto, #transportation, #turo, #washington-d-c