Announcing XFactor Ventures: Female Founders Investing in Female Founders

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Today, we are pleased to announce and launch XFactor Ventures, a pre-seed and seed stage venture fund that will invest in 30 new companies with female founders targeting billion dollar opportunities in the coming year or two.  

Are you a female founder with the XFactor looking for funding?  If so – we want to talk to you!  Please find us online at XFactor.ventures, follow us on Twitter or reach out via email to hello@xfactor.ventures

XFactor is led by a fantastic investment team of female founders –

  • Bay Area: Danielle Morrill of Mattermark, Erica Brescia of Bitnami, Jessica Mah of inDinero, and Ooshma Garg of Gobble
  • New York: Aubrie Pagano of Bow & Drape, Kathryn Minshew of The Muse, and Liz Whitman of Manicube
  • Boston: Anna Palmer of WonderMile, who while also working on launching her second start-up, was instrumental in co-founding XFactor with me and my amazing partner at Flybridge, Kate Castle.

This team has delivered hundreds of investor pitches, raised well over $100M in venture capital across multiple rounds, hired thousands of employees and generated significant value as they have built and grown the almost dozen companies they have founded.  

XFactor’s goal is threefold:

  1. Supporting and enabling the next generation of female-led businesses.  We invest in companies with at least one female founder – the “X Factor” – who have the insight and drive to build the next billion dollar company. Our investment team are all talented and successful female founder operators that have ridden the company-building roller coaster themselves and will provide connections and “in the trenches” advice and mentorship to our portfolio companies.  Regardless of gender, a team of successful founder and leaders investing in the next-generation of founders is unique and their collective insights will be valuable to the companies in which we invest.
  2. Providing our investment team a platform and mentorship to become successful investors. We hope that, over time, this effort will increase the ranks of female investors in the venture and angel investing community.
  3. Finally, and most importantly, XFactor is focused on generating attractive investment returns by identifying massive market opportunities and backing the most talented ambitious founders (who happen to be female) based on our conviction that diverse teams will outperform in the market.  Said another way, XFactoris not an affirmative action fund with all the negative connotations that implies.  There are few things worse for a female founder than being referred to a female-focused fund with the insinuation that you are not ready for the big leagues of male dominated funds. That’s not us. We are big league entrepreneurs and investors that will hold founders to high standards and support them in building game-changing companies.

I have been a venture capitalist for almost my entire professional career, first as a General Partner at Greylock and more recently as a co-founder of Flybridge.  On a personal level, I have always been surrounded by strong women and recognize the unique value women can bring to the table.  Over the years, when I realized that my male-dominated deal flow and investment activity did not reflect those values, I told myself that it simply reflected the demographics of the B2B tech space in which I invest.  Further, when I heard stories about VCs who would ask female founders what they would do if they got pregnant, or comment inappropriately on their appearance, or get their wife on the phone to help assess an idea that was being pitched to them or, as has become so apparent in the last weeks, inappropriately turn pitch meetings into a dating opportunity, or even more deplorable, an opportunity to leverage their power to sexually harass female founders, I comforted myself by saying that was not me or my partners. Those jerks are the minority of venture investors and not the ones I work with.

But last Fall, it became apparent that being a bystander was no longer acceptable.  I was appalled that the public discourse in the country suddenly turned openly misogynistic.  And when I received a specific comment from my oldest daughter, a tech-focused junior in college, I realized I had to do something to change the venture industry. “Dad,” she groaned, “I am so tired of looking at websites of startups and seeing only men on the management team” Thus, teaming with Kate, the inspirational XFactor investment team, and all of my partners at Flybridge, we set about forming XFactor Ventures.

The venture industry needs to dramatically change.  80% of the companies that receive venture funding have male only founding teams, and only 7% of partners in leading venture firms are women.  The two are related.  Female partners are more likely to back female founders and yet venture firms pull new venture partners from the ranks of successful founders, so the cycle perpetuates.  While the funding statistics are objectively not right, they are, equally importantly, not smart.  Diverse founding teams will have a better perspective on market opportunities, how to define and market products for the widest possible audience. They will make better decisions and be more successful in attracting and retaining talent.  All of which will lead to superior investment returns.

Finally, as no post from me would be complete without a chart, I have been astounded by the change in the gender composition of my “sourcing meetings” since I started working on XFactor, and this is in the last six months while we were quietly working on this initiative.  As shown below, it turns out to find female founders; you just need to look for them.

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The entire team at Flybridge is thrilled to support XFactor and, on a personal level, I am looking forward to working with our phenomenal and unique investment team as we back and support 30 companies started by fantastic female founders with the XFactor!  

Are you a female founder with the XFactor?  Find us online at XFactor.ventures, follow us on Twitter or reach out via email to hello@xfactor.ventures.  

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