Earlier today we launched XFactor Ventures 2, a pre-seed and seed stage venture fund. The fund, with just under $9M in commitments including a portion from Flybridge, will invest $150K each in 50+ pre-seed and seed stage companies with female founders targeting billion-dollar opportunities.
When Anna Palmer, the rest of the Flybridge team, and I had the idea for XFactor Ventures two years ago our thesis was a simple one: putting checkbooks in the hands of existing female founders would not only help more new female founders launch and build their companies but also give the investment partners the opportunity to translate their deep networks and expertise into strong investment returns. Despite launching with a lot of confidence, we had no idea that it would succeed to the extent it has. As a result, we are pleased to scale up the effort – more investment partners, more companies, and more capital per company – with XFactor Ventures 2!
XFactor was formed out of a combination of frustration and belief. Frustration that less than 20% of the companies receiving venture capital funding have female founders and a belief that companies with diverse founding teams will outperform in the market. We also had a hypothesis that our unique investment team, which is comprised entirely of existing female founders of venture-backed companies would be in a preferred position to identify new high-potential, early-stage, companies with female founders and to provide not just capital, but also mentorship, guidance, and connections to help our portfolio companies succeed.
In keeping with our entrepreneurial spirit, the first fund was a true MVP that we stood up fast, learned from, iterated on quickly, and succeeded with, resulting in investments behind 28 companies, all with passionate, persistent, and talented female founders. We thought that there was a gender gap in the venture industry, but the level of interest and the quality of investment opportunities blew us away. This portfolio was selected from the nearly 1,500 new companies we have been introduced to and is diverse across sectors (54% B2B, 25% B2C, and the rest health-tech and FinTech) and geographies (36% Bay Area, 32% NYC, the rest are based in 9 other cities).
As we formed XFactor 2 to build on this success, we had three goals. We wanted to:
- Expand our investment team to address sectors and geographies in which we see significant opportunities
- Support more companies
- Invest more capital behind each new company.
The investment team for XFactor 2 will have 23 investing and operating partners, up from 10 in XFactor 1. All the investment partners, other than me, are existing female-founders of venture-backed companies. Immodestly, the team is impressive and I am regularly wowed by the depth of their expertise, their passion for our mission, and the breadth of their network. Our portfolio companies, as a result, benefit not only from the skills and mentorship of their specific sponsoring partner but also from the collective talents and experiences of the team. The full investment team is listed below and linked here, but the high-level details include:
- The partners have founded 28 companies that employ thousands of people and have raised over $550 million in venture capital. The new team includes 5 YC grads, 5 Fortune 30 under 30s, 9 MBAs, 2 JDs, 2 published authors, 1 PhD, and 1 Emmy award-winning producer.
- We added an entirely new team in Los Angeles, a vibrant and female-founder friendly market, and a partner in Seattle, Amy Nelson, who is also, excitingly, the founder of an XFactor 1 portfolio company. As a result, we now have a strong nationwide presence in the Bay Area, Boston, Denver, Los Angeles, New York, and Seattle.
- We added expertise in the healthcare, FinTech, AgTech and frontier tech sectors.
- Finally, all of the partners in XFactor 1 are returning to XFactor 2.
Our investment model in XFactor 2 will remain the same. We seek to back the most promising female-founded companies pursuing billion-dollar opportunities. We invest early, like to be the “first-check”, and will make a one-time investment of $150K, up from $100K in XFactor 1, in each company. We do not make follow-on investments as we have found this allows us to be the “first-call”, forming open, honest, and trusting relationships with our founders. With committed capital of $8.6M, XFactor 2 will invest in 53 companies, up from 29 in XFactor 1.
Despite these changes and growth, what remains are the frustrations and core beliefs. Female founders are still woefully underrepresented in the ranks of companies receiving venture capital funding. In 2018 17% of venture dollars globally went to companies with female founders, and at the seed stage, for the last five quarters, just under 20% of total funding went to companies with female founders. Depressingly, this is largely unchanged since we launched in 2017.
Our conviction for the investment opportunity has only increased over the past 2 years. We are constantly wowed by the tenacity, resilience, and talents of the female founders we see starting companies and, of course, particularly love the 28 founding teams we have supported with our first fund. The opportunities being pursued by female founders are diverse and don’t conform to stereotypes. We have in our portfolio AI companies, FinTech companies, SaaS companies, Healthcare and medical companies, Future of Work platforms, Consumer apps, and E-commerce brands, and all are seeking to build businesses of significant scale. We are excited and thrilled to have the opportunity to back an additional 50+ such inspirational teams from XFactor 2 in the coming years.
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 firstname.lastname@example.org. As we believe in diversity and inclusion of all people, of all genders, races, ethnicities, sexual orientations, educational backgrounds, religions, abilities, socioeconomic backgrounds, immigration statuses, and more, we will review and consider all opportunities that meet our investment criteria.
The investing and operating partners in XFactor Ventures 2 are:
- Erica Brescia, Co-Founder & COO, Bitnami (B2B tech expertise)
- Ooshma Garg, Co-Founder & CEO, Gobble (B2C expertise)
- Aihui Ong, Founder & CEO, EdgiLife (B2B2C and CPG expertise)
- Mada Seghete, Co-Founder & CMO, Branch.io (B2B and mobile expertise)
- Amanda Bradford, Founder & CEO, The League (B2C and mobile expertise)
- Liz Whitman, Co-Founder & CEO, Manicube, President Red Door (B2C expertise)
- Anna Palmer, Co-Founder & CEO, Dough and Fashion Project (B2C expertise)
- Chip Hazard, Co-Founder & General Partner, Flybridge Capital (B2B expertise)
- Jules Pieri, Co-Founder & CEO, The Grommet (B2C expertise)
- Natalya Bailey, Co-Founder & CEO, Accion Systems (Deep tech expertise)
- Danielle Morrill, Co-Founder & CEO, Mattermark; GM, Meltano at GitLab Inc. (B2B expertise)
- Jilliene Helman, Co-Founder & CEO, Realty Mogul (FinTech expertise)
- Joanna McFarland, Co-Founder & CEO, HopSkipDrive (B2G and B2C expertise)
- Nanxi Liu, Founder & CEO, Enplug (Deep tech expertise)
- Trina Spear & Heather Hasson, Co-Founders & Co-CEOs, FIGS (B2C and Healthcare expertise)
- Jessica Mah, Co-Founder & CEO, InDinero (B2B and Fintech expertise)
- Allison Kopf, Founder & CEO, Artemis (AgTech expertise)
- Aubrie Pagano, Co-Founder & CEO, Bow and Drape (B2C expertise)
- Kate Ryder, Founder & CEO, Maven (Healthcare expertise)
- Nicole Sanchez, Founder & CEO, CreditHero (FinTech expertise)
- Kathryn Minshew, Co-Founder & CEO, The Muse (B2C and B2B expertise)
- Amy Nelson, Founder & CEO, The Riveter (B2C and B2B expertise)