BBG Ventures, an eight-year-old, New York-based seed- and early-stage enterprise agency that solely backs founding groups which characteristic no less than one lady, simply locked down $50 million in capital for its third fund, a serious leap over its first two funds, each sized at $10 million.
One figuring out issue within the greater fund is that BBGV, previously backed completely by AOL (now Verizon Media), now has a broader pool of institutional and particular person traders, together with the State of Michigan Retirement Programs, the George Kaiser Household Basis and Verizon Ventures, together with Poshmark cofounder Tracy Solar, ClassPass cofounder Payal Kadakia, and enterprise capitalists Aileen Lee, Theresia Gouw, and Jennifer Fonstad.
The younger agency additionally has a monitor document to which to level. Although an funding within the coworking area The Wing could have taken an sudden flip, harm by a nationwide lockdown and inner turmoil, different bets have been rising, together with the e-commerce platform Zola; the female hygiene model Lola; and Spring Well being, a psychological well being advantages platform for employers that not too long ago closed on $76 million in Collection B funding led by Tiger International Administration.
That’s saying nothing of the huge and underserved alternative to put money into women-led groups that BBGV’s founders, Susan Lyne and Nisha Dua, consider most enterprise companies nonetheless don’t totally respect.
We talked earlier at this time about why that’s with Lyne, who’s a former ABC president, former Martha Stewart Residing CEO and former CEO of AOL Model Group; and Dua, who’s a former lawyer, administration marketing consultant, chief of workers to Lyne, and founder. Our dialog has been edited for size.
TC You’ve raised $50 million. What measurement checks will you be writing? Are you trying to take greater positions or do you might have a extra numerous strategy?
ND: We’re writing $500,000 to $1 million checks. We search for 7.5% to 10% possession, and we’re open to co-leading, however we favor to steer. We’ve been main rounds already with this with this fund. We’ll seemingly do about 30 corporations from the fund, backing a mixture of pre-seed and seed-stage startups, with reserves for follow-on funding.
SL: We’ve truly performed 11 investments; we began investing after the primary shut.
TC: You’ve invested in practically 80 startups over time. What has been your largest funding to this point?
ND: Planet Ahead, which was based by Zume cofounder Julia Collins.
TC: Have you ever — or would you — ever type a particular goal automobile to speculate extra in a startup than your fund permits?
SL: We didn’t do it for our final funds, however we did our first SPV for this fund, in an organization known as Starface, which is skincare firm that takes a really totally different strategy to the zits drawback. You’ve most likely seen the gold stars [that its customers apply to their pimples] on social media. They’ve been rising very quick and did a Collection A not too long ago and we took a part of it ourselves however we additionally opened an SPV for considered one of our LPs.
TC: What themes curiosity you proper now?
SL: We’ve performed a number of investing so far in well being and nicely being. That’s our largest class. The second is the way forward for work and training; the third is climate-friendly commerce; and the fourth is admittedly underestimated, or rising shoppers. In all of these areas, we’ve got truly discovered there are a lot of, many, many feminine founders who’re lively and constructing nice corporations
ND: Additionally, we [have historically] described ourselves as a shopper fund, however we’re doing extra B2B on this fund, the place we predict that the B2B strategy may remedy an even bigger shopper drawback, together with for a lot of hundreds of thousands of shoppers.
TC: What’s an instance of what you imply?
SL: Grayce, which is doing eldercare and really promoting to employers as an worker profit. In case you take a look at the associated fee to corporations due to the variety of hours and days that many individuals put money into taking good care of an getting old mum or dad or attempting to determine what the subsequent step is for them [you appreciate the need for this kind of service]. This platform not solely permits you to join with somebody who will help you propose but in addition factors you to the sources you want, together with monetary sources, authorized sources, and dwelling sources.
ND: One other is Full Harvest, a market and logistics platform that takes all the surplus meals on a farm that doesn’t meet beauty requirements and resells it to juice and salad makers and different meals manufacturers and producers.
TC: You talked about Julia Collins. Are you aware what number of first-time founders you’ve backed versus repeat entrepreneurs?
ND: There’s a combination. We don’t have a choice.
TC: Do you might have a geographic focus?
SL: I’d say, New York Metropolis is certainly our main supply for for corporations for lots of causes, together with that there’s a really wealthy and lively feminine founder group right here. That is the headquarters for a lot of totally different sorts of industries, so that you get a variety of expertise right here. However we’ve additionally invested in San Francisco corporations, corporations in Los Angeles, in Milwaukee, in San Diego. [We see] alternative in no less than a dozen cities throughout the nation.
TC Have have your syndicate companions modified over time, if in any respect?
ND: That’s been one of the vital thrilling issues of the previous few years. We like to companion with ladies GPs — people like Kara Norton of Upfront Ventures and Jess Lee of Sequoia. There’s a nice spiderweb of ladies GPs rising at these prime enterprise funds who can create these robust relationships and are finally leads for follow-on rounds.
TC: Do suppose women-led groups are receiving the valuations they might in the event that they have been all-male groups? I used to be horrified to learn earlier at this time that the wage hole between women and men has improved by 8 cents over the past 25 years.
SL: I can’t communicate authoritatively about whether or not ladies are getting decrease valuations throughout the board. We definitely know that they’re getting a vastly decrease proportion of the enterprise capital funding. In case you take a look at the stats in regards to the quantity of funding for girls in 2020 versus males, it’s undoubtedly disturbing and reveals the overwhelming majority of enterprise capital remains to be going to all all male groups. I feel a few of that’s as a result of megarounds that we’ve seen, however not sufficient of it to make a major distinction.
ND: I feel it was Harvard Enterprise Overview that did some actually attention-grabbing analysis at a  TechCrunch Disrupt occasion that overwhelmingly steered that males are judged on their potential and girls are sometimes judged on their present experience, and we [might] surmise that [these factors] may have one thing to do with valuations.
It’s why we’re main rounds. We see the alternatives that these female-led groups are going after — and we’ve got the chance to evaluate them on their actual deserves.