More than 25% of companies VegasTechFund has invested in have a female founder. Partner and Women 2.0 PITCH competition live judge, Andy White, explains how they managed to beat the industry average five-times over. By Jessica Stillman (Editor, Women 2.0)
Estimates differ as to what percentage of VC money ends up at female-founded companies, but sadly, almost everyone comes up with a single digit. But not at VegasTechFund. The $50 million pot of money Zappos founder Tony Hsieh has dedicated to supporting Las Vegas tech startups (or those that are willing to relocate) and through them the revitalization of the city's downtown.
Out of 51 companies VegasTechFund has invested in so far, an incredible 14 have a female founder. Forget an industry average of 4% or 7%, at VegasTechFund more than 25% of the portfolio has a woman founder.
It’s an incredible achievement, but when we called up fund partner Andy White to ask him how they managed it, he basically shrugged.
"It’s not anything we have done intentionally,” White says, admitting that “since it wasn’t something we were focused on, we were a bit surprised when we noticed the high percentage." So if his fund did nothing special to attract its impressive array of female-led companies, does its success offer no lessons for other investors looking to diversify who they invest in?
Given that they did no outreach to women and rely almost entirely on referrals for teams to consider, VegasTechFund’s achievement may not say much about how to actively go about picking more diverse companies, but White does feel that the healthy female contingent building startups in Las Vegas suggests something about what women entrepreneurs may be attracted to.
"That is something we’re trying to work backwards on," White says, "but we do think [the high percentage of women] is a great indicator of [the fact that] this is a different environment than a traditional tech hub.”
"We have different criteria. In addition to your traditional startup metrics along the lines of a solid team that has proven that they can execute, a good product in a big market, our primary metric for success is Return on Community," White explains. How do you measure that? Teams are currently at work on hard metrics, but for now the fund relies on anecdotes and gut feel. "That looks at the fact that the team values ‘give before you get,’ that they understand if we all work together, we can all be much better off. I think the community focus is something that resonates with a unique set of entrepreneurs," he says.
The collaborative environment may be what’s attracting so many female founders to VegasTechFund, but it also creates an atmosphere in the scene that’s beneficial to everybody, according to White. "If everyone’s trying to learn and help, than that’s a much more comfortable situation for anyone to be in. It’s just not one that everyone is used to being in," he says.
So what’s the takeaway for other investors looking to learn from VegasTechFund’s experience? Hard conclusions obviously require more study, but the number of female founders willing to locate in Las Vegas clearly suggests that a focus on collaboration rather than competition, and an ecosystem that underlines that the goal of starting up is to positively impact your fellow humans, is a factor in attracting more women.
"It is appealing to a new kind of entrepreneur that we still think has every bit [as much] potential for success as a more traditional entrepreneur," White concludes.
If you’re curious which of the companies the fund has backed have a female founder, check out the complete list below:
- Ticket Cake
- Digital Royalty
- Ministry of Supply
- True & Company
Want to experience a little bit of the Vegas startup scene magic firsthand? Join us there at our conference next week.
Jessica Stillman (@entrylevelrebel) is an editor at Women 2.0 and a freelance writer with interests in unconventional career paths, generational differences, and the future of work. She writes a daily column for Inc.com, contributes regularly to Forbes and has blogged for CBS MoneyWatch, GigaOM and Brazen Careerist, among others.