Launching The Fund XX
Building a Pre-Seed Fund For Women, By Women
Today we’re honored to announce the launch of The Fund XX, an early stage VC fund investing in women-led businesses across the U.S., powered by a community of founders and operators. While we need more female-focused funds, The Fund XX is unique in that it directly tackles multiple problems in a slow to improve, male-dominated ecosystem.
Community driven venture capital is today’s angel investing frontier. Angel investing has historically been limited to exclusive clubs of highly connected, wealthy founders and executives. Today, investment platforms like AngelList that facilitate smaller check sizes for accredited investors make it easier than ever for new investors to plug into the entrepreneurial ecosystem. There are over 3,000 new angel investors projected to make their first investment in 2021, and over $2.1B of capital was deployed in the first half of 2021.
Despite this influx of new angels with lower barriers to entry than ever, women remain significantly underrepresented in the angel investment landscape within the U.S. According to the Angel Capital Association, women represent 22% of angel investors. While this percentage is disappointing, a gendered breakdown of syndicate LPs, or pooled angel investors, on AngelList, suggests that, on average, approximately 3% of listed LPs are women. This indicates dramatically less activity and fewer dollars deployed by women to early stage companies.
Enabling participation for women investors in pre-seed and seed companies is a critical area of focus to drive a healthier ecosystem. It is at the earliest stages, when entrepreneurs have nothing but a team and idea, where “pattern matching” can easily give way to bias. This compounds as less funding and fewer resources undoubtedly play a major role in more well-known stats in the later stage venture capital ecosystem, where all-women entrepreneurial teams raised just 2% of all institutional VC dollars.
In the late 90s and early 2000s, women-focused angel groups began to emerge, emphasizing supporting women founders. Unfortunately, however, entrepreneurs relying on angel investment face several challenges. They must herd a larger volume of investors to align around financing. They face longer timelines to raise. They encounter varying levels of credibility and significantly smaller dollars per angel. And finally, individual angels come with a lower likelihood of follow-on resources and investment.
The Fund XX charters a new frontier for women investors and entrepreneurs by harnessing the power of community around a fund structure for pre-seed and seed stage investments:
A community of Member LPs invest and bring extensive operational experience as former and current founders and operators.
90% of our LPs are women, creating a meaningful on-ramp for women investors into the pre-seed and seed ecosystem.
Member LPs bring both capital and resources to women entrepreneurs, with an ability to deploy resources and expertise to women-led companies far faster than fragmented angel groups and syndicates as part of an overarching fund structure. Follow-ons are more easily facilitated by a community already in place.
The Fund XX’s four investment committee members are women. This differs from the current VC landscape, where 12% of decision makers at VC firms are women.
If you are a female founder and CEO building a tech-enabled business and you are looking to raise a pre-seed or seed round (or know of someone we should meet), we want to hear from you! Please contact us here.
If you are a founder or operator and are interested in being an investor in The Fund XX, you can find more information here.
Learn more at www.TheFundXX.com
Gaby Isturiz is Partner at The Fund XX, serial entrepreneur, innovator, experienced CEO, and founder of two high-growth successful SaaS companies that she sold to Fortune 500 companies
Sylvia Kuyel is Partner at The Fund XX and a VP of Customer Revenue at JumpCloud after scaling Cloudflare’s global Customer Success team
Ragini Holloway is Partner at The Fund XX and SVP of People at Affirm, where she’s 10x’d company headcount and founded their Diversity, Equity & Inclusion Council, after building the early Credit Karma team
Allison Stoloff is Partner at The Fund XX and an investor at Hanaco Ventures after spending over a decade helping to scale high-growth companies