Building on ten successful exits of female founded startups, Jesse Draper recently announced the closing of Halogen Ventures’ second fund totaling $21 million. The new fund focuses on early stage consumer technology startups, as did the first fund—yielding notable acquisitions such as Squad App by Twitter, ThisisL by P&G, Eloquii by Walmart, among others.
“We are investing in consumer technologies to make lives easier from improving the way we shop, educate, work from home to companies solving childcare and government inefficiencies. Some of the greatest technology companies in the world came out of the 2008 recession and we see a similar opportunity now to solve these new problems that have come to light in this pandemic,” says Draper.
Draper and her team attribute their success to their ability to assess consumer behavior and related industry trends. Their enthusiasm to launch a second fund emanates from the great performances shown by the women entrepreneurs they previously backed.
Draper, having a long history in venture capital, was not surprised by the results of the first fund. Recent studies have shown that for every dollar invested, businesses founded by women generate revenue almost two times higher than those founded by men. Yet, despite these better results, only 13% of venture capital go to startups that have a woman on the founding team. The data and a fuller discussion of this can be found in Boston Consulting Group’s Study titled Why Women Owned Startups Are a Better Bet.
Draper sees there is a bright future for women entrepreneurs, citing the high number of women-led startups. But the full potential of those opportunities are still not being captured because of the hurdles that still exist for women to receive timely access to capital. Progress, however, is being made in this area through a growing list of angel groups and venture capital firms that are focusing women, minority and veteran entrepreneurs such as Portfolia, Golden Seeds, Pipeline Angels, Female Founders Fund and others.
“While some studies show investments in women went down in 2020, this is ultimately a deal flow problem, and lack of network expansion where the traditional and institutional funds are stuck in graveyard networks and need to broaden their scope,” says Draper. “We need to get more investment in women founded businesses and funds from high net worth investors, institutions, endowments and fund of funds”.
Many factors influence deal flow and for some women entrepreneurs being in the right time and place is one. A recent Dell Study revealed that some U.S. Cities are more favorable to women entrepreneurs—that is valuable insight for women making the hard decision to start a business knowing at a later point they may need a variety of support and access to capital to go forward. A positive ecosystem toward women cannot be underestimated.
There are also broad efforts to support women in business and specifically helping them to become leaders. A study by InfoGroup last year highlighted the progress that women have made in gaining leadership positions. As more women break the glass ceiling, there will be more women executives to champion women entrepreneurs.
Draper has invested in over 60 early stage deals including The Skimm (with GV), Glamsquad (with SoftBank), and Hopskipdrive. She is a fourth generation venture capitalist and she shares her motivation for funding female entrepreneurs in the most straight forward terms, “Growing up, I didn’t see any women in technology or female CEOs around me. In order to change that, I created Halogen Ventures.”
Read: Women-Owned Small Businesses Challenged When Capital Access Is Limited in Latest Survey
