Katie Jacobs Stanton, a former Twitter executive and co-founder of the #ANGELS investment collective, has raised $25 million for her debut venture capital fund Moxxie Ventures.
As the sole general partner, she plans to invest between $250,000 and $500,000 in underrepresented and underestimated founders, Stanton tells TechCrunch, with a focus on “products that make life and work better.”
Stanton co-founded #ANGELS alongside Chloe Sladden, Jessica Verrilli, April Underwood, Vijaya Gadde and Jana Messerschmidt in 2014 with a goal of getting more women on startup cap tables. The #ANGELS, four of whom are Moxxie limited partners, share deal flow but invest in startups independently. Stanton said she will continue her work with the collective as she ramps up Moxxie Ventures.
“I wanted more agency over the types of companies I wanted to back,” Stanton said of her decision to raise capital from LPs rather than stick to investing personal capital. As for her decision to invest primarily in minority entrepreneurs, Stanton cited recent statistics.
In 2019, just 2.8% of U.S. venture capital invested went to female-led startups, a small increase from last year’s 2.2%. Despite efforts from new organizations like All Raise, venture capital firms tapping their first-ever female check-writers or new funds cropping up focused on the underfunded, the latest data paints a disappointing picture.
“We just aren’t moving fast enough,” Stanton said. “We need to take bigger swings to move the needle faster. The fastest way to make progress isn’t to move inside those existing institutions but by creating new ones.”
Stanton is not new to investing, having built a portfolio of some 40 companies over the last several years, including Cameo, Carta, Coinbase, Ethel’s Club, Lambda School, Literati, Modern Fertility, Shape Security and Threads. As such, she was able to raise the $25 million effort in roughly six months. However, even with an extensive network of Silicon Valley heavyweights, Stanton said she pitched 279 individuals and organizations before closing the fund: “I told myself if I’m not getting rejected daily, I’m not trying hard enough.”
The process made her a better investor, she said. A whopping 29% of the entities she initiated conversations with ghosted her after an initial reply indicating interest. “A fast no is a lot better than a long maybe,” she said. “It’s kind of like we went on these dates — it’s not like we had a great date — and I never heard from him again.”
Entrepreneurs, of course, are all too familiar with the concept of ghosting, as venture capital investors are prone to disappearing or elongating an eventual “sorry, we’re not interested.”
Moxxie enters the market at an interesting time for venture capital fundraising and investing. There are more funds than ever deploying more capital than ever. In fact, there are so many new sub-$100 million funds, there are new names to differentiate the sub $25 million funds, or nano funds, from the $25 million to $100 million funds, or micro funds. In total, U.S. VCs were expected to dole out more than $120 billion this year, surpassing last year’s all-time high of $117 billion.
The frothy markets have allowed entrepreneurs to be pickier than in the past, leading to swelling valuations and frustrated investors. Stanton, like any optimistic VC, said she plans to be very disciplined and committed to the strategy she pitched LPs, meaning she will do her best to avoid the buzzy Y Combinator graduates that seek a $37 million valuation right out of the gate.
“People are raising a lot more money now just because they can,” Stanton said. “I am trying to maintain some discipline and have some constraints around the valuation. When I hear things valued at $20 million at seed pre-revenue, I just back away. There’s going to be a correction at some point and I worry for those founders.”
Moxxie has invested in four startups to date, including women’s professional network Elpha, hiring platform Purple Dot, a soon-to-launch tool for arranging meetings called Sesh and Honeycomb Labs, a parenting tech startup.
“My kids were encouraging me to do this and I realized it really just takes courage to do what founders do every day and to create something from nothing,” Stanton said of the firm’s name, Moxxie. “I added the extra X for the female chromosome because of my passion for the broader female founder and investor community.”
I’m really proud of this,” she added. “It’s the scariest thing I’ve ever done but it’s something that I think is important to do.”
from TechCrunch https://ift.tt/2ZaLqtX
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