As the venture capital industry reckoned with a pandemic and its own lack of diversity in the wake of the Black Lives Matter movement in summer 2020, CEO Sharon Vosmek didn’t hold her breath. The leader of investing non-profit Astia since 2007, Vosmek has seen enough industry cycles to know that when the market faces strain, dollars toward diverse founders regress, whatever investors tweet or say.
And 2020 proved no different. Data from startup investment tracker PitchBook found that companies with at least one female founder only raised 15 percent of the $156 billion collected last year. Data platform Crunchbase found that the numbers were even worse for founders of color. Through the end of August 2020, its latest numbers, only 2.6 percent of the $83.7 billion raised at that point had gone to startups with Black and Latinx founders. One benefit of experience: Vosmek’s unfazed. The backsliding only revs her engines.
“We’ve found in our 20-year journey that whenever there has been an increase of pitches related to gender and race, the lower the investment dollars,” Vosmek said. “It’s one of the issues that we feel so strongly about with this fund and why it’s critical.”
So 20-year-old Astia is launching its first-ever traditional venture fund to invest in startups that have at least one woman in a position of leadership or influence, but not necessarily a founder or CEO. The firm says it has raised a substantial portion of its $100 million public target but would not disclose the exact amount. Financial powerhouse Mastercard has signed on as the fund’s anchor investor, alongside others including Priya Mathur, the former president of the board of CALPERs, the largest pension system in the U.S.
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In an interview, Vosmek said the new investors were impressed with the firm’s substantial returns from their angel activities which helped validate the firm’s thesis.
“They recognize that this fund is an opportunity to make venture capital better,” Vosmek said. “This is our moment and our opportunity to build to a more open and more inclusive environment.”
Founded as the Women’s Technology Cluster, a non-profit incubator for women-led startups affiliated with nonprofit Three Guineas Fund, in 1999, Astia was split off as its own independent non-profit in 2003, then renamed Astia in 2007, the year Vosmek took charge after three years in a COO role. Since 2013, the firm deployed $27 million into 58 of these companies through an angel investing fund, but this represents the firm’s first foray into a traditional VC fund.
The firm previously invested in startups including CNote, SoapBox Labs and EcoTensil. It also backed nVision Medical, a company focused on medical devices for women, which was acquired for $275 million in 2017 by medical device manufacturer Boston Scientific.
Inclusion is a core part of the firm’s investment diligence process, according to Vosmek. Astia’s CEO says it runs potential investments through a cohort of more than 5,000 individuals who are diverse by gender, geography and race. These individuals use a standard set of six questions to better vet potential investments in a more inclusive way.
“It’s hugely intentional,” Vosmek says. “It was half men and half women. Some people call it a quota. I hate quotas but I love the results. Find me something better and I’ll do it.”
With the fund, Astia is targeting 12 to 15 investments at the Series A or Series B stages across sectors including tech, life sciences and clean technology. The firm has made two undisclosed investments so far, including a marketplace company and a medical tech startup, Vosmek adds.
While Astia has not closed the entire $100 million fund, the group is hopeful to wrap fundraising later in 2021, with eyes on second and third funds soon after.
“Anyone who thinks there isn’t a pipeline of opportunities in this, I would encourage them to knock on our door,” Vesmek says. “We are not a first-time fund. We are a 20-year old institution that is best in class and here to stay.”