Starting a women-led fund: An interview with Women 2.0 founder Kate Brodock

Starting a women-led fund: An interview with Women 2.0 founder Kate Brodock

Author: Katie Miserany
Read time:  7 minutes
Published date:  20 September 2019
We interviewed Kate Brodock, CEO and cofounder of Women 2.0, and Founding partner of W, a women-focused fund.

Kate Brodock has served as CMO, CEO, and cofounder of a variety of companies and has remained firmly committed to supporting women in tech throughout her career. She’s currently CEO and cofounder of Women 2.0 and founding partner of W, the organization’s first fund, which is women-focused. 

Women 2.0 began in 2006 with a goal of increasing gender equality in the tech world. The organization offers content, programming, and resources to help women grow their careers and their companies, as well as access to an expansive network. We chatted with Kate to learn more about why Women 2.0 is expanding into the venture capital space now, after 13 years of Women 2.0, and discussed how she hopes the move will contribute to increased gender equality in the startup ecosystem. 

How does Women 2.0 help the tech industry?

We provide positive impact through two main arms. First, we offer programming for women—both as founders growing their companies and as professionals working at larger tech companies. Second, our ecosystem has driven greater awareness of and activity around how to invest in diversity and inclusion in the startup community. We want to make the actual structure that women are working within more supportive. W will help by creating direct access to capital for women founders. 

Starting a women-led fund: An interview with Women 2.0 founder Kate Brodock | Carta

Why did you decide to move into venture? Was starting a fund always the plan?

At Women 2.0, we’ve always seen how important it is to have more women in technology as founders, leaders, and investors. There’s a huge gender imbalance in funding, and our founder community told us that securing access to capital is their biggest need. We have a 14-year history of finding, supporting, and nurturing strong women founders through everything from education to pitch competitions, so starting a fund to do that in an official capacity was clearly the right next step. This is in our DNA, and our team has been around the block in all the necessary areas!

We also read the landscape. There’s an enormous gap in funding women, which to us means there’s both an opportunity to follow our missions and make a great business move. This space simply needs—and can handle—new funds, and the timing couldn’t be more perfect.

For me personally, I love nothing more than working with startups as they grow their businesses and their teams, so being able to translate that into the role of active investor is incredibly exciting. Part of the core set of values we’ve always lived by is that we can make the biggest impact on the future of innovation in the world if we can change the way those future tech giants—today’s startups—think and build as a function of their leaders and their teams. That’s what we’re hitting directly with this fund.

Women make up just 11% of VC investors. How does this gender gap influence tech in general? 

Those numbers are upsetting… There’s no way such a small fraction of women are the only ones qualified to be VCs, so it’s clear there’s something else going on—there has to be bias at play. And we work with women every day who are directly impacted by this. They are pitching their companies to rooms full of men who don’t look like them, who don’t share the same experiences. Of course this influences which companies get funding and which don’t. 

We need the entire VC industry to make a large mental shift if we want to close the gap. This will definitely take some time, but the more funds that come along and focus on the people and markets currently underserved by the VC community, the more we can all help push awareness in the right direction. But it doesn’t stop there. Traditional VC investors and firms need to change their investment outlooks to include innovation from founders and teams they haven’t historically considered.

We’ve seen the rise of a few women-focused VC groups like the W Fund in the last few years. What factors have contributed to their rise? 

First, people are becoming more aware that there is a problem. Second, people are increasingly noticing that this problem represents a huge business opportunity. Companies founded by women are often overlooked, and they have the potential to be big, impactful, and successful companies. Who wouldn’t want to capitalize on that opportunity and help those founders grow their businesses?

Starting a women-led fund: An interview with Women 2.0 founder Kate Brodock

Do you think this type of fund is having a positive impact on traditional VC firms?

Yes—slowly but surely. I think traditional firms have started to look at their hiring pipeline and tried to be mindful of hiring women into associate and junior partner positions to build a strong bench of future leaders. Efforts like the Women in VC group have also been impactful as they bring together and showcase women at all stages of VC. 

But we’re still in the awareness stage. It sometimes feels like we’ve been beating this over the industry’s head for the last 10 years, but people are still coming around to the idea that the gap is there and it’s a problem. Last year, after the second year of 2% of funding going to women founders, there was a study done that asked several VCs about the state of gender equality in venture capital. They asked, “Have women received the right amount of funding in the last year?” and a significant number of respondents replied with “Yes” or “More than enough.” This just goes to show you how far we still need to go.

Do women face any issues in launching VC firms that are unique from the experiences of men?

Your network and your capabilities are two critical issues for any fund manager, regardless of gender. For your first fund, you’re sourcing LPs from your own network because you don’t have an established track record to use to attract new investors. Women tend to call on their networks less often, which can definitely have an impact. We know several individuals who left excellent firms like 500 Startups to go solo. Getting off the ground has absolutely taken longer for the women than the men—discouragingly so in some cases.

It’s also important to remember that gender bias will inevitably pop up. Proving “legitimacy” is likely to be a bigger hurdle for women than it is for men, especially when we’re talking about taking responsibility for many millions of dollars. It also may be more difficult for women to pull large investments out of the traditionally male dominated pool of LPs. 

Did you find it harder to secure LPs when starting a women-focused fund?

Actually, having a diversity-focused fund has opened doors for us. LPs want to hear about your mission and what makes you uniquely qualified to deliver against those goals, and when it comes to supporting women founders, we have a great story to tell. However, at the end of the day, no one is cutting us any slack. Our focus on women founders enables us to have more conversations, but we still work hard to prove our value.

What advantages do women have in the VC space?

There is definitely a sense of sisterhood when we’re talking about our mission at W Fund. There’s also a fascinating sea change happening right now around how women are investing. Traditionally, if women found themselves with a large pool of wealth, they would designate that money toward philanthropy and community at a higher percentage than men, who traditionally allocate more assets toward investment vehicles. Women are now rethinking this approach. They are seeing the potential impact of putting their money into investment vehicles like VC funds, which can support and promote the next generation of women business leaders.

This shift in how women distribute their wealth is coupled very well with the rise in women-focused solutions on the startup side. For the first time, women founders are creating women-focused products and services and putting them in front of women investors. This alignment makes for a better conversation with a lot more understanding. It’s an exciting time to be involved in the process. 

What advice do you have for women looking to launch their own firm?

First, I’d recommend thinking about pooling your resources. The fundraising slog is a long one. If you know two other women trying to start funds separately, think about coming together as a team so you can build on each other’s skills, experiences, and networks. For me personally,  I don’t have a VC background, so I knew I needed to find an investment partner to bolster my skills. She’s spent 10 years in the industry and has done over 1,500 deals, and that expertise makes a huge difference when we’re talking to LPs. 

The second piece of advice I’d recommend is to do your research. We took a while to really think about which LPs to pursue. We did informational interviews to gauge where yeses and nos might come from, and we spent a lot of time evaluating our network to be more mindful and targeted in our approach.

What are you most hopeful about when you look ahead at the VC landscape?

I’m hopeful that the next 50 years of tech will be more inclusive than what we experience today. But I’m most hopeful that the amount of funding for women and founders from underrepresented backgrounds will start increasing and, with this increase, we will see some awesome companies flourish.

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Katie Miserany works on content and thought leadership for Carta. Katie is the Founding Partner at Worthwhile Digital. She previously served as Senior Director of Marketing for the Sheryl Sandberg & Dave Goldberg Family Foundation, the nonprofit organization behind LeanIn.Org and OptionB.Org.