Being a Female Entrepreneur Taught Me That Funding Diverse-Led Companies is the Way of the Future written by Lata Setty
As the first Investor, part of the Diligence Team and one of three members of the Limited Partner Advisory Committee (LPAC) at How Women Invest, I am on the team to spearhead The New Table campaign, the initiative to mobilize 10,000 women to invest in venture capital for the first time by 2025 to close the immense funding gap for female founded startups. There is not another opportunity in the financial world right now that compares to the ROI you receive by investing in female founders. Through funding brilliant, ambitious, and driven female entrepreneurs, we’ve helped them launch, build and scale their game-changing companies.
Here’s why I invest my time, money and influence in venture capital and, specifically, How Women Invest Funds:
My Experience Building Startups Taught Me How Difficult Raising Funds is for Women – and Why That Needs to Change
I left the practice of patent litigation to help build two startups to digitally transform the antiquated legal industry. At both of these startups, I realized first-hand how hard it is to raise venture capital money, both as a woman and as a South Asian woman. According to Techcrunch, only 1.9% of venture funding went to startups with all-women teams in 2022. And I am laser-focused on changing that dynamic and disrupting the inequity of this funding landscape as this trend has remained consistent for more than a decade.
This is what drove me to join How Women Invest in 2020 as a founding Limited Partner (LP)—to use my network and resources to help accelerate, embolden, and empower other women, including women of color founders.
While I had spent over 15 years as an entrepreneur on the fundraising side, the investor side was new to me, and joining How Women Invest from its inception has been a tremendous learning opportunity. Since investing with How Women Invest, I've built my confidence in investing—and have now invested in several additional companies as an angel investor as well as another small venture fund. And it all started with my initial involvement and commitment to How Women Invest.
With How Women Invest and Other Funds, I Invest in Ways That Align with My Values
My initial motivation to invest was to make a difference in the marketplace and provide brilliant female founders with funding to help their companies grow. I fully experienced the cataclysmic gender disparity in VC funding building my first two tech companies, and after their acquisition, was inspired to become the first LP at How Women Invest. I had not only insights on how immensely challenging it is to raise capital as a woman in general and as a woman of color, but I also had the capital to do something about it. I wanted to vote with my dollars, and helped found a fund that aligned with my deepest values.
Financial investments can be a very personal thing, and there are numerous ways to grow your net worth. Bringing more female investors into venture capital is an area that is hugely lacking, and I am driven to change that by focusing on tapping into the greatest opportunity in venture capital: backing female founders who are addressing critical problems in our world. And I love the fact that we're not focused only on femtech—we’re broader and holistic in our approach, looking for the best tech-centric companies that will bring the highest return to our investors.
How Women Invest Has Helped Make Investing More Accessible to First-Time Investors
What many people (and especially women) don’t realize is that you don't have to put in millions of dollars to be an investor in a venture fund. Women who are in a position to put in a few thousand dollars should start because I wish I had had this opportunity when I was in my twenties or thirties rather than in “middle age.” I’ve had the opportunity to connect with executive women professionals who have historically invested in their 401(k), stock market, or real estate, and through our venture fund, we’ve been able to show them that venture capital is also a viable alternative class of investment, and it's not as scary and mysterious as it may appear.
This is evident from How Women Invests’ success thus far: the funds have already had two exits, which is incredible for a small, young startup fund. Traditional venture capital firms chase the “unicorn,” but what many don’t realize is that there are many other companies to invest in that could make $500+ million in revenue and support underserved and underfunded areas of our economy, bringing critical solutions to the global marketplace.
Venture capital and investing in diverse-founded companies are the ways of the future. Through How Women Lead’s incredible network of members, our team has been able to tap into many of those women, not only as investors and limited partners, but as subject matter experts (SMEs), which broadens our ability to do due diligence across a complete spectrum of different, innovative technologies. My vision is to continue to bring a diverse array of female investors into funds focused on aligning their wealth with their values and empowering a larger generation of innovative female founders. I’m thrilled to serve as the Lead Ambassador for mobilizing 10,000 women to invest in venture by 2025 through The New Table campaign.