Launch & Invest in Female Founders in ClimateTech

Disparities in venture capital investments are widely documented, with only ~ 2% going to women-led startups. Meanwhile, US venture capital investment in ClimateTech increased 80% between 2020-21, reaching $56 billion, and a recent Aspen Institute report on DEI in ClimateTech pointed to a stark lack of racial, ethnic, & gender diversity in this active sector. Through the project proposed in this application, VentureWell seeks to make gains against the striking disparities in capital invested in women-led science and technology based startups in the climate sector through specialized training, investor diversification, and investment capital availability. 

Confidence, Education, and Experience 

For entrepreneurs, especially first-time founders from groups that are underrepresented in the venture space, it can be difficult to tap into the networks and find mentorship opportunities to navigate the complex process of fundraising. In addition, female founders are more likely to face bias in the decision-making process than their male counterparts. Education and necessary space for learning and development around fundraising concepts can level the playing field. 

Diversity on the Supply Side 

Further compounding the challenge for female entrepreneurs is the lack of diversity in the angel investment community. Based on market research compared with data available from the ACA on the number of active angel groups, only about 1% of households who would be eligible to be angel investors, according to the traditional SEC definition, are actively participating and investing in startups. There is an opportunity to make measurable, near-term change in the supply side of capital, that doesn’t require career changes or significant fundraising. Every new individual angel investor who makes an investment has a ripple effect on the community by impacting the due diligence process, the pipeline, and ultimately the support that companies receive. 

Finding a Lead Investor 

Access to capital is a serious and persistent barrier for women-led startup companies: 63% of the female founders in our investment-readiness course cite securing funding as their primary challenge for their technology startups. These founders face long odds in a highly competitive process, despite evidence that diverse founding teams perform better. 

According to a recent SEC Report, women founders receive less than 3% of US venture dollars. There is a growing body of research pointing to bias in investor decision-making as a leading contributing factor in the gender financing gap. This suggests that accelerator training, which alters the entrepreneur’s behavior, is not enough. Altering investor behavior is necessary to begin closing the gap.  

Impact investing has grown rapidly in recent years, yet relatively little concrete information is available about the mechanisms for doing so, the particular challenges and opportunities that impact investing brings (which vary depending on sector, market, etc.), and strategies that are effective for supporting underrepresented entrepreneurs. In addition, we find that many investors remain wary of investing in very early-stage companies in regulated industries, such as ClimateTech, because these investments naturally bring with them more risk than later-stage investments despite their potential to deliver outsized impact. As a result, too little capital is available to these companies.

VentureWell is actively formulating solutions in all three identified areas. With our Aspire ClimateTech Program, we seek to recruit a cohort of female founders for a 5-week, immersive program engaging with climate sector-specific information, mentors, and networks they need to seek full access to rapidly expanding capital available to startups in the sector. Through the program, startups will 1) develop a viable fundraising plan 2) specify milestones to complete before the raise and with the raise 3) determine strategic direction 4) build a deal room for due diligence documents with advice from mentors, and 5) strengthen the business opportunity & team’s knowledge. Our programs are effective, inclusive, and based on decades of experience meeting unique needs of science- and tech-based founders. Aspire is part of VentureWell Accelerator, a suite of training programs serving early-stage innovators throughout the commercialization process in moving innovations to market. Our approach is outlined in our Venture Development Framework and curriculum. 

We are a partner in an EDA grant with TechTown Detroit, Angel Capital Association (ACA), and Ann Arbor Spark, which enables us to fund and train angel investors from underrepresented groups from the Great Lakes region. Participants enroll in ACA’s Angel University to learn the basics of investing, and then shadow our investor mentors in Aspire. To date, we have supported 89 women, Black, and Latinx angel investors and plan to support at least 200. They are mentors-in-residence for Aspire programs, where they advise from the perspective of their own professional backgrounds (entrepreneurs, lawyers, etc.) and in their new capacity as angels. Leveraging these programs means that participants in Aspire benefit from a captive audience of investors in a mentorship environment to create an inclusive forum for entrepreneurs to build relationships with investors, and set the foundation for a potential collaboration.

In parallel, we are architecting an expansion of our own impact investment fund, which is unique in its integration with VentureWell’s training pipeline, in particular the Aspire program. Our fund is designed to be catalytic, unlocking other capital, and directed to those underserved by the investment community: currently 59% of companies in our portfolio include at least one founder who identifies as a woman. We focus entirely on scientific inventions for impact, especially health equity and climate change adaptation and mitigation. 

Our investment track record is strong: of 28 investments over 12 years, 70% of companies are active or have been acquired, with two profitable exits. Active since 2010, we refined our strategy in 2017 to align with our programming, and investments made since then are performing much better than the previous performance period, even while adjusting for changes in the market and time.  Our current TVPI (total value to paid in capital) is 2.57, in the industry’s top decile, for investments made since 2017. These results suggest that our educational approach is working, and that is significant. We are actively exploring networks and models to expand this work and bring on new funding partners who can build on the pilot. 

VentureWell uniquely targets first-time founders who are commercializing science and technology innovations with a mission to create impact. Often this impact is oriented to problems that the founders have lived experience with and addresses complex global challenges, such as climate change. Our entrepreneurs may not always start out identifying as an entrepreneur; through our programs and their overall journey, we see an increase in confidence and entrepreneurial identity. 

VentureWell’s commitment to increasing equity in innovation & entrepreneurship (I&E) is rooted in working to understand the barriers that stand in the way of full participation. We have cultivated networks and partnerships with those most affected by these barriers and make use of our expertise, relationships, and influence. We collect and analyze data that helps inform and guide our progress. We disseminate our learnings, especially practices that can broaden participation in STEM I&E. (https://venturewell.org/advancing-equity/)  Our commitment is to be attentive and intentional in advancing equity in all of our work, in ways tailored to each of our programs, constituents, and audiences. We recognize that this work had to begin with advancing equity within our own organization. We have shaped internal policies and procedures to create an inclusive work environment that provides opportunities for professional growth, success, and advancement for all of our staff. Within this context, we practice equitable hiring and recruitment and support staff, board members, and partners who represent a broad range of identities. To guide our progress, we have embedded equity in our strategic plans and our organizational goals in measurable ways that enable us to track our success, learn from our efforts, and improve over time.

Complementary to our entrepreneurship support, we aim to build networks, confidence, and opportunity for underrepresented investors. In particular, this includes individual angel investors. The profile of an angel investor can vary significantly, but our goal is to highlight the lived experiences of these individuals as an asset and value-add for the entrepreneurs they mentor, and help them build out their understanding of investment concepts through their programmatic engagement with us. The investors we work with are focused on supporting diverse founding teams solving complex challenges with science and technology inventions; they aren’t afraid of regulatory hurdles or complex markets. 

The work VentureWell proposes support for in this challenge meets the needs of women STEM entrepreneurs on a variety of fronts. We aim to help the individual participants in our training programs build strong, successful, scalable businesses that will support good jobs and contribute to the economic vitality of their communities and the country. We accomplish this by challenging participants to look closely and carefully at potential markets, market size, and competitors, and to use customer discovery to build an evidence-based business model. Our work diversifying the investor community can help to mitigate the effects of bias in investment decisions. VentureWell’s impact investment fund increases the amount of accessible early-stage capital available to women founders in science and tech and is designed to catalyze other investments.

For more than 27 years, VentureWell has been on a mission to cultivate a diverse pipeline of inventors, innovators, and entrepreneurs driven to solve the world’s biggest challenges and create lasting impact. We have a long history of—and deep commitment to—supporting  innovators at US-based colleges and universities through funding, training, and building a vital innovation and entrepreneurship community where collaboration is encouraged and ideas and best practices are shared. A key focus in our work is expanding the participation of historically underrepresented, underestimated, and underresourced students in science and technology (S&T) I&E—specifically those who identify as Black, Latinx, and Indigenous; women of all backgrounds; and individuals from low-income backgrounds.

During this time, VentureWell has supported more than 9,400 early-stage innovator teams and has helped to launch over 3,300 ventures that have raised over $3.9 billion in public and private investment. A 501(c)3 nonprofit, VentureWell has strong, distinguished working relationships with many leading private and public partners in innovation and venture development including the National Science Foundation (NSF), the National Institutes of Health (NIH), the Department of State (DOS), the United States Agency for International Development (USAID), The Lemelson Foundation, and the Bill & Melinda Gates Foundation. VentureWell maintains an active presence with collaborating incubators, accelerators, angel investors, seed funds, and hundreds of colleges and universities across the U.S. and worldwide. We have particular expertise incorporating lean startup methodologies, business model validation for science and technology-based businesses led by first-time founders, and a lens for diversity, equity, inclusion both for the program experience and the impact of the startup itself.

The Aspire Program has a strong track record. Since 2015, 158 startups have participated in Aspire and these teams have raised over $332M in follow-on funding since taking part. Our startups have a 78% venture persistence rate and 145 businesses have been catalyzed as a result. Participants benefit from a 5-week intensive, personalized experience with the goal of crafting a fundraising plan with investor input and preparing the startups for the hurdles associated with securing early-stage investment. Our goal is that there is a 1:1 ratio of startup to teaching team member, whether that’s a staff member, an investor, or an entrepreneur-in-residence. Topics include preparing materials & strategy for due diligence, investor discovery, venture math, financial projections, milestone planning, good corporate housekeeping, negotiating term sheets, strategic partnerships, strategic selling, Board governance, & building teams.  A transformative component in the Aspire program is the networking, peer-to-peer learning, & expertise participants receive from working with investors and each other.

Since it's inception, VentureWell has supported more than 9,400 early-stage innovator teams and has helped to launch over 3,300 ventures that have raised over $3.9 billion in public and private investment.

VentureWell has been growing and refining a suite of programs that have proven to be deeply transformative for STEM-based startups with potential for social impact. In parallel, women-led STEM startups continue to earn small fractions of available venture capital. We see a clear opportunity to scale up our comprehensive program to impact more women STEM entrepreneurs. Simultaneously, we recognize that to drive transformational change against the pervasive myth that impact investing is incompatible with competitive financial return, a body of evidence-based, nuanced information must be built and shared. 

The expertise and advisers associated with Solve and Tiger Global Impact Ventures would bring highly valuable insights as VentureWell navigates the path to scaling each of these initiatives in an integrated way to maximize impact for women entrepreneurs and help us to formulate a body of information that can be shared to illuminate the pathway for others. 

In addition, this challenge is opportunely timed as VentureWell is approaching an interesting convergence moment at the intersections of these programs. We have seen a high participation of angels and angel groups investing in the startups in VentureWell’s investment fund portfolio. Our more recent work in training angel investors is creating an engagement opportunity for this community to support and benefit from our investment activities. Leveraging this moment could result in increases in investment capital accessible to women entrepreneurs.

VentureWell has made investments building deep expertise and strong foundations for each of these programs and is primed to embrace significant growth opportunities.  We would draw insight from Solve and Tiger Global Investments to inform our plans to 1) sustain our momentum, 2) scale impact, and 3) share our impact. 

Christina Tamer leads VentureWell’s portfolio of venture development programs, supporting a community of entrepreneurs, startups, and investors. She has over a decade of experience working with startups as an investor, accelerator program instructor, coach, and program manager. Prior to VentureWell, she worked as an analyst at a seed-stage impact venture fund, where she built a portfolio of 18 technology companies around the world. She has managed investment activity at VentureWell since joining in 2015, building the portfolio of 28 companies, and now oversees the VentureWell Accelerator as well. She brought her experience to influence the investment-readiness offerings and improve investment strategy and operations. She is now seeking to expand VentureWell’s programming and fund, building on what has been developed during her time at VentureWell. Christina holds an M.B.A. and a B.S. in Management from the University of Massachusetts Boston. 

Tricia Compas-Markman implements and supports VentureWell’s early-stage entrepreneur programs, providing training for innovators on topics ranging from customer discovery to investment-readiness. Previously, Tricia founded and led DayOne Response, a technology startup providing clean drinking water solutions to vulnerable communities. DayOne Response was funded through VentureWell’s E-Team program, and received investment funding from the organization (read case study here).  During her tenure, she built a company with international reach, developed key partnerships, invented and scaled water technologies, and secured financing, which resulted in reaching 35+ countries and saving lives. Tricia received her B.S. in Civil Engineering and M.S. in Civil/Environmental Engineering from California Polytechnic State University, San Luis Obispo.

Christina and Tricia both have lived experiences as an investor and entrepreneur, respectively. In recent years, each has begun to build experience on the other side of the table, so to speak. Christina has been building muscle as an intrapreneur stewarding VentureWell’s expanded fund concept, with a vision to raise a $10-20M fund focused on underrepresented entrepreneurs building science/technology startups. Tricia has been leading VentureWell’s investment readiness program and is engaging in due diligence activities for VentureWell’s current investment activities. 

Christina and Tricia are recognized as strong female leaders and credible and respected partners in the field of science and technology innovation and entrepreneurship. Together they support a portfolio of approximately 75-100 unique startups per year– a number that continues to grow. They each serve as instructors for accelerator programs several times per year and serve in an individual mentorship capacity for entrepreneurs. Each take great care in providing delicate feedback to entrepreneurs in the programs, and seek to create inclusive environments and necessary space for our entrepreneurs to learn and grow. Part of what makes them effective instructors and coaches are the lived experiences as women in the field and the relatable and tangible examples, case studies, and stories they can share to illustrate concepts.