WE Capital: Leveraging the Power of Female Investors

A new consortium of women investors seeks to break barriers and fund social change.

L to R: Carol Melton, Karen Schaufeld, Sheila C. Johnson, Sachiko Kuno, Michelle Freeman, Ami Aronson, Patrice Brickman, Linda Youngentob, Sharon Virts and Jodie McLean with Rethink Impact’s Jenny Abramson (Photo by Tony Powell)

The women of WE Capital. L to R: Carol Melton, Karen Schaufeld, , Sachiko Kuno, Michelle Freeman, Ami Aronson, Patrice Brickman, Linda Youngentob, Sharon Virts and Gail MacKinnon with Rethink Impact’s Jenny Abramson. Not pictured: Teresa Carlson, Jodie McLean and Rethink Impact’s Heidi Patel. (Photo by Tony Powell)

Three years ago, when former biotech executive and S&R Foundation founder Sachiko Kuno was launching Halcyon Incubator, a program to support and empower social impact entrepreneurs, she says she came to realize the importance of investors. At the same time, she found the field to be male-dominated, leaving her wondering where the women were – and how the lack of diversity in investment teams impacted businesses.

Studies show the imbalance translates into fewer funds for women-owned businesses. A 2016 Bloomberg analysis found that female-led companies get 77 cents for every dollar male businesses receive, nearly mirroring the national pay gap. A more dire statistic comes from the Wharton School, which found that although 38 percent of new businesses in the U.S. are started by women, female founders receive just two to six percent of venture capital funding. Recent reports by Forbes and TechCrunch also confirm that investing is indeed a man’s world: only six to seven percent of partners at top VC firms are women.

In late 2015, Kuno decided it was time to do something about that disparity.

“Many successful women have not had the chance to be investors,” she says, “so I thought we should gather a group of them here in D.C. to invest in other women.”

She reached out to her friend Sheila C. Johnson first. The founder and CEO of Salamander Resort and Spa is also vice chairman of Monumental Sports and Entertainment, making her the only African American woman to have ownership in three professional sports teams. Additionally, she was a co-founding partner of Black Entertainment Television.

Johnson immediately took to the idea.

“I told Sachiko it was absolutely perfect,” she remembers. “I see so many men doing it. They start these funds and women are never allowed to be a part of them, or they’re never asked. It’s about time we do it, too.”

Johnson was also eager to support women-led businesses, lamenting she’d had her own troubles securing funding.

“Even as [an established] businesswoman, I could never get a loan from a bank,” she says. “If I hadn’t had the means I would have never been able to start a hotel company.”

The duo began to seek out other successful area women interested in investing in companies that make a social impact and WE Capital, which formally launches this month, was born.

Today, their consortium of 12 women, working through the venture capital firm Rethink Impact, has already committed over $12 million dollars for gender-diverse companies that have women leaders or women on the management team. Gender diversity on management teams has been shown to improve company’s bottom lines.

Rethink Impact’s founder and managing partner Jenny Abramson and her -based partner Heidi Patel say their firm “invests in businesses trying to solve some of the world’s greatest problems with the goal of generating appropriate returns for investors at the same time.” Rethink Impact’s website lists a portfolio that includes Neurotrack, a women-led, computer-based brain health test, and Purpose, which boasts a mixed gender leadership team and helps people start political and social movements through technology.

“What WE Capital is doing is investing in women venture capitalists who are in turn investing in gender diverse teams, so they’re multiplying the impact,” Abramson says.

It’s a model that drew in many of the consortium’s members, who may also become advisors to the companies benefiting from their funds.

“The idea that women could support other women, participate in the venture capital world and have the same type of returns, if not better than men, was really fun,” says member Karen Schaufeld, a philanthropist and entrepreneur, “but it’s also really nice to be able to think that we could do something that would help start, nurture and grow businesses.”

Sharon Virts, who has nearly 30 years experience leading companies in the male-dominated federal market adds, “Women make decisions a whole lot differently than men do. Men tend to be profit driven, while women tend to be mission driven.”

“The profit is important,” she adds, “but it’s the mission that you’re investing in.”

This story appears in the November 2016 issue of Washington Life Magazine.

 

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