Women Funding Women: An Interview with True Wealth Ventures
Having recently received a $250,000 federal grant and made its first investment in a female-founded Austin business, True Wealth Ventures is one venture capital fund that’s ready to lift the under-funded sector of women-led companies in Austin and across the nation. Read on to find out what inspires True Wealth Ventures’ founders Sara Brand (pictured left above) and Kerry Rupp.
foundingAUSTIN: Tell me more about the goal of True Wealth Ventures.
Sara Brand: Our goal is to have a $20 million fund so that we can invest in 10 to 12 early-stage companies with at least one woman of significant decision-making authority on the founding or executive level team. We're proactively looking for sustainable consumer and consumer health companies in and outside of Texas.
fA: What does early stage mean to you?
Sara Brand: For us, it means the company can have no revenue, early revenue or even a minimum viable product. The company should have a business idea that can scale really quickly and be seeking equity financing on a seed stage level. Meaning, less than a couple million dollars.
Kerry Rupp: We’re looking for companies that haven't had any professional investors in yet. Generally, it means they haven't received what's considered institutional capital. The other thing is that they're usually figuring out product-market fit. Maybe some investors will invest before that, others will invest after. Seed, again, ranges. It definitely doesn't mean they've figured out how to scale and ramp it yet. They're just beginning to understand that the market cares about their product.
fA: Can you explain the sustainability and health angles for your ideal portfolio companies?
Kerry Rupp: Sustainable consumer is based on the premise that women make 92 percent of home purchase decisions and most remodel decisions. Therefore, looking at the home from the inside out, anything that's more sustainably produced or has fewer chemicals is going to be more appealing to that market segment. Literally anything from sustainably-produced building materials, eco-friendly appliances and smart windows, and internet of things home automation, to any goods, supplies and foods inside the home.
In the consumer health segment, We're not looking at products that require FDA regulatory processes, but the kinds of things that a consumer might buy themselves, from software to wearables to other solutions that are proactive for their health.
fA: Tell us about your backgrounds.
Sara Brand: I got my BS in mechanical engineering here at UT, and then my masters and PhD at UC Berkeley. I spent 20 years in the semiconductor industry then transitioned into venture capital out in the Bay Area. When I entered venture capital, I realized that's what I wanted to do long term.
It wasn't until I was asked to be an executive sponsor of the Global Women's Forum at the big tech company I was working at that I started looking into the numbers and realized how rare it was to see a woman in technology. Then I realized I had never actuallymet a woman in VC.
This inspired me to look at the numbers, which is when I really discovered how few women there are in this industry. Some think about 1 percent of VCs making investment decisions are women. In terms of women getting funding, 2.7 percent of all VC-backed companies have a woman CEO. It's very, very underfunded and under-represented.
I saw this as an opportunity and got really excited about it. It was also a great fit geographically, because the very few early stage VC funds that have a gender-diverse strategy are on the coasts. There was nothing in this whole region, let alone the state. As soon as I verbalized that I had never met a woman in venture capital here, several people pointed me to Kerry. That's how we met.
Kerry Rupp: To build on Sara’s point, this underfunding is happening despite the fact that companies with more women on the team outperform those with fewer. Women also start businesses at two times the rate of men. Texas, specifically, is ranked number two nationwide for the growth of women-led businesses, so there's just a lot of opportunity here.
I went to Duke for undergrad. I have a Biology degree and eventually got an MBA from Harvard. My first job was with Andersen Consulting, coding software modules. Then I moved to early-stage startups. I did everything from product management to marketing, business to strategy, for a whole series of early-stage companies that were eventually acquired by bigger companies or merged with other start-ups.
In 2008, I started my own company called Holiday Go Lightly, which was focused on girlfriend getaway trips. Unfortunately, 2008 is when they coined the term staycation, which is not great for a luxury, niche travel company. I shut the business down, but then went to work with some former business partners on an accelerator called Dream It Ventures.
Dream It Ventures helped early-stage companies get launched in batches. We did ten to fifteen companies at a time in a cohort for three months. We gave them a bunch of resources; everything from cash to donated legal services and mentorship, in return for some equity in the company. Then we tried to get them in three months to the level it would normally take them maybe a year to achieve on their own.
During the course of my tenure as the CEO there, we helped launch one hundred and fifty companies. About sixty-six percent of them are still operating, and they've gone on to raise over $350 million in follow-on funding.
At Dream It, we helped launch programs focused specifically on health tech, education tech, minority entrepreneurs, and women entrepreneurs. When Sara talked to me about this opportunity and some of the challenges that women entrepreneurs faced, I had experienced it firsthand with several of my entrepreneurs. I understood that there was not only an issue, but an opportunity.
fA: Was there any fear of launching your own business?
Kerry Rupp: There's obviously a huge financial risk when you're doing this. You're not making any money until you've actually raised funding. That, for us, took at least a year. In terms of putting the planning in front of it, you don't have any security or knowledge that it's going to be effective. You have to really be confident that you've got it figured out, which is probably why we have a story that really holds together at this point. We had to know our story was internally cohesive, credible, and successful. You're banking your family's financial future on it. For me, that's just a dog, so the risk makes sense. It's a little bit easier for me than for Sara, who's got kids.
Sara Brand: There was a lot of fear, but I reviewed the pros and cons of staying in my current role and then the pros and cons of starting this business.
Then I did lots of other internal work: determining exactly what motivates me. What de-energizes me? Tying to put definition and shape around what this business would look like. Having that kind of satisfaction and living much more aligned to my purpose, and taking skills that weren't being leveraged nearly as much as they could gave me the confidence to take that leap.
Kerry Rupp: In part, for me, since I had immersed myself for a number of years in a really, really early-stage entrepreneurial environment, I was working every day with people who had quit their jobs. Some of them were starting a family and putting all this money on credit cards, and really going for it. When you see that happening around you all day long you begin to understand that there's still a backup plan for people whose companies don't work out. They can get a job again.
Being in this kind of environment helps you see that it's a possibility. Whereas, I think if you're in an environment where everyone has a steady job and security, maybe it looks scarier. If you get more comfortable with understanding what people's paths have been and what trade-offs they've made and how they've saved in certain areas in order to allow themselves to take these risks, then you see those opportunities as options.
fA: Are there any organizations that you are a part of that you would recommend an entrepreneur join?
Kerry Rupp: Sara and I are both in the steering committee of a group called Women At Austin which is a non-profit group here in town focused on trying to make Austin the number-one place to be a woman entrepreneur. We have a whole series of different events and activities, some of them targeted towards the want-to-be entrepreneur, some towards the young entrepreneur, and some toward more senior, experienced women.
There are a lot of groups in town. Two sources people can use to start looking are Start-Up Digest, which is an email that comes out every Monday morning, and Meetup.com.
fA: What specific advice or information would you give to someone who wanted to build a start-up?
Kerry Rupp: Talk about your idea or concept a lot. Often, people think they have an idea and they should protect it and hide it so no one steals it from them. But the more people you talk to about your opportunity, the more feedback you're going to get, and the better chance you’ll have of refining the business model to make it work.
Now, if you have protectable intellectual property, of course you should go legally protect it or patent it. But if it's really about just your business idea or how you're going to go to market, the more people you can talk to, the better. This can also help you get connections to potential resources or investors or feedback. Along those same lines, not requiring an NDA when you're having conversations with investors.
Sara Brand: I would say, for women in particular, there's a tendency to want to have everything fully baked before talking to people. Instead, it may be better to just get out there and start talking and making connections. Don't wait until you have the perfect pitch deck to show to somebody. Get feedback early.
To find out more about the companies True Wealth Ventures is interested in funding, visit TrueWealthVC.com/about.