Woman-Led VC Fund Invests In Female-Founded Companies, Aiming To Democratize Wealth

L to R, The Artemis Fund Team Leslie Goldman, Diana Murakhovskaya and Stephanie Campbell

According to Harvard Business Review and Crunchbase, only 2.3% of Venture Capital funding in 2020 went to female-founded companies. By this appalling statistic you’d be forgiven for thinking that means women aren’t interested in building companies and businesses. But a quick look at the data around that shows women, and most notably women of color are actually OUTPACING all other business owners and startups. A State of Women-Owned Businesses Report shows that minority female entrepreneurs generate $422.5 billion in revenue for the economy, highlighting how African-American women especially are starting and growing businesses faster than any other demo.

So why is there still such a huge gender disparity when it comes to funding? We have to of course look to systemic issues such as racism, sexism, and the landscape that disproportionately burdens women and mothers when it comes to building generational wealth. These are systems designed by men, traditionally FOR men, so there is clearly room for a major overhaul. One way to do that is having women in the seat of power, making the funding decisions, which in turn is going to make a major impact on the way women enter the entrepreneurial market.

One company that is doing exactly this is the Artemis Fund. The mandate of The Artemis Fund is to invest in female-founded, female-led companies that democratize access to wealth, encourage sustainability, and reduce friction in the care economy. The company is headed up by three female executives with decades of experience sourcing, evaluating and advising female founders – Stephanie Campbell Leslie Goldman and Diana Murakhovskaya. Not only do they want to help some of the best female founders at an early stage of their startup, they are also invested in helping up-and-coming female VC’s in order to change the funding landscape status quo.

We had the opportunity to speak with Artemis Fund co-founding partner Leslie Goldman who is working to empower women founders on their journey. But Leslie’s own journey to being VC Fund partner is quite interesting and unorthodox to say the least! Perhaps that’s what is needed in the world of entrepreneurship – less orthodoxy and more think-outside-the-box mentalities.

Before co-founding The Artemis Fund with her partners, Leslie was an opera singer in training, turned corporate attorney for 25 years, turned executive recruiter for three years. She has a passion for gender equity, amplifying female voices, continuous learning, and investing. Here’s what she told us:

Artemis Fund co-founder Leslie Goldman

You have had an interesting career journey before co-founding The Artemis Fund! How did you go from Opera singer, to attorney, to recruiter and finally to becoming a VC?

Singing certainly taught me grit, determination and how to focus amongst distractions. There is almost nothing more vulnerable than being on-stage and having people judge the quality of your voice. You have to ignore the naysayers to stay on a career path in any artistic profession. So, I did to a point. But then I decided that I wanted to have more control of my future and, more importantly, I wanted to support myself. 

I didn’t love law school, but I did love constructing contracts. And once I started practicing, I loved putting “deals” together and completing them. Transactions usually have a beginning, middle, and end. And also an arc to them where things go from calm to heated and back to calm (at least that is the hope). I like the idea of “a meeting of the minds.”  

After more than 25 years of practicing law, I wanted a change. Recruiting seemed like a fun profession to me since it was mostly about (a) networking and (b) bringing a new perspective to old-school executives. Ultimately, it was frustrating to see so few women in positions of power. I decided to use my voice to make a difference. Women need to be included in innovation and have the opportunity to lead early-stage companies . I found like-minded partners and we decided to intentionally focus on the other 50% and invest in female-led companies. We gave up our day jobs, salaries, and any sense of a regular schedule and came together to raise money to invest in female founders.    

How did Artemis Fund come about, and where did your initial investing money come from?

Being a female angel investor can be very lonely as you have few female companions in a large room of angel investors. I met my partners Stephanie Campbell and Diana Murakhovskaya at that epiphanic moment and realized we could be agents for change. We were hell-bent on moving the 2% needle of funding that is allocated and the gender-gap when it comes to funding female founders. The data suggested and still does, that focusing on women is a great strategy for producing alpha and impact.

We’ve all seen the abysmal stats for women entrepreneurs — receiving a stagnant 2% of VC funding for the past decade – and that figure dramatically decreases for minority women. How does The Artemis Fund address this disparity?

We are one of a handful of funds (a) with an exclusively female founding/managing team; (b) exclusively investing in women founders who are also the CEOs; (c) investing with an impact lens; (d) intentionally ensuring diversity in our portfolio (over-indexing on diverse and immigrant founders); (e) endeavoring to lead rounds and work closely with our founders through their growth stages as board members or board observers; and (f) based in Texas (with a national reach). As a result, we are sought out by co-investors to participate in seed rounds.  We let our founders speak to our work and our value-add. As our firm matures, we will let our track record speak for itself. 

The Artemis Fund I closed at $15MM in early 2021 and we have seeded 11 (of 15) rapidly growing companies, with over 60% diverse (people of color and immigrants) female founders.

Black women and Latina women are some of the fastest-growing small business owners in the United States. Why is the larger investment world still overlooking female-run and founded business ideas?

That’s a great question — research shows that women are better at high-growth entrepreneurship than men. And at The Artemis Fund, we focus on funding female-led founders that come from diverse backgrounds. In fact, companies with a female founder deliver a higher rate of return (112% vs 48%) than all-male founded teams and a lower risk of failure. I attribute female founders’ success rate to (a) doing more with less money and (b) having (almost universally) a gender-diverse management team and advisory board.

Also, by the time a female founder is ready for institutional funding, she will have gone through many tests of her grit and determination, and have achieved product-market fit, and by generating revenue. She cannot expect funding on an idea, or due to pedigree, or from a funding network.   

Although women makeup 50% of the population and control a dominant share of household spending today, investors and VC funds still shy away from products and businesses that are very female-focused. Can you share any insight into why this continues to happen, and/or what is changing?

I am not sure they shy away, I just think that with 95% of investors being male, they don’t quite understand products whose target demographic is female. Women make 85% of all purchasing decisions, so shying away from what appeals to them makes no business sense. 

Can you tell us about some of the companies you are currently investing in, and why you chose them?

It is hard to single out just a few, so I’d encourage readers to look at all of them on our website.  Here are just some of the companies we’re invested in:

  • UNest: Our very first investment in July 2019. UNest CEO Ksenia Yudina created an app focused on financial inclusion through access to education. UNest allows the other 99%, in 3 minutes, to set up a 529 college savings plan with as little as $25. Laser-focused on her user base (income levels between $30,000 and $90,000 annually) she pivoted from 529s to more general tax-advantaged investment accounts for parents. UNest saw their user base soar during COVID as surveys showed that families’ number one concern was saving for their children’s education.   

We led the Seed round for UNest  Since then, UNest has had three additional rounds at higher valuations, with the Series B round just announced on November 17. Our fintech expert/Artemis advisor Frank Mastrangelo serves on the board, and I was officially added in the B round. 

  • DressX:  DressX, founded by Daria Shapovalova and Natalia Modenova in 2020, is the first multi-brand store of digital clothes. Their product adds virtual clothing to any image, making it look like the person is actually wearing these items, whether in Zoom, Snapchat, Instagram, TikTok, YouTube, or gaming.  A key mission of DressX is to reduce the amount of CO2 and water emitted by fast fashion and the serial purchasing of single-use clothing to wear to a digital media event. Their solution reduces waste,  makes fashion accessible to more consumers, and provides -consumers with access to different designers.
  • GoodFynd:  Goodfynd is a marketplace and payment platform for food trucks. Goodfynd has revolutionized the way food trucks interact with customers, allowing these small businesses to increase revenue and earn sustainable wages. 
  • CNote: CNote is a fintech company providing a fixed income impact product for enterprises, asset managers, foundations, and other allocators of funds. CNote’s technology allows investment dollars to flow from the impact investor through fixed income loans into local communities or causes through CDFIs. 

The gender equality aspect of equal funding is a given. But can you also tell us why investing in more women is good for the overall economy, and how everyone benefits?

Since we know that female founders receive approximately 2% of the overall venture capital funding dollars, we are losing out on an estimated $2.5T to $5T in GDP and immeasurable innovation. Entrepreneurship is considered a central path to job creation, economic growth, and prosperity; small businesses contribute 64% of new job creation annually in the United States. So imagine what we are leaving on the table by not allocating even 5%, 10%, or 20% to the other half of the population?  

As COVID has impacted so many people, but especially working mothers, are you seeing more women turning to entrepreneurship right now?

COVID has indeed hit women hard. They have lost more jobs, have had to double down on multitasking, have accepted yet another unpaid job as a homeschool teacher for their kids, while continuing to run their household on a tighter budget. Starting a business in these conditions is tough for anyone, so if a mother can do it, I’d bet on her. I believe that more women have found creative ways to work from home and make money by using technology, and, in particular, social media. But it has been harder for them to raise money to build scalable businesses and many had to put their ideas on hold.   

For women out there looking for investment and funding, how can they get in touch with The Artemis Fund, and what advice would you give them in terms of material/info to share?

The best way is by following us on LinkedIn and checking our website.  As for information, there is so much out there — from deck construction to how to pitch investors and create term sheets and how to information on the thesis of each and every VC firm. If you are looking for gender lens-focused funds, look at Project Sage. If you are looking for industry-specific funds, go online to Crunchbase or PitchBook. And there are tons of organizations with mandates now to help female founders. If you do the work, it will pay off. I am an optimist. 

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