Female Founders: Leslie Goldman of The Artemis Fund On The Five Things You Need To Thrive and Succeed as a Woman Founder
An Interview With Candice Georgiadis
By putting my money, time and energy where my mouth is. By giving up a steady paycheck and using my savings to invest in purpose-driven female founders. These founders are building companies that democratize access to wealth, encourage sustainability, and reduce friction in the care economy. What could be better?
As a part of our series about “Why We Need More Women Founders”, I had the pleasure of interviewing Leslie Goldman.
Leslie Goldman is a General Partner and Co-Founder of The Artemis Fund, a seed stage VC fund that invests in mission-driven female founders across the US. After more than 25 years as a corporate attorney, Leslie turned to angel investing in companies (60+) and funds (11) and reacted to the alarming funding disparity for women by launching a fund with partners Diana Murakhovskaya and Stephanie Campbell to tackle the disparity. The team is launching The Artemis Fund II in Q4 of 2021 to invest in another 20 exceptional female founders.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?
My passions for gender equity, amplifying female voices, continuous learning, and investing led me to this career path.
Prior to co-founding The Artemis Fund with my partners, Diana Murakhovskaya and Stephanie Campbell, I was an opera singer in training, turned corporate attorney for 25 years, turned executive recruiter for three years. I believe the winding path has given me an enriched and unique perspective as an investor. Along the way, I invested in 60 companies and 11 funds before my “aha” moment after one-too-many experiences as the only woman in a room full of male investors; watching pitch after pitch from all white male teams with advisors and board members who mirrored them. When I met Stephanie and Diana, they were reeling from the same “aha” moment.
The three of us had been researching the paltry amount of funding women founders receive (only 2–3% over the past 10 years of the trillions invested) and reviewing the evidence that shows female founders outperform their males counterparts when they do get funded. We all wanted to create a path to getting larger dollars to these overlooked founders to further prove out this data. I view it as low hanging fruit — money left on the table and innovation missed. How are we leaving out 50% of the population? To boot, women-led companies are solving problems that are completely undetected, or even obscured, by men. Thus begat The Artemis Fund.
The mandate of The Artemis Fund is to invest in female-founded, female-led companies that democratize access to wealth (e.g. CNote, Goodfynd, UNest, Upgrade), encourage sustainability (e.g. DressX and Goodmylk), and reduce friction in the care economy (e.g. HopSkipDrive, Naborforce and Work & Mother). With that mandate, The Artemis Fund has invested in 11 companies, and we are on the way to a 15-company portfolio. We are embarking on The Artemis Fund II to find and fund many more. But, we need billions to close the gender funding gap as a $50M fund can’t move the needle. We simply need more funders, more limited partners (LPs), to demand more from their fund managers.
Can you share the most interesting story that happened to you since you began leading your company?
While I can’t share the details of specific companies, founders and investors, I can say that The Artemis Fund’s record will prove that pregnancy makes a determined female founder even more determined.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
I made many mistakes as an angel investor before starting The Artemis Fund. I am not sure they are “haha” funny, but I have certainly learned from them. My personal experience involves investing early in two different, but equally amazing storytellers. Both of these gents raised millions of dollars for their companies and then disappeared. One of them resurfaced in Southern California with no remorse and is surfing and living in a beautiful estate. The other may be behind bars, but I’m not sure.
Our fund’s extensive diligence on our portfolio companies would have uncovered the red flags. As an angel with a small check, my ability to conduct due diligence was limited. I learned the importance not only of extensive background and reference checks but also the need to build a rapport with founders. Developing a relationship with founders allows me to explore their true motivation, authenticity, passion, drive, and grit. Sometimes there is no “there there.” Sigh.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
Yes! My fiance and sons (yes, all boys) have been vocal about their support for the work I am doing. Their encouragement and overt show of respect fuels my confidence, especially since my time and energy is often diverted from them.
I am also grateful for discovering the book Angel by Jason Calacanis. It led me to realize that anyone can learn to invest in startups, at any time and any gender, and even with small amounts of money. Jason has educated thousands of people. Granted, most of them are men, because women have not yet discovered (en masse) that they can have a seat at the investor table. So — I (and my partners) in turn, make it my (our) business to educate women.
Let’s now jump to the primary focus of our interview. According to this EY report, only about 20 percent of funded companies have women founders. This reflects great historical progress, but it also shows that more work still has to be done to empower women to create companies. In your opinion and experience what is currently holding back women from founding companies?
That 20% includes co-ed teams. Of those co-ed teams, less than half have female CEOs or women who are equal owners of the company. The real “telling” statistic is, according to Harvard Business Review and Crunchbase, only 2.3% of funding in 2020 went to female founded companies.
The second question is a false construct. I do not believe there is anything holding women back from founding companies. In fact, statistics show that more women than men start their own businesses. The real question is: why are traditional venture capitalists (VCs) unable to find the female founders? The Artemis Fund has upwards of 3,000 seed stage female-founded companies seeking funding each year. Where are the traditional VCs looking? It is clear that (a) they are looking within their networks for deal flow, or from traditional sources, and (b) they are looking for a certain type of pedigree. In fact, research shows that female founders who went on to secure more than $1 million in funding for their startups attended the same 10 universities and colleges.
To break that cycle, VCs have to be intentional and must source differently. They must make a move from their comfort zone, both geographically and demographically. That move requires looking outside their networks and considering a different type of founder, one who may not be a white male from Stanford or Harvard, a former Google exec, a serial entrepreneur, or a startup accelerator alumnus, such as YCombinator, or another name brand program.
Can you help articulate a few things that can be done as individuals, as a society, or by the government, to help overcome those obstacles?
Yes.
Institutional investors could require that fund managers allocate more deliberately to female-led, female-founded companies.
Male and female thought leaders and investors (angel, venture capital and private equity) could intentionally seek out and educate more women about this asset class and provide them the opportunity to invest.
Fund managers could diversify their investment decision makers, since women are three times more likely to invest in female founders.
And traditional VCs should ask themselves:
How much do we plan to allocate to female founded companies?
How do we screen companies? Can we somehow make the pitch gender blind?
Where do we look for companies? Do we invest in founders in cities throughout the US? Do we look outside the cities with the greatest number of startups? Do we ask for deal flow from VCs that exclusively invest in female founders? Are we broadening our network to non-traditional VCs?
How many female-founded/female-led companies do we see per year? And what percentage of deals do we screen?
Are we training our team on unconscious bias and are we aware of current statistics?
Realistically, however, only the larger institutional investors — the limited partners (LPs) — can sway their General Partners to actively and intentionally act on the questions above. There seems to be a lot of lip service calling for investment in women and minority fund managers. The rub is that most female fund managers are “emerging managers” — i.e., with small funds and no track record. Established LPs — the foundations, pension funds, endowments, government-run agencies, universities — are unable to invest in amounts small enough to allow them to participate in a small Fund (<$100M). They also want to see a track record which, by definition, an emerging manager cannot produce. Since this creates a catch-22, fund of funds — like Sapphire Ventures and Ahoy Capital — as well as family offices and even banks are trying to fill in the gaps for small funds.
This might be intuitive to you as a woman founder but I think it will be helpful to spell this out. Can you share a few reasons why more women should become founders?
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?
Research also shows that women are better at high-growth entrepreneurship than men. 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 this 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 revenue. She cannot expect funding on an idea, or due to pedigree, or from a funding mafia.
What are the “myths” that you would like to dispel about being a founder? Can you explain what you mean?
I think one myth to dispel is that you need to raise VC money. If you can avoid it, you should. If you can bootstrap, raise money from angels, grants, or otherwise, do that first. Once you raise from VCs, you are wedded and accountable to that VC, who in turn is accountable to a whole slew of investors. Putting a VC on the cap table changes the dynamic around the decision making table.
Another myth may be in thinking you can control your own destiny. As a founder and CEO, you will work harder than ever and time will not be yours. To be a successful founder, you have to be truly passionate, incredibly gritty, and determined. Which means you are probably ‘Type A’ and easily addicted to work. The hours in the day and night run together, especially if you don’t have someone who forces you to break away.
Is everyone cut out to be a founder? In your opinion, which specific traits increase the likelihood that a person will be a successful founder and what type of person should perhaps seek a “regular job” as an employee? Can you explain what you mean?
No way. You must be comfortable taking risks. When your company gets to a certain point, you must be comfortable taking money from others. And then be prepared to roll up your sleeves, receive their input, and communicate with them.
As for traits, the most successful founders are passionate, gritty, and determined, and gifted at communicating and developing relationships with all stakeholders. Plus, they deeply understand their market, their customers, and how to serve them. They must focus on the customer experience and closely monitor the changes in behavior and needs of the customer over time.
Without these traits, you are better off collecting a paycheck and enjoying the family.
Based on your opinion and experience, what are the “Five Things You Need To Thrive and Succeed as a Woman Founder?” (Please share a story or example for each.)
I want to premise my comments by saying that these traits apply to both male and female founders. Being female just adds an additional layer of challenges and scrutiny.
A thick skin. Most founders (both male and female) will hear “no” more often than “yes.” Out of 100 pitch meetings, you’ll be lucky to get one “yes” from a potential investor. And if you are a woman, you may have to double or triple that number, as research shows unconscious bias. Power through and know your value.
Passion. Passion for your product will drive your persistence, a necessary ingredient in overcoming the naysayers, the difficult times, and of course, the grind of fundraising. The COVID-19 pandemic has been a true test of persistence and passion. We saw it test the founders in our Artemis portfolio. They passed. Passionate about their product and service, they came out stronger. The founder/CEO must motivate, steer, collaborate, and communicate her vision to the entire (at first small) team. The CEO must fuel the team and create the culture. A great leader can authentically convey optimism at the most challenging times.
Female leaders are under greater scrutiny since there are fewer. Every female founder and CEO knows she is a role model. Given her visibility, the pressure to lead and give voice to the vision of the company while demonstrating resilience, creates a greater responsibility.
Vision and the ability to communicate that vision.To raise money, you have to tell a story that resonates with investors. We know that unconscious bias plays into the outcomes, but a clear articulation of the problem and the (differentiated) solution is critical. And, of course, any founder needs to be able to convince investors that (i) there is a huge market for the product, (ii) the scalability is “venture-sized” from a return standpoint, and © she has a strong and well thought- out go-to-market strategy. Ladies — know your numbers!
Ability to attract and retain talent (employees, advisors, board members). Surrounding yourself with talented people will enhance your ability to raise. The blunt reality is that the pedigree of your team — track record as founders and operators, where they worked, went to school, their connections — unfortunately, make a difference to some investors.
How have you used your success to make the world a better place?
By putting my money, time and energy where my mouth is. By giving up a steady paycheck and using my savings to invest in purpose-driven female founders. These founders are building companies that democratize access to wealth, encourage sustainability, and reduce friction in the care economy. What could be better?
You are a person of great influence. If you could inspire a movement that would bring the most amount of good for the greatest number of people, what would that be? You never know what your idea can trigger.
Limited partners (LPs) need to step in and require their general partners (GPs) to invest in women. They need to mandate that a certain percentage of their investments be directed into women-led companies. We have managed to get legislation passed requiring female representation on boards, yet we can’t seem to fix the gender disparity at the very beginning of the funnel — having women in the C-suite from the very nascent stage of a company.
We are very blessed that some very prominent names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why? He or she might just see this if we tag them.
There are so many amazing people that are making a difference and doing amazing things for gender equity. Here are just a few of the people I would love to meet:
Melinda Gates. She is doing all she can for gender equity.
Serena Williams. She is investing in female founders and using her purse as well as her brand to help female founders.
Arc Equity’s Cathy Wood, who is using her financial strength and celebrity to put a focus on environmental, social, and governance (ESG). She’s an incredibly successful female investor.
Marla Blow, who is one of the few black female founders in fintech. She led ESG efforts at Mastercard and is now the CEO of the Skoll Foundation, working on some incredibly important initiatives around financial inclusion and climate change.
Jeff Skoll is a philanthropist with a focus on social impact and driving positive change by focusing on things that matter.
Betsy Cohen, a female pioneer in fintech,
Jacki Zehner is giving a voice to women, calling on them to invest and move millions to women’s causes.
All the incredible gender-lens investors, promoters and thought leaders. And of course, the bold and determined female founders who are working to create the change we need to see.
Thank you for these fantastic insights. We greatly appreciate the time you spent on this.
Female Founders: Leslie Goldman of The Artemis Fund On The Five Things You Need To Thrive and… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.