Venture Capital Goes Rogue

Jason E. Kaplan
Caroline Lewis, left, managing partner of Rogue Women’s Fund and Kerri Leathers, principal with Rogue Women’s Fund

A Portland-based venture fund is banking on women founders.

Share this article!

Venture capital, by definition, is a field that favors big numbers. It’s a form of private-equity investing offered to startups likely to see dramatic growth in the next few years.

It’s also a field riddled with dramatic disparities — both in terms of who gets funded and who does the investing.

Ninety percent of venture capitalists are men; 97% of venture-capital dollars go to men. Eighty-six percent of all startups funded by venture capital only have men on their teams.

Even worse, Caroline Lewis notes, a majority — 92% — of venture capitalists are white men who went to the same 10 schools.

Lewis is an investor and managing partner at Rogue Women’s Fund, a venture-capital firm that specifically funds businesses owned by women founders.

Venture capital is, Lewis admits, a small fraction of the overall economy. According to University of Chicago research, venture investment makes up only 0.2% of gross domestic product but delivers 21% of U.S. GDP in revenue. Lewis also notes that venture-backed businesses are far more likely to go public.

But not only do women founders receive just 2% of venture funds, the statistics are even worse when filtered for other demographics, like race or veteran status, Lewis says.

“I realized that if I want to create fundamental change and have impact in our society, this is a small but critical aspect of our economy that really can move the needle,” Lewis tells Oregon Business. “I truly believe that Rogue Women’s Fund and other funds focused on gender diversity are helping to build the companies of tomorrow that make up our large population stock and portfolio.”

The fund was started in 2019 under the umbrella of Rogue Venture Partners, a Lake Oswego-based venture-capital firm that makes investments in seed-stage, early- stage and later-stage companies, particularly in the Northwest.

The founders of RWF are not alone in their interest in overlooked founders. Black Founders Matter, a Portland-based fund dedicated to funding Black-founded startups, announced in March it had secured the first close of its first fund, with half its funds going to men and half to women. Portland-based Elevate Capital and Next Ventures are also part of a maturing Portland VC field with an interest in founders their peers might not invite into the room.

Before Lewis came to RVP, she worked in strategy and operations for Nike and as a management consultant. But she got involved with an angel investing group in Portland and met RVP founder Tom Sperry, who asked her to join the company in 2017.

“I had seen ‘Shark Tank.’ I knew the concept of venture capital but really didn’t know the inner workings of it,” Lewis says, but she dove into learning as much as possible.

In August RWF brought on Kerri Leathers, who held senior roles in finance for a series of fintech and biotech startups, eventually holding senior roles in finance that put her side-by-side with CEOs as they pitched VCs to get more funding.

“I was often the only woman in the room and the only Black person in the room,” Leathers says.

She considered launching her own startup and also launching her own fund, but discovered a residency program at RWF and decided to apply.

She says Lewis and Sperry have been supportive of her building her own fund, but she feels like she’s already doing that.

“Everything that I want to do, we’re already doing,” Leathers says.

“Working with startups, there were a lot of them that were bootstrapped, that couldn’t get money, and now I feel ecstatic and fortunate,” Leathers adds. “I’m actually very proud to be a part of venture now — especially the fact that we are changing the landscape of venture and who’s able to get funded, and the types of products that are being funded.”

RWF’s portfolio includes Caregiven, an app designed to help families organize caregiving responsibilities, and AllVoices, an encrypted-software platform that allows employees to anonymously report concerns about their workplace.

“I think any founder will tell you that fundraising is hard. It’s a whole full-time job unto itself, for sure,” says Nicole Schmidt, CEO of Source, an online building-materials marketplace. Prior to founding Source, Schmidt worked as an architect and, later, in the building-supply industry, working as a manufacturer’s representative and doing some business development and marketing.

“I ended up teaching myself to code and built the first version of our platform myself, to really sort of alleviate some of those transparency and simplicity issues that we see a lot in construction. It’s a very antiquated market,” Schmidt says.

Schmidt says she met Lewis before she started the company, when she was still formulating the idea for it, and has found in her a “great mentor” who has helped her learn about the ins and outs of venture capital.

Sperry, Lewis and RVP partner Adam Stoll did about a year of research before deciding to launch a venture fund specifically aimed at female founders, Stoll tells OB.

The fund’s creation is also a natural extension of RVP’s focus on investing in local companies and taking a more human approach to venture capital, Stoll says.

But that doesn’t make it a philanthropic endeavor. In fact, Stoll, Lewis and Sperry came to the conclusion that precisely because women founders are overlooked, there was and continues to be “massive, massive opportunity” in investing in women-led startups, which are five times as likely to become billion-dollar companies and which often yield higher returns and have better operating results, according to data from RWF.

“I hate the view that that what because something you’re doing is the right thing to do, it’s charity,” Stoll says.

Still, the fund is rooted in RVP’s focus on investing locally and maintaining a human relationship with funding recipients — and with each other.

“I like to play ‘The Floor Is Lava’ with my daughter, and she’s 4,” says Leathers, laughing, when asked what she does with her time off.

“I’m very boring right now, because all I talk about is either work or my daughter. But that’s the thing,” Lewis says. “I have been given the biggest gift in life, of being so deeply passionate and connected to what I do when I wake up every day — even on the toughest days — absolutely thrilled and honored to do what we do,” Lewis says.

“We feel that most folks in venture, they are making bets on a huge portfolio, where only one of those companies is the one that’s going to make everything happen for them. So really, you lose a lot of that personal touch with the founders,” Stoll says. “I mean, I start every call with a founder saying, ‘How are you doing, and how’s your family doing?’ Because if that stuff’s not going well, we know that the business is not going to go well.”

To subscribe to Oregon Business, click here