Woman-Led VC Firms Are on the Rise—And Raising Lots of Cash

Jennifer Fonstad and Theresia Gouw left high-profile jobs at A-list venture firms to strike out on their own. Now they've raised $150 million.

Aspect Ventures, a Silicon Valley venture capital firm that focuses on making early-stage investments, has raised its first institutional fund---a significant milestone for one of the few firms led by women in a male-dominated industry. Founding partners Jennifer Fonstad and Theresia Gouw say they are investing in the mobile marketplace, focusing on security, health, and “millennial-focused” services.

Today's announcement comes slightly ahead of schedule. The two prominent investors shocked the industry when they announced in February, 2014, that they would be leaving their big-name VC firms to launch their own venture. At the time, they had been prepared to run Aspect for about 18 to 24 months with their own money, but because there was such a strong market reception, Gouw says, they felt comfortable moving that timetable up.

“For me and Jennifer, Aspect is our startup,” Gouw tells WIRED. “With this fund, we’re able to keep focusing on what we’re excited about in the market.”

The pair has raised $150 million---what would seem modest in an era of multibillion-dollar funds, but which Aspect says is comparable to funds raised for other firms with an early-stage focus and just two general partners. And it is a beacon, because as pressure mounts for venture firms to make diversity a priority, some female investors are bucking the system altogether by striking out on their own.

Not that Fonstad or Gouw needed to set up their own shop to achieve success by any conventional measure. Fonstad was a partner and rose to managing director at Draper Fisher Jurveston, while Gouw was a managing partner at Accel, both A-list Silicon Valley firms.

But you could argue male-dominated firms deserve a share of the blame for the tech industry being dominated by men. Studies show that VCs with female partners are far more likely to invest in companies with female executives and CEOs. Between 2011 and 2013, according to a Babson College study, just 3 percent of companies that received venture funding had female CEOs. Meanwhile, about 40 percent of Aspect Ventures’ portfolio companies have a female founder or cofounder, according to Gouw.

Kathryn Minshew, CEO of the job search and career advice site The Muse, which on Wednesday announced a $10 million Series A round of funding led by Aspect Ventures, says the company didn’t choose to partner with Aspect because the firm was led by two women. “We chose them because they were the absolute best investors for our business,” Minshew says. “To ascribe it to anything else would be unfair to their incredible skills, network and expertise.”

But, Minshew said, it was an added bonus. “It certainly was something that was refreshing in an industry that is not as diverse as some might like it to be,” she says. Other investors in The Muse include two more venture firms, including DBL Partners and QED Ventures, an all-male partnership.

Elsewhere in the industry, other female entrepreneurs, angel investors and venture capitalists are coming together in firms and networks to share funding opportunities and investment advice. Aileen Lee left her full-time job at marquee firm Kleiner Perkins in 2012 to start her own VC firm, Cowboy Ventures. Other female-led funding outfits include Broadway Angels (where, notably, Fonstad is a co-founder and Gouw is a member), Illuminate Ventures, Forerunner Ventures and Aligned Partners, among others.

This is not to say that having women in the lead is the most important characteristic of any of these ventures. These are firms helmed by experts with significant operations experience valuable to any portfolio company. But standing apart form so much of the industry has its own value. After all, so much of success in venture capital, Fonstad told WIRED in a earlier interview, is about listening to your gut. “But you’re not born with a gut,” Fonstad says. “When you have a small venture firm where everyone has similar experiences---where everyone makes the same gut-level decisions---you can create large gaps where you miss out on opportunities.”