Leslie Feinzaig, a venture capitalist, likes that her venture firm, Graham & Walker, sounds like an old, stodgy law firm. But apart from the name, there’s nothing really stodgy about it: Her fund exclusively invests in female- and nonbinary-founded startups.
It’s a relatively new name for her firm, which was originally called Female Founders Alliance. Feinzaig rebranded in 2021 in an effort to attract a more diverse set of founders and check-writers into her portfolio.
“The number one risk that we fall into is inadvertently stamping our own portfolio with a diversity signal,” she said. “And I mean that in the negative context of the word: We want our founders to stand on their own for being amazing founders. So what do we need to do? We need to become a super, high-signal VC.” In her view, that meant departing from a name that made her firm sound like it was making “diversity investments” and finding a name that didn’t include gender as a brand.
Now, she said, when she enters a room, “It’s very different to be Leslie, the CEO of Female Founder Alliance, than Leslie, managing director of Graham & Walker. Nobody questions it; it sounds like it belongs.”
That said, the investor still found a way to insert the mission into the name: Katharine Graham was the first female Fortune 500 CEO, and Madam C. J. Walker was the first female self-made millionaire.
The goal of being a VC is to generate returns for limited partners, and there’s an understanding that a diverse startup ecosystem will lead to better outcomes for all. Balancing those two, for female VCs, has often manifested in different, often frustrating ways.
A new generation of female venture capitalists is ditching institutional firms to start their own or steadily rising through leadership ranks. According to a survey analyzed by TC+, the share of women represented in director and principal positions has significantly increased over the past two years, while the percentage of women in higher-level positions, such as managing general partner or senior managing director, stands below 25% and has for the past two years. The ranks are diversifying. Slowly.
To put it simply: More women in venture means that bias and strategic branding are increasingly relevant for a larger fraction of check-writers.
“He never gets a wedding dress startup”
These assumptions that women-led VC firms are exclusively backing women, certain categories, or are investing through a diversity-focused lens not only holds these investors back but also the whole industry. Because of this bias, women-led funds aren’t reaching their full potential, and underlying startups could be missing out on potential cash or value-add.
Jenny Fielding doesn’t have a firm with outward branding around diversity. Founders just assume that since she’s a female investor, The Fund invests in e-commerce and DTC businesses. But how she handles the assumptions can be tricky, she said. She sometimes fires back a curt email, but she said she’s not trying to upset LPs or potential collaborators who may have their hearts in the right place.
Still, the assumptions people make can be hard to ignore: “I have a co-founder, he’s a white guy. He actually does a bunch of consumers; we wouldn’t say it’s a key focus for either one of us, but he does more,” she said. “He never gets sent a wedding dress startup.”
It’s also difficult for women-led firms to raise their funds. Red Bike Capital co-founder Rachel ten Brink said she often finds herself having to push back on the assumption that she only invests in Latina or female founders, which many prospective LPs assume. Rather than highlighting what her fund does, she said she often wastes a lot of time explaining to potential LPs what her fund doesn’t do.
“If you have 30 precious minutes with an LP, what do you want to be spending time on? Explaining what I don’t do is not exactly helping that LP in why they want to invest in me,” ten Brink said.
Ed Zimmerman, an LP through First Close Partners, said that these biases contribute to women VCs closing smaller funds and thus getting overlooked for speaking engagements or press that could hurt their visibility and potential deal flow down the line.
But LPs can help break this cycle by advocating on behalf of their VC managers, he said. They can praise these funds for what they are actually doing to cut through some of the noise.
“LPs have the ability to go out and work on behalf of the unrepresented managers and to lead with, ‘Hey, this is a fund that has done an amazing job in cybersecurity and enterprise software’ and talk about those accolades,” Zimmerman said. “LPs can talk about the bias they see their female-led funds encounter and how to avoid that bias or how to call it out and move past it.”
On the other side of the table, some female founders express a trickle-down effect that hurts fundraising chances with female investors.
Trisha Bantigue, co-founder of formalwear startup Queenly, said that female VCs often pass on speaking to her about her company because she thinks they’re worried that backing a female-founded business shows favoritism. As a result, Queenly has had more success with male VCs. She said she’s raised over $9 million in venture backing, and 95% of her cap table is made up of men. “If you look at my cap table, it’s frickin’ weird,” she said, noting that YC’s Michael Seibel is an investor, as is basketball player Carmelo Anthony.
Bantigue said that she thinks some female VCs need to focus less on overcorrecting and more on lifting up other minorities, even if outside of the investment zone. “These VCs are female first, VCs second,” she said.
“The majority of VCs and the ones that have power to write a check are male,” she said. “So if they don’t get any insight or advice or anything from their female partners, who’s gonna vouch for the founders? Vouch that their market is valid and that their product is needed?”
Even still, there’s a power in supporting without being extremely explicit. A few years in, Feinzaig said that the rebrand to Graham & Walker ultimately gave her “way more confidence.”
While the diversity of her portfolio stayed consistent, the VC saw the impact when fundraising for her initial fund. The name change happened about 20 months after she first started raising the fund; she soon saw that the “something bigger” branding resonated with LPs looking to write checks.
“It takes more for us to explain who we are. But that makes everyone understand us better,” she said. “It is a name as big, as serious, as fun and as meaningful as what we aspire to become. It is dressing for the job we want.”
If you have a juicy tip or lead about the venture world, you can reach Natasha Mascarenhas on Twitter @nmasc_ or Rebecca Szkutak at @rebecca_szkutak.