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BBG Ventures just closed on $50 million to fund more women-led startups

BBG Ventures, an eight-year-old, New York-based seed- and early-stage venture firm that only backs founding teams which feature at least one woman, just locked down $50 million in capital for its third fund, a major leap over its first two funds, both sized at $10 million.

One determining factor in the bigger fund is that BBGV, formerly backed exclusively by AOL (now Verizon Media), now has a broader pool of institutional and individual investors, including the State of Michigan Retirement Systems, the George Kaiser Family Foundation and Verizon Ventures, along with Poshmark cofounder Tracy Sun, ClassPass cofounder Payal Kadakia, and venture capitalists Aileen Lee, Theresia Gouw, and Jennifer Fonstad.

The young firm also has a track record to which to point. Though an investment in the coworking space The Wing may have taken an unexpected turn, hurt by a national lockdown and internal turmoil, other bets have been growing, including the e-commerce platform Zola; the feminine hygiene brand Lola; and Spring Health, a mental health benefits platform for employers that recently closed on $76 million in Series B funding led by Tiger Global Management.

That’s saying nothing of the vast and underserved opportunity to invest in women-led teams that BBGV’s founders, Susan Lyne and Nisha Dua, believe most venture firms still don’t fully appreciate.

We talked earlier today about why that is with Lyne, who is a former ABC president, former Martha Stewart Living CEO and former CEO of AOL Brand Group; and Dua, who is a former lawyer, management consultant, chief of staff to Lyne, and founder. Our conversation has been edited for length.

TC You’ve raised $50 million. What size checks will you be writing? Are you looking to take bigger positions or do you have a more diverse approach?

ND: We’re looking at writing $500,000 to $1 million checks. We look for 7.5% to 10% ownership, and we’re open to co-leading, but we prefer to lead. We’ve been leading rounds already with this with this fund. We’ll likely do about 30 companies from the fund, backing a mix of pre-seed and seed-stage startups, with reserves for follow-on funding.

SL: We’ve actually done 11 investments; we started investing after the first close.

TC: You’ve invested in nearly 80 startups over the years. What has been your biggest investment to date?

ND: Planet Forward, which was founded by Zume cofounder Julia Collins.

TC: Have you — or would you — ever form a special purpose vehicle to invest more in a startup than your fund enables?

SL: We didn’t do it for our last funds, but we did our first SPV for this fund, in a company called Starface, which is skincare company that takes a very different approach to the acne problem. You’ve probably seen the gold stars [that its customers apply to their pimples] on social media. They’ve been growing very fast and did a Series A recently and we took part of it ourselves but we also opened an SPV for one of our LPs.

TC: What themes interest you right now?

SL: We’ve done a lot of investing thus far in health and well being. That’s our largest category. The second is the future of work and education; the third is climate-friendly commerce; and the fourth is really underestimated, or emerging consumers. In all of those areas, we have actually found there are many, many, many female founders who are active and building great companies

ND: Also, we [have historically] described ourselves as a consumer fund, but we are doing more B2B in this fund, where we think that the B2B approach could solve a bigger consumer problem, including for many millions of consumers.

TC: What’s an example of what you mean?

SL: Grayce, which is doing eldercare and actually selling to employers as an employee benefit. If you look at the cost to companies because of the number of hours and days that many people invest in taking care of an aging parent or trying to figure out what the next step is for them [you appreciate the need for this kind of service]. This platform not only allows you to connect with someone who can help you plan but also points you to the resources you need, including financial resources, legal resources, and living resources.

ND: Another is Full Harvest, a marketplace and logistics platform that takes all the excess food on a farm that doesn’t meet cosmetic standards and resells it to juice and salad makers and other food brands and manufacturers.

TC: You mentioned Julia Collins. Do you know how many first-time founders you’ve backed versus repeat entrepreneurs?

ND: There’s a mix. We don’t have a preference.

TC: Do you have a geographic focus?

SL: I would say, New York City is definitely our primary source for for companies for a lot of reasons, including that there’s a very rich and active female founder community here. This is the headquarters for many different kinds of industries, so you get a range of talent here. But we’ve also invested in San Francisco companies, companies in Los Angeles, in Milwaukee, in San Diego. [We see] opportunity in at least a dozen cities across the country.

TC Have have your syndicate partners changed over time, if at all?

ND: That’s been one of the most exciting things of the past few years. We love to partner with women GPs — folks like Kara Norton of Upfront Ventures and Jess Lee of Sequoia. There is a great spiderweb of women GPs emerging at these top venture funds who can create these strong relationships and are ultimately leads for follow-on rounds.

TC: Do think women-led teams are receiving the valuations they would if they were all-male teams? I was horrified to read earlier today that the wage gap between men and women has improved by 8 cents over the last 25 years. 

SL: I can’t speak authoritatively about whether women are getting lower valuations across the board. We certainly know that they are getting a vastly lower percentage of the venture capital investment. If you look at the stats about the amount of funding for women in 2020 versus men, it’s definitely disturbing and shows the vast majority of venture capital is still going to all all male teams. I think some of that is due to the megarounds that we’ve seen, but not enough of it to make a significant difference.

ND: I think it was Harvard Business Review that did some really interesting research at a [2017] TechCrunch Disrupt event that overwhelmingly suggested that men are judged on their potential and women are often judged on their current expertise, and we [might] surmise that [these factors] could have something to do with valuations.

It’s why we’re leading rounds. We see the opportunities that these female-led teams are going after — and we have the opportunity to assess them on their exact merits.

The Wing poaches Snap’s comms director

Women-focused co-working space The Wing has hired Rachel Racusen as vice president of communications. Racusen has been the director of communications at Snap, the developer of Snapchat, since late 2016.

Racusen’s exit represents the latest in a series of departures at the “camera company.”

Earlier this year, the company’s chief financial officer Tim Stone stepped down. Shortly after, The Wall Street Journal reported that Snap had fired its global security head Francis Racioppi after an investigation uncovered that he had engaged in an inappropriate relationship with an outside contractor. Snap CEO Evan Spiegel reportedly asked the company’s HR chief Jason Halbert to step down as a result of the investigation’s findings.

Racusen worked under Snap’s chief communications officer Julie Henderson, who had joined late last year from 21st Century Fox.

Racusen has a history in politics similar to several other executives at The Wing. Ahead of her Snap tenure, she served as the associate communications director under President Barack Obama . Before that, she was a vice president at MSNBC and the public affairs firm SKDKnickerbocker, where The Wing co-founder and chief executive officer Audrey Gelman worked prior to launching her business.

Four months after closing a $75 million Series C, The Wing is making two other key additions to its management team. The company has brought on Nickey Skarstad as vice president of product and Saumya Manohar as general counsel. Skarstad joins from Airbnb, where she was a product lead on the Airbnb Experiences team. Saumya Manohar spent the last three years as Casper’s vice president of legal.

Backed by Sequoia Capital, Upfront Ventures, NEA, Airbnb, WeWork and others, The Wing has raised more than $100 million to date.

“We’re thrilled to be bringing this group of seasoned and talented women to build out our executive team,” Gelman said in a statement. “The Wing is the perfect home for leaders who thrive on fast growth and want to combine their social values with their work practice.”