Fairlight, in collaboration with The Silicon Valley Podcast, is launching the Social Impact Leaders Series, spotlighting groundbreaking philanthropists and social entrepreneurs who are striving to elevate communities, improve the economy and protect the earth. These discussions are summarized and edited excerpts from interviews conducted by Shawn Flynn with social impact leaders we think you should know about.
We kick off the series with an excerpt from Shawn’s discussion with Sharon Vosmek, Managing Director of the Astia Fund, Managing Member of Astia Angels and the current CEO of the nonprofit Astia. She is well regarded around the globe for her opinions, research and commentary on the importance of women leaders as integral to innovation and high performing entrepreneur companies.
Sharon Vosmek, CEO of Astia.org: I do like to give its history to really honor where we come from. We were founded by Kate Luthor, who was the Chief Marketing Officer at Cisco at the time that it went public. When Kate looked around Silicon Valley back in 1999, she observed that 2% or less of venture capital was being invested in companies that included women anywhere on the founding team. And this for Kate became a bit of a mission and focus and she launched a foundation called the Three Guineas Fund. The Three Guineas Fund had a program within it called the Women’s Technology Cluster. We spun out as our own organization in 2003, recognizing that this work really required a unique focus. Access to Capital wasn’t something that is broadly understood. It’s a very Silicon Valley specific endeavor. High growth entrepreneurship requires a very specific network, a very specific focus. And Astia.org really was designed to address access to capital as it relates to companies that include women leaders. We started as a physical incubator, every year inviting 12 to 20 companies to join and go through our program. The program was pretty straightforward: access to experts, access to legal advice, access to space. And what’s really been curious about Astia, since the beginning, is that we’ve taken the time to always reflect upon our impact and how successful our programs are.
The first business case was written about Astia by Professor Tom Kosnik at Stanford. We had some key learnings about our lovely little incubator, that while the companies were succeeding, more than 30% of them would secure funding within one year, which was phenomenal as compared to other companies broadly in the market. But most specifically, for companies that included women, the market was not changing, and we were not influencing venture capital. And so the business case really highlighted two reasons why. One was that VCs when interviewed about the Women’s Technology Cluster said, we love incubators, we love getting deal flow from them. And then when asked, what about an incubator that focuses on women-led companies, and they said, “Oh, well, that can’t be high quality. Those would be below market companies.” We were given the direct quotes. Lesson Number One was that no matter how great our work, and how great the companies, there was going to be this perception issue that we needed to address. Good learning. Second learning was that physical space was not the differentiator for these companies. When the companies were interviewed, the majority of them actually didn’t want or value the physical space that we had as an offering. And yet, we were spending millions of dollars annually on space. So we moved away from the incubator model. After six years of operating in that model, we became an accelerator.
People often ask, well, what’s an accelerator and how is that different than an incubator? An accelerator is a virtual experience or a virtual incubator. And what we did as an accelerator was focusing on the thing that was the differentiator what we had heard from our companies. While they didn’t need space, what they did need was access. And they needed access to networks, networks that provided expertise and networks that provided capital. We doubled down on building out a community. And it was during the accelerator phase that Astia grew from 20 mentors here in Silicon Valley, to over 1,300, around the globe. How we did that was pretty simple. It’s how networks work. To become an Astia Advisor requires 15 years or more experience in your industry. If you’re an entrepreneur requires that you’ve raised venture capital for two or more companies. For someone else in the ecosystem, you have to have touch points directly into the innovation economy. Then we started finding those people and the relationships naturally extended.
The other key thing we did during our accelerator phase was another business case. We had a great learning, which was how important words were, especially as it relates to the type of work we’re doing. And words, help people opt in and opt out. They helped define who we were. We did a word exercise where we rebranded as Astia, because we learned that being called the Women’s Technology Cluster actually excluded men by putting the word women first. Astia became inclusive of men. We also then learned about the word mentor, and that it has its own hierarchical connotation. Gender already has a hierarchy. We know this in finance that around the world, women and men relate to money differently and have a different hierarchical relationship in the home relative to money and in the workplace relative to money. They’re paid differently, there’s a wage gap, there’s all sorts of gaps. There’s a hierarchy. Well, “mentor,” if it has a hierarchy, seems to reinforce or potentially harm women, if they’re the “mentee” and they have a male mentor. We did a very simple test. I like to think of Astia as my social experiment. We rebranded our mentors as Astia Advisors and overnight, our funding success rate went from a 30%, funding success rate to 60%. Overnight, by changing one word, we learned that our community, if they were advising our companies, actually would invest in our companies versus mentoring our companies who would help them. And our companies do want help. That’s always helpful. But we are formed as an organization to ensure access to capital. Our measure of success is, “Do you successfully raise money through Astia?”
During our acceleration period, we had our 10-year anniversary to reflect on our impact to the market, and our success with the companies we’re serving. A key learning in our 10-year anniversary was, and Shawn, would you like to guess the answer to this question? After 10 years of work, what percent of investment dollars into companies led by women had we achieved? We started at 2%.
Shawn Flynn: I have no idea. I want to say 10%.
Sharon Vosmek: We were at 2%. Wait, what? It hadn’t moved! We knew that what we were doing was working for the companies we were touching, but nothing was changing in the venture landscape as it related to percentage of dollars going into companies that included women leaders, as well as number of deals being done with women leaders. This is a very curious. I’m an economist. In my background, I got very interested in where the research was around the nature of venture capital and the nature of the high growth economy and what might be the barriers to change. We identified that our community, while it was investing in the companies that we touched, needed a mechanism to do it under our name and our work. The reason for this was that we were not going to be able to change VCs unless we were peers to those VCs. We needed a mechanism to join them, as it were, rather than sit alongside them in the abstract. We needed to be in the cap table. So we launched Astia Angels in 2013, which was our first investment program. I love Astia Angels. It’s one of our favorite programs because it took some of our near and dear advisors who were very engaged in our work and helping us source and screen companies to actually commit to writing checks and doing it in a very meaningful way to ensure that we could participate in the venture community more actively and more directly.
Shawn Flynn: Can you talk a little bit about the investment thesis for Astia?
Sharon Vosmek: Our thesis is one of inclusion. It’s actually not only, but it is absolutely that we value women as leaders. First and foremost, we absolutely value women as leaders, but equally, we value men at the table. We look at teams that have a woman in a position of equity and influence. We’re not looking for women only and we’re not looking for women only in a certain role. But we do expect that she’s at the table when those strategic conversations are happening. We equally expect that she’s in the cap table and going to see an economic benefit from this. Because our mission is best served if the women win and move them into positions of power, equity and influence. We’re really about disrupting the whole economic system. We don’t just want her there as a token. we need her there as a participant, both in the innovation and in the outcome. We will invest across the sectors of the innovation economy, that’s high tech, software, hardware, life sciences, med devices. We will look at medical health, we’ll look at digital health, we’ll look at clean tech. Quite honestly, we’ll look at anything that has the potential for high growth and an investor return with a woman in a position of equity and influence. And Shawn, if you see any of those, send them our way, because we’ll look globally, as the angels can invest across all stages. And we will look very thoughtfully at the company, regardless of where she is, if she’s CEO, CTO, CMO, CSO founder, or she doesn’t even have a title because it’s too early to have a title. But she’s there contributing, being valued and leading.