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True Wealth Ventures Raises $35 Million Fund II to Double Down on the Thesis that Women-Led Companies Outperform

True Wealth Ventures Raises $35 Million Fund II to Double Down on the Thesis that Women-Led Companies Outperform
 Austin-based seed-stage venture capital firm invests in companies improving human and environmental health with at least one woman on the founding or executive team
More than 75% of capital raised by True Wealth Ventures across Fund I & Fund II is backed by 80% female LPs
True Wealth Ventures is on a mission to transform the VC landscape by maximizing the number of women LPs and augmenting the total investment dollars flowing to women-led companies

True Wealth Ventures announced the close of the Austin-based, women-focused venture capital firm’s oversubscribed $35 million Fund II. The seed-stage VC firm focuses on maximizing the number of women in its funds to invest in women-led companies.

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The Fund II close follows True Wealth Ventures’ 2018 $19.1 million Fund I close — the largest venture capital fund ever raised at that time with an explicit gender-diversity strategy. Fund I’s 80% women limited partners was unprecedented. True Wealth’s total AUM is now about $60 million.

Founding General Partner Sara Brand and General Partner Kerry Rupp lead True Wealth Ventures. The impact VC firm invests exclusively in women-led companies that improve human and environmental health. True Wealth Ventures’ investment thesis is women-led companies perform better financially, yet remain an untapped market. Just 2.3% of total capital invested in U.S. venture-backed startups in 2021 went to companies solely founded by women, and only 14.8% of that capital went to companies co-founded by women, according to a May PitchBook report.

“While our primary mission continues to be getting early-stage capital to female founders whose core value proposition is improving environmental or human health, our secondary mission has been to facilitate more women investing into this asset class as LPs,” said Sara T. Brand, True Wealth Ventures founding general partner. “We not only believe this is the fastest way to change the gender inequality in the VC ecosystem, we also believe it is critical for our country’s innovation economy with the wealth shifting to women.”

Fund II will invest in seed-stage deals, with Brand or Rupp assuming board seats. Health or sustainability impact must be core to the value proposition for True Wealth to invest, and the business must be able to show how they improve outcomes. Fund II will invest across the spectrum of software, hardware and consumer packaged goods startups. First checks typically range between $500,000 and $1 million. True Wealth Ventures LPs often co-invest an additional 50% on top of the Fund’s investment, with total rounds most often ranging up to $3.5 to $4 million. Fund II assets under management (AUM) exceed $35 million to date including special purpose vehicles (SPVs) for co-investments.

True Wealth already has made three investments from Fund II since its first close in May 2021:

  • Aeromutable, a San Diego-based startup that applies aerospace technology to the trucking industry, enhancing vehicle efficiency and safety;
  • De Oro Devices, a company headquartered in California, which makes mobility devices to assist people with mobility disorders to walk safely and confidently; and,
  • Flourish, a startup headquartered in Austin, Texas, which educates women how to build sustainable habits in nutrition, hydration, sleep, stress, relationships and movement.

The firm intends to invest in 15 companies from Fund II. Those startups must be women-led, meaning at least one woman with significant decision-making power must be on the founding or executive team.

The Untapped Market of Women-Led Companies that Outperform

About 80% of U.S. assets will be controlled by women by 2030, but women largely aren’t active in investing in VC funds today.

“Investing in women-led companies personally resonates with women who know their peers have potential and should be backed much more than a mere 2.3%,” said Kerry Rupp, True Wealth Ventures general partner. “There’s a feeling of, ‘If not us, then who?’ Women are twice as likely to invest in companies that will have a positive social impact, and 10 times as likely to invest in companies with diverse teams.”

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Brand and Rupp posit bringing more women to invest as LPs likely will pave the way for more women general partners to join the investment-decision-making VC table to ultimately fund more women entrepreneurs. About 2.4% of investment decision-making partners at VC funds are women. True Wealth Ventures emphasizes that women accredited investors should have the opportunity to benefit from financial gains yielded by investing in venture capital. But, most are not invited to invest. A majority of True Wealth Ventures Fund I women LPs, including the general partners themselves, previously had never had been invited to invest in a VC fund, according to a survey conducted by the firm. Forbes in 2017 published two stories that outlined True Wealth Ventures’ seminal strategy to address this systemic dynamic here and here.

Women are more likely to invest in women. VC funds with at least one woman investing partner are twice as likely to invest in a woman founder and three times as likely to invest in a woman CEO, Fast Company reported in 2020. True Wealth Ventures also believes women are more likely to back “femtech” and “silvertech” companies than their male counterparts, presumably because the latter have less first-hand experience with the problems and opportunities in those sectors. Women general partners, LPs and founders with increased wealth also are two-to-three times more likely to reinvest in their families’ and communities’ health, creating a “virtuous circle” of economic impacts, research done in 2014 by Goldman Sachs suggests.

True Wealth Ventures Fund I has invested in 12 companies, all of which remain active. The firm enjoys a zero-loss ratio to date, which speaks to the grit of these women founders. Five of those portfolio companies have enjoyed up rounds, and several are currently raising rounds. Fund I AUM totals $23.7 million to date including SPVs and co-investments. Go here to see a summary of True Wealth’s 2021 end-of-year portfolio social-impact report, its first. ImpactAssets, a nonprofit impact-investing firm, named True Wealth Ventures to its annual 2022 ImpactAssets 50 list and its annual 2021 ImpactAssets Emerging Manager 50 list of global impact investment fund managers across asset classes.

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