Sara Brand and Kerry Rupp, co-founders of True Wealth Ventures, go against several prevalent trends in venture capital. The investors, who had previously successfully raised $19.1 million in 2018 for their first fund, have now collected $35 million in new capital for their second fund.
Brand and Rupp have a lot of experience going against the grain, which isn’t surprising given that women make up only 2.4 percent of venture partners, and most first-time funds don’t get closed. Having at least one female member of the board of directors or founders who possesses “substantial decision-making authority” is required for the company to have “major decision-making power” on its founding or executive team.
Last year saw a five-year decrease in the amount of venture capital investment that went to all-female founding teams, which makes this business model so unusual. BrainCheck, a company that focuses on cognitive health, and Atlantic Sea Farms, a seaweed manufacturer, are both companies that are part of the portfolio for True Wealth’s Fund I.
Fund I was established with a deliberate strategy for gender diversity in mind, and according to Rupp, we were the most significant fund ever raised. The fact that we wrote checks to women entrepreneurs was considered a rarity then, so when we entered the market early and organically received news about it, we received a flood of inbound business opportunities. These opportunities came as a result of our early entry into the market.
According to Brand and Rupp at TechCrunch, True Wealth Ventures only makes investments in companies that are led by women and only makes investments in companies that the founders believe will positively impact health or sustainability. During a global pandemic, it has not been an easy time to invest in early-stage entrepreneurs; yet, the fact that the company has a zero loss ratio from Fund I demonstrates that it has made a profit on every investment it has made.
Brand and Rupp want to make roughly 15 investments in total for their second fund, which they added after their previous fund’s 12 investments.
True Wealth’s previous fund made average investments of $500,000, but this new fund plans to write more extensive checks this time around—up to $1 million per investment.
“Now, we want to be able to write up to a million dollars [per] first check because we do usually lead the deals, take a board seat, and take a big role. Brand said that we have a lot of conviction around our investments and a relatively concentrated portfolio,” Brand said.
Since the initial closing of Fund II in May of the previous year, investments have been made in several companies, three of which are De Oro Devices, a manufacturer of mobility devices; Aeromutable; and Flourish. They added that out of the six co-founders, one Native American co-founder, two Latinx co-founders, and two Black co-founders.
The partners of True Wealth have stated that the company intends to hire its first full-time employee outside Rupp and Brand, an associate who will start working the following month. The organization has already begun drawing on its venture fellows and interns network to assist with sourcing and due diligence tasks.
They initially intended to assist just female entrepreneurs. On the other hand, the two have uncovered a “parallel purpose” in training women limited partners, who are responsible for making investment decisions on behalf of family offices and foundations, on how to get involved in venture capital. Brand claims that female investors make up more than 80 percent of the funds’ total capital.
“We did a poll of our LPs and found out that of those women, the vast majority had never invested in a venture capital fund before, and the vast majority of those women had never been invited to invest in a venture fund before,” Brand said. “We realized, in retrospect, that seems obvious with the lack of women in VC funds making investment decisions and the lack of women entrepreneurs getting VC dollars. Basically, this is a male-dominated environment.”
Investors in the firm’s portfolio are given an overview of venture capital’s risks, costs, and structure through educational sessions held in a group environment.
“We think that diversity of the LP base feeds into our priorities and what our investors care about, and the solutions we want to see in the world and therefore what we invest in … When women come into increased wealth, they reinvest that into their family and community’s health, education and welfare at twice the rate of men,” Rupp explained.
As originally reported in TechCrunch https://techcrunch.com/2022/06/27/austin-true-wealth-ventures-raises-second-fund-female-women-startups-founders-entrepreneurs/