A few years ago, Marion Lewis, a serial entrepreneur with an impressive track record, was having trouble raising money for her latest startup called BoardBookIt.
A member of the Women Presidents’ Organization, she huddled one day with chapter chair Yvonne Campos to strategize. In the end, Campos told her, “I know women with money!”
From that conversation, Next Act Capital was started by members of the WPO to help Lewis.
Word got out and other women wanted in.
“One in particular was Catherine Mott, a dear friend of mine,” says Campos referring to the highly-regarded founder and CEO of BlueTree Capital Group and BlueTree Allied Angels of Blue Tree Capital. Another was Brenda Smith, vp at Bernstein in New York City.
Lewis’ plight, they were all aware, was not uncommon: women in Pittsburgh and elsewhere aren’t getting their fair share of investments in their companies.
“How do you change that?” asks Campos. “You create funds that are focused on and led by women.”
“We’ve been looking at this for awhile,” says Campos, who recently sold the firm she founded, Campos Research. “ So I started Next Act Capital just to do this for Marion and BoardBookIt. I pulled together 10 women and did two rounds, not a huge amount of money but enough for it to go forward.”
Now, three years later, Next Act is evolving into Next Act Fund LLC with Campos as president.
While other women-led funds exist, there aren’t any in this region, she notes. On the angel investor side, only 16 to 22% of venture capital investors are women, she points out.
“So the majority are men. It’s not that women-owned companies aren’t worthy of investment but fewer get the attention of venture capital companies.”
For whatever reason—she speculates that it’s an unconscious bias—the problem is real. “If we want to get this money we have to do it in a different way,” Campos suggests.
To get Next Act to the next level, she invited 30 women to a meeting where she presented the idea of building the fund. “Through research we learned that funds that women do are different than men. Women are not comfortable with this kind of investing due to lack of experience.”
While men are fine spending $300,000 to participate in a fund, women are more comfortable “with smaller chunks of money over time,” says Campos. “This fund starts giving them the experience in doing that.”
Next Act Fund requires a $10,000 investment each year for five years from credited investors. “Credited means you are in the position to take this kind of risk,” says Campos. “It’s not like you are going to get your money back right away. Only when the company is sold.”
Yet she considers it an investment that goes beyond financing others, noting that women are comfortable writing big checks to the United Way or the American Heart Association but not to funds for investments.
This, she points out, “is a way to impact other women, creating jobs, feeding families. The end result of feeling good is still there. And if you’re lucky, you improve your own financial picture.”
The Next Act Investment fund currently has 15 women committed. The goal is to get 100 members for a total of one million dollars a year by first quarter of 2017. The fund will then invest 75% in women-run companies and 25% in “non-gender specific” companies.
“The more companies you invest in, the better,” she says, adding that they don’t want to miss great opportunities.
As for finding companies to invest in? As Catherine Mott said, “don’t worry about finding companies. They will find you,” says Campos. “We know of companies.”
They are not interested in startups, but rather, “early stage companies that have a product and management team.”
Campos is hopeful that they will meet their goal of 100 by their target date. “A lot of women are very excited about this. I think there’s certainly a market out there. We did our research and there’s over 25,000 women qualified in this region. And we know that women now are much more active in managing their resources and dollars. It’s the right time.”