When faced with confusing, chaotic and increasingly polarised times, it is even more important to find strength through action. Conscious investment of capital is the most powerful tool to reach the future you desire – while simultaneously generating both outsized returns and deep impact.
Startups are our hope. The entrepreneurial journey almost always begins with a problem the entrepreneur personally experienced and now desperately wants to build a solution to solve. For many, the pain of inequalities and injustices is the fuel that powers them to build – for themselves, their families, their communities, and for the world they wish to create. Resources – most importantly, capital – give voice to those with much to say but without existing platforms to be heard.
For over three decades, women-led businesses have barely received more than 2% of venture capital financing. In 2022, women-founded teams are on track to receive a historically low proportion of venture financing: just 1.8%. At the same time, women are disproportionately represented in the creative industries: in the US, up to 35% of women-owned businesses are in the creative economy.
Where money flows, those voices grow. Recent events, if anything, are a sign that we each need to take more courageous and grand actions if we truly wish to have an equitable and inclusive future. History does not always move forward in a linear fashion. When aspects of society get worse before they get better, we must harness the pain to fuel us. We must deploy capital to traditionally undercapitalised founders. We must create space for all people to be included and valued. Investing consciously is the only logical path forward.
Impact investing isn’t new or unproven. In fact, investing with impact can be the competitive advantage that generates outsized returns. Since 2015, SoGal Ventures has been investing towards a better, more inclusive future by allocating capital to diverse founding teams on a mission to revolutionise how the next generations live, work and stay healthy.
Our first SoGal Ventures Fund invested in 42 companies. Over half of these companies are in the creative economy – and 100% of the portfolio is led by diverse founding teams. From sustainable clothing, science- based baby toys for brain development, custom breast prosthetics for breast cancer survivors, a culturally relevant and sustainable winemaker and affordable healthcare services to the first Latina-owned haircare company to launch at Sephora, our portfolio startups rapidly scaled while at the same time reinventing the industries they operate in. SoGal’s portfolio demonstrates an idea that resonates through the 100 essays in the Creativity, Culture & Capital collection: creative people solve problems.
Collectively, SoGal’s portfolio companies, all located outside of Silicon Valley, grew to be valued at over US$7.8 billion in five years, generated over US$1.2 billion of revenue in 2021 and created over 2,176 new jobs for our economy. With 67% net internal rate of return (IRR) and 4.4x since inception in 2017, SoGal’s first US$15 million fund demonstrated that even modest pools of capital, when deployed consciously, can generate outsized top-decile returns and deep impact.
If not you, who? Our individual and collective power is held in our wallets and decisions. The way we spend our money, the people we support and the investments we select influence how our collective future evolves. Ask yourself: is your capital aligned to your values? Are you investing in the future you wish to see? The time is now to be conscious and courageous.