There’s a new fund in town, and it was built by women, for women.
That’s the gist behind XFactor Ventures, a fund backed by Boston’s Flybridge Ventures with a mission of investing only in startups that include at least one female founder in their ranks.
The fund’s general partners are (for the most part) women entrepreneurs, including founders from Wondermile, Bow and Drape and Manicube.
One of the voices shaping the conversation is XFactor partner Kate Castle, who brings a unique background to the table.
From studying anthropology at Wheaton to teaching English as a second language in Gabon, Castle’s diverse work experience has served her well in the VC world as she leads Flybridge’s marketing and communications efforts. We caught up with Castle to hear about her work at XFactor and how it's paving the way for more women in tech.
You’ve had an unusual career path. How has that shaped the way you work at XFactor?
I majored in anthropology in college. It was not a typical career path from anthropology to venture capital. My first job was in the Peace Corps, which taught me so much about flexibility and getting things done with limited resources. An anthropology background has also been great for reading people and understanding how they work. So in some ways, my unique background has been useful for working with entrepreneurs every day, helping them with their businesses and their marketing.
Did you ever think the tech scene would become what it is today?
Yeah — I think we’ve had a long history of tech and when you look back at the deeply-embedded companies here and the educational ecosystem, there’s always been tons of innovation. It’s challenging and frustrating when you see companies leave for the Valley or NYC but we’re starting to see companies come back, which is nice.
How have you seen women in Boston tech evolve over time?
I certainly think there’s more women in tech than when I first got into the venture industry. I see more women founders, but still not at the level I’d like. There’s definitely room for improvement. Hopefully with XFactor, we’ll see that small changes can have a big impact. After starting to talk about the XFactor fund in January, Flybridge went from looking at 90 percent men-led companies (and 10 percent women-led,) to a 55/45 ratio.
What do you think is the biggest hurdle for women founders breaking into tech?
Funding is a huge hurdle. When the majority of money is controlled by male investors, men tend to invest in products and industries within networks they know. How do you get connected into these firms? In Boston, there needs to be more collaboration between women founders, who are already at a disadvantage when trying to get funding. I’d also like to see more mentoring from men and women who are experienced founders. Gender diversity is actually a phenomenal thing.
Can you give a few examples of things that would scare you off from making an investment?
I think for XFactor, our two main criteria are that it has to have at least one female founder on the team and there has to be a lot at stake. The biggest thing we look for is market opportunity. There has to be an ability to see huge market opportunity for whatever the company is doing. How does this become a $100M business? We have to be able to see that.
Any advice to women founders breaking into the industry?
Be creative. Figure out how to get the introductions. Once you get the meeting, make the ask. Just from sitting in on founders’ pitches for the past 15 years, I’ve noticed that it seems harder for women at the end of a meeting to say, ‘Okay, so I’m looking for $2 million and my timeframe is six weeks.’ It seems harder for them to make that direct ask, but I’m finally starting to see women make the ask. That’s an important part of the process. The other big difference I’ve noticed is that men founders tend to talk about ‘10 years down the road’ and women founders tend to talk about what they’ll do in the next two years. A lot of people know that men founders are talking with great speculation, but it’s all about being able to paint that huge picture.
Responses have been edited for length and clarity.
