VC identifies market opportunities in the women’s health and wellness space

Whether they are VCs or founders, women identify market opportunities that men ignore. Over the past few years, the Women’s health and wellness The sector has grown significantly. Female investors and founders are proving significant return on investment (ROI).

Still, words like porn scare many male VCs and shut them down when they perceive opportunities.

“Women-centric health and wellness investments only reflect that 2% of all healthcare investment,” said Jessica Carr, general partner of Coyote Ventures, which invests in women’s health and wellness.

Market conditions echoed in 2022. In 2022, appetite for venture investments weakened from the highs of 2021. The share of deals and dollars going to female founders has also declined from previous highs.

So how can Small, emerging, female venture capital managers Raise money? By turning to an untapped source of funding: women accredited investors.

 

He started his career at Impossible Foods in car research and development when there were only 12 people in the company. Before she left, she saw it grow to several hundred people. “I saw the impact of raising multiple rounds of venture capital on the company’s trajectory and its ability to scale,” he exclaims.

Wanting to see how else she could make an impact, Carr left to attend business school. After he graduated, Carr became a consultant to early-stage companies raising venture capital. “I saw firsthand the problems faced by female founders [raising funding] compared to male founders,” she said.

“[It forced female founders] to be leaner and leaner,” Carr said. “They had better operational experience and were more likely to roll up their sleeves and do things their male counterparts didn’t because they had the luxury of money.”

To further expand her experience, Carr joined a family office focused on gender equality looking to launch a venture fund. When she started seeing people in her network start funds, she jumped in too. In 2021, he launched Coyote Ventures.

Coyote pays attention Innovative women’s health and wellness In the consumer and digital space that does not require FDA approval. Venture capital doesn’t just look at conditions that only affect women, but also disproportionately affects women, such as mental health. or conditions whose symptoms differ between the sexes, such as heart disease.

An example of a portfolio company MoutA sex agency.

Market forces made venture capital more accessible. In 2018, the Economic Growth Regulatory Relief and Consumer Protection Act was enacted, which increased the number of accredited investors with funds of $10 million or less from 99 to 249. A VC fund started by women.

Almost three quarters Accredited Women Investors Write a check for $25,000 as a limited partner (LP) in a venture fund. How women (and men) are investing in startups.* But there is a perception that investing in venture capital as an LP is only for the super rich.

“Companies like Garda are innovative, making capital formation more affordable,” Carr said. “There were also accelerators [emerging] fund managers,” he said. “VC Labs helped me find the right amount of funds. [investment] thesis, and identifying who to focus on in my network.”

In 2021, Tailwinds helped demonstrate investment opportunities in women’s health. Kindbody and Maven Clinic raised big rounds, and Maven became a unicorn. Modern fertility is derived. In 2022, Roe’s reversal revealed the interest and need for women to focus on their health.

But smaller, emerging female founders also faced headwinds. Compared to last year, venture capital has declined sharply According to the Q3 2022 PitchBook-NVCA Venture Monitor, 22% for dollars and 11% for deals in the first three quarters of the year.

The share of dollars raised by companies with at least one female founder fell from 18.6% in 2017 to 17.2% in 2022. For female founders alone, the share fell from 2.7% in 2019 to 1.9% in 2022. The share of deals for companies with at least one female founder decreased from 26.4% in 2021 to 25.5% in 2022. For female founders alone, it dropped from 6.8% to 6.7%.

Smaller, emerging, female-managed funds face additional challenges than their white male counterparts. Even as first-, second-, and third-time fund managers, they may be too early to establish a track record. Institutional investors, in particular, want fund managers to have a traditional track record in their field of focus. A solid track record as an operator or consultant does not weigh in their due diligence formulas. Many make significant investments in the tens of thousands of dollars — not hundreds of millions of dollars — and sink smaller funds.

As a first-time fund manager, most of Coyote’s LPs are accredited investors. Bank of America is the largest institutional investor. They look for partners and acquisition targets and use different criteria to evaluate investments. Payers or provider networks are examples of other types of organizations that may be a good strategic fit for Coyote.

Coyote also has investments from family offices such as The Case for Her and Triple.

During these market downturns, Karr finds it important to educate LPs that healthcare and consumer staples investments are less likely to suffer from downturns. Female founders are more resilient. Female founders had lower burnout rates, with more significant valuation growth in the early stage and less valuation decline in the late stage compared to all male-founded firms. All: Women founders in the US VC ecosystem.

Venture capital should be accessible to accredited investors, especially women. Women’s long-term investment style, which spreads risk by buying diversified funds and trades less frequently than men, leads to better returns. Depending on their risk tolerance, investment objectives and passion, investing a small portion of women’s portfolios in startups can be attractive.

Increasing the number of investors for micro funds from 249 to 499 and raising the fund size from $10 million to $50 million will make investing in venture funds more affordable. Increasing the number of accredited investors in small, emerging, diversified funds will enable them to accept checks of $25,000 or less. Raising the fund size ceiling allows the fund to stabilize before the fund starts distributing profits.

In which sectors do you see market opportunities?