A focus on female founders
Fund looks to take advantage of an untapped market
A young venture capital firm based in Greenwich believes it has a big competitive advantage.
Founded in 2016 and launched last year, 1843 Capital — led by Tracy Chadwell and Alison Andrews Reyes — specializes in technology startups, but differentiates itself primarily by investing in companies with “diverse leadership teams that include at least one woman,” Chadwell said.
A growing pile of recent studies indicate both women’s significance in helping startups succeed and the broad gap between the venture capital dollars given to men versus women. Yet 1843 Capital is one of the few firms taking advantage of that disparity, according to Matt McCooe, CEO of Connecticut Innovations, the state-backed venture fund.
“There’s fairly compelling evidence that women make great CEOs and more diverse teams are more likely to have better outcomes,” McCooe said. “I’ve only heard of maybe three funds that are femalefocused, and at the end of the day, those funds are emerging because they get better returns than they would otherwise. They’re capitalizing on a market opportunity. Tracy is set up to be successful.”
Double bottom line
Though 1843 is in its infancy, it is already gaining recognition. Founding partner Chadwell accepted the Women’s Business Advocate award last week at Moffly
“We’re going after female-founded tech companies because there’s a market inefficiency. We have a preference for at least one female founder, because that’s a success indicator. ... We feel like we have a unique capability with our experience and networks.”
Alison Andrews Reyes , 1843’s general partner
Media’s annual Women in Business conference and frequently speaks at events about her work with 1843 and judging startup competitions.
It was six years ago that Chadwell began taking advantage of the untapped opportunity to target womenled startups. She launched a precursor to 1843 called Coyote Capital in 2015. Over the next two years, she brought on business partners and changed the name to 1843, which was inspired by Ada Lovelace, a 19th-century mathematician who has been called the first computer programmer. In 1843, Lovelace published a transcript that some have dubbed the first computer program.
The numerical name also pushes Chadwell’s firm to the top of alphabetized lists, she said.
Chadwell likes to describe her business strategy as achieving a “double bottom line,” because of the profitable deals she makes while fostering “meaningful change.”
“There was a confluence of data validating my decision,” she said in an interview.
At speaking events, Chadwell opens her presentations with studies, including those published by PitchBook and First Round Capital, that found women-led companies received between 2 and 3 percent of venture capital dollars in 2017, while startups with
at least one female founder perform 63 percent better than those with only men.
“We’re going after female-founded tech companies because there’s a market inefficiency,” said Andrews Reyes, 1843’s general partner. “We have a preference for at least one female founder, because that’s a success indicator. Women need to be part of that founding team. We’re OK if people want to look at the data and still choose to look in the opposite direction. In the meantime, we’ll zig while they zag. We feel like we have a unique capability with our experience and networks.”
‘We need more Tracys’
Chadwell provides the venture capital experience, while Andrews Reyes contributes a career spent in engineering as well as building businesses. In 2013, she sold a cybersecurity company she had grown for seven years called Vigilant to Deloitte before founding Dezignable.com, which she has handed over to her partner while remaining on its leadership board.
Together, the pair considers multiple business pitches every day, mostly in the realms of cybersecurity and what they call “silvertech,” or technology for people 50 or older. Andrews Reyes’ deep background in cybersecurity and e-commerce give her an edge in evaluating the potential of startups, she said. “Cybercrime is in the news day in and day out, but to invest in the space, you have to understand the real value
of tech companies and what they’re putting forth,” she said. “There’s so many companies out there, so there’s a lot of overlap in what they’re doing.”
Even when they choose against investing in companies, which is most of the time, Chadwell said she tries to help founders by giving advice or pointing them toward another venture capital firm.
Chadwell’s enthusiasm and consistent helpfulness played a role in convincing Wendi Burkhardt, the CEO of one of 1843’s investments, that she wanted to work with Chadwell, Burkhardt said.
“Even two years ago, there wasn’t a lot of conversation about technology for the aging. I teamed up with Tracy because I was grateful that she understood the landscape and realized what a huge market this is.”
In 2015, Burkhardt co-founded Silvernest, a roommate-matching platform for older people. The Denverbased startup closed a seed fundraising round in 2017 that totaled more than $1 million. Among its investors was 1843 Capital.
“Fundraising is a sales process; you’re selling,” Burkhardt said. “What we need is more Tracys. We need more women in the ecosystem, because you buy from people who look like you. To date, she’s been one of our most meaningful investors.”