In 2014, Maven, a women’s and family health startup, was far from a consensus bet.
The hot startups that year included Airbnb, Uber, and Zenefits, and the cloud revolution was self-evident. Having just raised its first fund, Female Founders Fund (FFF) was a seed investor, along with Great Oaks and Box Group, in Maven.
"At that point in time, it was pretty contrarian in the sense that there weren't any other examples to point to within women's health,” said FFF founding partner Anu Duggal. ”So, you couldn't necessarily say so-and-so has built a company focused on the women's health experience."
This month, Maven announced it had raised $125 million funding at a $1.7 billion valuation. It was a crucial moment for FFF, which did a partial secondary sale in conjunction with the new round. FFF has now returned its $5.85 million Fund One, Fortune can exclusively report. Now that the fund has been returned, all the remaining investments and exits will be pure profit for the LPs. For a young VC firm, this is a key moment: Many new firms never return their first fund at all.
Others in venture see this as a strong signal for investing in women, especially those who've been following (or investing in) FFF. The firm’s thesis—that backing female founders can provide outsized returns—is proving out. Paige Hendrix Buckner, CEO of All Raise, said via email that this helps “to shift the narrative about what it means to be a successful founder and investor.” Erin Harkless Moore, managing director of investments at Pivotal Ventures, an LP in three FFF funds, agrees.
“FFF is one of the few diverse managers to fully return a fund, generating strong returns from often overlooked and underestimated founders,” Moore told Fortune via email. “FFF has shown that investing in women isn’t niche—it’s mainstream.”
But it’s also a story about how long and far a founder-investor relationship can really go. Maven CEO and founder Kate Ryder described Female Founders Fund as a “tremendous partner to Maven.” Ryder said that FFF and Duggal introduced Maven to its Series A investor, and has remained a key advisor through the company’s raises. (This seems likely to continue, as FFF retains part of its position in the company.)
“Their greatest contribution isn't what garners headlines though—it's their behind-the-scenes commitment to being a trusted resource and advisor to every founder in their portfolio,” Ryder told Fortune via email.
Other FFF exits to date—including plus-size fashion company Eloquii and shaving brand Billie—follow a similar mold. Walmart acquired Eloquii in a nine-figure deal in 2018, while Edgewell bought Billie for $310 million. The Billie acquisition returned 60% of FFF’s second $27 million fund.
"Even looking at our exits, these weren’t companies that necessarily had a million term sheets,” said Duggal. “These weren’t necessarily companies that were super competitive at seed, but ultimately ended up getting capital from some of the best VCs. So, from an opportunity perspective, that’s what we find interesting.”
The VC landscape is frequently tenuous and currently bifurcating, but returns will always do the talking. One LP—who’s invested in about 50 funds over more than 10 years—told Fortune that FFF has significantly outperformed the majority of their portfolio in terms of TVPI (total value to paid-in capital) and DPI (distributed to paid-in capital), two of the most important metrics in venture. DPI in particular is the perennial holy grail for LPs—actual cash returned.
"I'm a founder at heart and I started this as a female founder,” said Duggal, who founded Accel-backed ecommerce platform Exclusively.in and sold the company in 2011. “Our team is working for them, and we have something to prove—subconsciously maybe—that other funds don’t. We’ve put this thesis out there, we’re betting it’s going to be successful, and there aren’t that many data points to show it will be successful.”
But there are starting to be.
See you tomorrow,
Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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