We’re happy to welcome Sharon Vosmek to the show today! Sharon is the CEO of Astia, managing director of the Astia Fund, and a managing member of Astia Angels. Astia is the pre-eminent organization working to ensure the success of high-growth startups founded and led by women. Astia Angels is a global investment group comprised of family offices and HNW individuals to invest directly into women-led, high-growth companies. She is well-regarded around the globe for her opinions, research and commentary on the importance of women leaders as integral to innovation and high-performing entrepreneurial companies.
In this episode, you’ll learn:
- What is the current VC model and how is it broken?
- How important is diversity for a company? Are there any measurable benefits?
- What is the investment thesis for Astia?
- What is screening process that Astia uses to eliminate any biases?
We would like to make a special thanks to Maya Tussing who is a Principal, Institutional Investment Advisor at Alesco Advisors LLC . Without her, we would never have met Sharon.
Help us out!
Help us reach new listeners by leaving us a rating and review! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it!
Resources
- Sharon Vosmek’s LinkedIn
- Sharon Vosmek email address
- Website of Astia
Disclaimer to the Transcripts:
The transcript was generated using an Artificial Intelligence program and then scanned over; we would like to thank you in advance for understanding that there might be some inaccuracies. While reading, one might also notice that there are times were the sentences are not grammatically correct and due to changes in advertisements, the time stamps do not always align with the show. We are keeping the text as true to the interview as possible and hope that the transcript can be used for a reference in conjunction with the Podcast audio. Thank you and enjoy.
Intro 00:00
You’re listening to The Silicon Valley Podcast.
Shawn Flynn 00:02
On today’s show we have Sharon Vosmek, who is the managing director of the Astia Fund, managing member of the Astia Angels, and the current CEO of Astia. She is well-regarded around the globe for her opinions, research, and commentary on the importance of women leaders as integral to innovation and high performing entrepreneur companies. We talk about what is the current VC model. And how is it broken? How important is diversity for a company and their measurable benefits? And we talked about the Astia screening process and how it eliminates bias in the screening process to find deals. All this and more on this week’s episode.
Intro 00:46
Welcome to the Silicon Valley Podcast with your host Shawn Flynn who interviews famous Entrepreneurs, Venture Capitalists and Leaders in Tech. Learn their secrets and see tomorrow’s world today.
Shawn Flynn 01:09
Sharon, thank you for taking the time today to be a guest on Silicon Valley.
Sharon Vosmek 01:12
Thanks for having me, Shawn. Pleased to be here.
Shawn Flynn 01:15
So, tell me about the organization of Astia. I mean, you are the current CEO. Tell me about kind of your daily roles, how involved it is with the community, and a little bit more information to give our listeners more background on this amazing organization.
Sharon Vosmek 01:30
Sure. And I’m the fourth executive. So, I do like to give it history to really honor where we come from. We were founded by Cate Munther, who was the Chief Marketing Officer at Cisco at the time that it went public. And when Cate looked around Silicon Valley back in 1999, what she observed was that 2% or less of venture capital was being invested in companies that included women anywhere on the founding team. And this for Cate became a bit of a mission and focus. And she launched a foundation called the Three Guineas Fund. The Three Guineas Fund had a program within it that was the women’s technology cluster. We spun out as our own organization in 2003, recognizing that this work really required a unique focus. Access to capital wasn’t something that is broadly understood. It’s a very Silicon Valley specific endeavor. High growth entrepreneurship requires a very specific network, a very specific focus. And Astia really was designed to address access to capital, as it relates to companies that include women leaders. We started as a physical incubator. Every year we invited 12 to 20 companies to join the accelerator, excuse me incubator, and go through our program. The program was pretty straightforward: access to experts, access to legal advice, access to space. And what’s really been curious about Astia since the beginning is that we’ve taken the time to always reflect upon our impact and how successful our programs are.
Sharon Vosmek 03:04
So, the first business case that was written about Astia was by Professor Tom Kosnik at Stanford. And we had some key learnings about our lovely little incubator, that while the companies were succeeding, more than 30% of them would secure funding within one year, which was phenomenal as compared to other companies broadly in the market, and most specifically, companies that included women, the market was not changing, and we were not influencing venture capital.
And so, the business case really highlighted two reasons why. One was that VCs when interviewed about the women’s technology cluster said really interesting things and notable things. You might appreciate them. We heard, “we love incubators,” from VCs, “We love incubators, we love getting deal flow from them.” And then when asked, “What about a company, excuse me, an incubator that focuses on women led companies?” And they said, “Oh, well, that can’t be high quality. Those would be below market companies.” And they said really curious things. We were given the direct quotes. And so, lesson number one was that no matter how great our work, and how great the company is, there was going to be this perception issue that we needed to address. Good learning.
Sharon Vosmek 04:19
Second learning was that physical space was not the differentiator for these companies. And the companies were interviewed, the majority of them actually didn’t want or value the physical space that we had as an offering. And yet, we were spending millions of dollars annually on space. So, we moved away from the incubator model, after six years of operating in that model, and became an accelerator. People often ask, “Well, what’s an accelerator? And how is that different than an incubator?” So, an accelerator is a virtual experience or a virtual incubator. And what we did as an accelerator was focusing on the thing that was the differentiator. What we had heard from our companies. While that was true that they didn’t need space, what they did need was access. And they needed access to networks and networks that provided expertise and networks that provided capital. So, we double down on building out a community. And it was during the accelerator phase that Astia grew from 20 mentors here in Silicon Valley, to over 1300 around the globe. How we did that was pretty simple. It’s how networks work. Internal thinking about what you are looking for. What are the requirements to become an Astia advisor requires 15 years or more experience in your industry? If you’re an entrepreneur, it requires that you’ve raised venture capital for two or more companies. Someone else in the ecosystem, as I’ll call it, you have to have a touchpoint directly into the innovation economy. So, we had defined what we needed. And then we started finding those people, and the relationships naturally extended.
Sharon Vosmek 06:01
The other key thing we did during our accelerator phase was another business case. And during this period, we had a great learning, which was how important words were, especially as it relates to the type of work we’re doing, which is building an ecosystem. And words help people opt in and opt out. They helped define who we were. So, we did a word exercise. It was where we rebranded as Astia because we learned that being called the Women’s Technology Cluster actually excluded men by putting the word women first. So Astia became inclusive of men. We also then learned about the word mentor, and that it has its own hierarchical connotation. Gender already has a hierarchy. We know this in finance that around the world, women and men relate to money differently and have a different hierarchical relationship in the home relative to money and in the workplace relative to money.
They’re paid differently, there’s a wage gap, there’s all sorts of gaps. So, there’s a hierarchy. Well mentor, if it had a hierarchy, seems to reinforce or potentially harm women, if they’re the mentee, and they have a male mentor. So, we did a very simple test, I like to think of Astia as my social experiment. So, we rebranded our mentors, as Astia advisors. And overnight, our funding success rate went from a 30% funding success rate to 60%. So overnight, by changing one word, we learned that our community, if they were advising our companies, actually would invest in our companies, versus mentoring our companies, and they would help them. And our companies do want help. That’s always helpful. But we are formed as an organization to ensure access to capital. So, our measure of success is do you successfully raise money through Astia? So, we kind of liked that one. And I throw it out there and leave it out there as a hook to come back to later. We should talk about some of the other words we’ve developed.
But let me finish telling you our evolution, and where we went from after acceleration. So, during our acceleration period, we had our 10-year anniversary, and the board and the executive team had a great retreat. And I think I’ve already alluded to this, but I’m going to be very clear, we always, and each year, reflect on our impact on the market, and our success with the companies we’re serving. And we take those reflections and we implement changes as a result. So, a key learning in our 10-year anniversary was, and Shawn, would you like to guess the answer to this question? Our key learning was that the investment dollars into companies led by women at your ten of our work had achieved what I told you, we started at 2%. What do you think it was by 10 years?
Shawn Flynn 08:53
I have no idea. I want to say 10%.
Sharon Vosmek 08:56
We were at 2%.
Shawn Flynn 08:58
Wait, what?
Sharon Vosmek 09:00
It hadn’t moved. So, we knew that what we were doing was working for the companies we were touching. But nothing was changing in the venture landscape as it related to the percentage of dollars going into companies that included women leaders, as well as number of deals being done with women leaders. This is very curious. I’m an economist in my background. I got very interested in where the research was around the nature of venture capital and the nature of the high growth economy and what might be the barriers to change. In our board retreat, we identified that our community, while it was investing in the companies that we touched, needed a mechanism to do it under our name and our work. And the reason for this was that we were not going to be able to change VCs, unless we were peers to those VCs. We needed a mechanism to join them as it were, rather than sit alongside them in the abstract, we needed to be in the cap table. And so launched Astia Angels in 2013, which was our first investment program. I love Astia Angels. It’s one of our favorite programs because it took some of our near and dear advisors who were very engaged in our work and helping us source and screen companies to actually commit to writing checks and doing it in a very meaningful way to ensure that we could participate in the venture community more actively and more directly.
Shawn Flynn 10:37
Can you talk more about the current VC model? And how is it broken?
Sharon Vosmek 10:41
Sure. Venture is so broken on so many levels. The venture model, while hugely successful for those few funds who have been successful, really could use some innovating itself. And once again, relying on the Ewing Marion Kauffman Foundation, you know, they took a look at the venture funds they had invested in and it was kind of stunning to look at how many of them aren’t performing. I think venture is ripe for disruption because it could use better performance, broadly, setting aside those five funds or so that are doing exceptionally well. The rest could use a bit of reforming on their methods and means. And I also think you know, entrepreneurs deserve better success, you know, entrepreneurs are fiercely trying to make the world a better place. They’re addressing some of our largest concerns, the global climate crisis, you know, health concerns, you know, feeding a hungry planet. These entrepreneurs deserve success. So, I think venture needs to be innovated on. And first and foremost, how Astia thinks about it is what’s wrong with it, that it can’t figure out how to invest in women. Harvard does some great research to show time and again, that when business cases are put forward with a female CEO, all things being equal, a male put in that same spot has a 60% likelihood of securing funding and that’s just kind of weird. That’s weird, meaning that it shouldn’t be, right? All other things being equal, same business, same strategy, same team, except for a name that gives away gender, that shouldn’t matter. And that, by the way, is the stuff we’re dealing with. Soft stuff that it’s really hard to understand, but really easy to measure.
Sharon Vosmek 12:22
Venture, I think, has chosen some elements that reinforce that very… I’m going to call it bias that leads to that result. Here are some of them. Number one, every venture firm has a deal flow mechanism. And they’ll tell you that it starts with referrals. They don’t look at things over the transom, they require an introduction. 98% of venture partners who control capital are men. If you’re going to rely on your network to introduce companies to you, you can imagine that that network, which is primarily male based will introduce other me.
So, requiring a referral right there can prevent what I’ll call inclusive deal flow or out-of-the-box deal flow or out-of-the-flow deal flow. But it’s a tried and tested element of the venture model. And like I said, VCs in Silicon Valley are full of all sorts of myths. And one of the myths is that relationships are a good indicator of success. And I think that they’re a good indicator of success once the company is going, but they’re not a good indicator of success for raising capital. I think relationships can lead to successful fundraising. But what I mean is it shouldn’t be the bar for which you decide if a company’s investable. Just because I know a VC doesn’t really make me more investable. What should make me investable is my business plan, my team that I’ve pulled together, my approach to the market, my approach to customers, my engagement of customers, my solution that I’ve provided to those customers. And all of that should matter so much more than did I have an introduction to that venture firm. So that’s number one.
Sharon Vosmek 14:04
Number two, right behind it is then when they look at the deal, who’s at the table talking about it. Unfortunately, we tend to be attracted to people who look and sound a lot like ourselves. And so, what a venture firm where there’s a select group of people who have chosen to work together because they work well together. But that often leads to a very homogeneous team, which is great if you want to feel good about working together because you all reinforce each other and validate each other. But if you’re looking at deals, you’re all going to see the same thing in that deal. You’re all going to see its same potential and its same opportunity. And you’re going to miss those opportunities that someone else, maybe a woman, or maybe a person of color, or maybe some other underrepresented category of human on this planet, who isn’t at the table. So, venture has to think about these things. I think that if venture is serious about investing in companies that do include entrepreneurs who don’t look, sound, or have backgrounds just like them, they got to think about the mechanisms they’ve chosen to use, to source, and screen deals.
Shawn Flynn 15:13
Can you talk about how important diversity is for a company and some of the measurable benefits of having a diverse founding team?
Sharon Vosmek 15:21
Absolutely. And then I’d like to talk about our Astia Expert Sift, which actually addresses the bias. But let me answer your question first, which is, you know, I’m almost afraid to tell you the data, because there’s also some good research that the more data you put forward, the more people become further entrenched in their beliefs. So hopefully, now that I’ve told everyone listening that you’re about to become further entrenched in your beliefs, you’ll be freed. Here’s the cool thing about research is there is some good research about what happens to a team when you include women. So first, let’s talk about innovation. I was at the IBM 100-year Centennial. I got to hear Professor Tom Malone from MIT speak on innovation, and what is required of teams to create innovation. And he and his team at MIT had taken a look at group intelligence as a mechanism to lead to innovation. And we’ve known individual IQ for a long time. So, we know how to measure IQ. And we know what will determine if an individual has intellect or is capable of certain things. But we hadn’t really, until Tom Professor Malone’s research, we hadn’t really looked at what teams need in order to be team intelligence. What was great about his research is there were three very clear findings for us to think about and act upon.
Sharon Vosmek 16:41
First finding is if you want to create a team that’s going to innovate, number one was look at how the team dialogues with each other. Do they argue? Or do they dialogue? Those teams that argued, had a lower group IQ, then those teams who dialogue or talked through their different solutions and those who could listen well to each other, as well as talk about whatever problem they were trying to solve. The second piece that once again determined group IQ, over and over and again, was how the group read each other’s body language, which kind of goes back to the listening thing. So, did they notice when someone wasn’t talking and pull, extract him out? Did they intuit disagreement, you know, from a facial expression, or from what wasn’t being said?
And this ability to really empathize and intuit what was being unsaid was equally important in group IQ. But then the third thing, the thing that got me crazy excited sitting in Astia was that the number of women on the team is directly related to group IQ. As a matter of fact, the greater number of women on the team, the higher the group IQ. This is really an important finding for Professor Malone’s team. What they wanted to be able to do was tell organizations and teams, what sort of construction to think about in hiring, to think about in formation of teams within innovation sectors, or groups within companies. And this part about gender was really interesting that we somehow have socialized women differently than men as it relates to group interactions. And I actually think, although I don’t think his research goes this far, but I actually think that this is less about women being different than men genetically. This is about socialization. We’ve socialized women to care about what others are saying in the room, both verbally and not. And we’ve taught each other to listen to each other differently than we’ve taught men to listen. And we’ve taught women to compete differently than we’ve taught men. And so, you add all of that together. And so, the number of women on the team is less about them being women than it is about their experience, their social experience until that point. So, there’s great hope, actually, for men that they can add to group IQ if they can learn these skills. I think they can. So that’s about team performance. And that’s about the creation of innovation at the point of innovation.
Sharon Vosmek 19:10
Then fast forward to company performance. And you’ve got great data on both public and private companies. On the private side, investment performance is greatly enhanced when there is a woman in the executive team. And we see this time and again, across portfolios, that those companies that have women leaders, those startups that have women leaders, ensure or have delivered historically outsized venture returns for their investors. We don’t exactly know why, because sadly, the data doesn’t go deep enough. Private company data is hard to get. But we can see within our own portfolio that the companies seem to be more laser focused on customers, customer traction, customer revenues, they do more with less, where the money gets spent… it looks a little bit different. And maybe because those companies struggled to raise capital. They, in earlier days engaged customers. We’re not exactly sure, our performance is top quartile. And it continued. It continues a trend that we had seen as an accelerator and as an incubator. The companies that do have women outperform. Publicly traded companies see the same thing where there were women, we see very different performance. At the private equity landscape and hedge fund landscape, we see it once again, where there are women present, time and again, we see an enhancement to performance, and specifically investor performance by those companies that have women leaders. So hopefully, I have not completely turned off everyone out there who doesn’t have a woman on the team, but instead maybe inspire them a little bit to look at how they can add women to the mix. And it’s not just any woman, it’s a woman in a position of equity and influence. She can’t just be at the table in a junior role, and then expect to see these results. It really does have to be at the table in the dialogue. Once again, reflecting back on Professor Malone’s data, for them to be an effective team that does ultimately have a high IQ that drives innovation, women have to be heard, both when they speak and when they don’t speak. And right now, the venture model needs to be thought about differently then. We can’t raise another fund, use the same prior practices, and expect to get a different result. So we must innovate on the model. It’s a very logical conclusion.
Shawn Flynn 21:33
So before going into detail on the model and your vetting process, can you talk a little bit about the investment thesis for Astia?
Sharon Vosmek 21:41
I actually love talking about our thesis because people tend to make great assumptions about it. So, our thesis is one of inclusion. It’s actually not only, but it is absolutely, that we value women as leaders. First and foremost, we absolutely value women as leaders, but equally, we value men at the team. So, we look at teams that have a woman in a position of equity and influence. We’re not looking for women only. And we’re not looking for women only in a certain role. But we do expect that she’s at the table when those strategic conversations are happening.
We equally expect that she’s in the cap table, and going to see an economic benefit from this, because our mission is best served if the women win and move them into positions of power, equity, and influence. We’re really about disrupting the whole economic system. We don’t just want her there as a token. We need her there as a participant, both in the innovation and in the outcome. So our thesis is we will invest across the sectors of innovation economy, that’s high tech, software, hardware, life sciences, med device, we will look at medical health, we will look at digital health, we will look at clean tech, quite honestly, we will look at anything that has the potential for high growth and an investor return with a woman in a position of equity and influence. And Shawn, if you see any of those, send them our way, because we’ll look globally. Astia Angels can invest across all stages. And we will look very thoughtfully at the company, regardless of where she is, if she’s CEO, CTO, CMO, CFO, founder, or she doesn’t even have a title because it’s too early to have a title. But she’s there contributing, being valued, and leading.
Shawn Flynn 23:33
So now tell me about the vetting process. I looked online and on your website. It’s something I hadn’t seen before in any other angel group or VC. Could you please really go into detail for our listeners a step by step of the process?
Sharon Vosmek 23:47
We’ve developed methodology over the last 20 years that has been documented, repeated, tested, put into rigorous, repeatable process that really can ensure consistent results. It is notable because it manages to greatly eliminate bias, and yet gather what we think is an exceptional deal flow. Every year, we’re looking very closely at 400 to 500 companies and every year, we’re seeing that 5% of those are investor ready. And when we track the performance of that 5%, they continue to outperform the market. I mentioned to you that we have always had these Stanford business cases to look at and reflect upon. And over the years, what we learned is that groupthink is a real bias, or kind of, you know, groupthink, or group sitting around the table talking about companies and evaluating them, be they a competition or at an angel meeting or at a venture table. Likelihood of groupthink is high. And bias sits firmly within those conversations that result from those moments. And so the Astia Expert Sift, what it does, is it takes our global advisor network, who all sit on our platform and bring us companies, we ask those individuals who are sliced and diced by expertise and geography and sector, we ask those individuals to give us their evaluation of a company very quickly and efficiently. We ask the same five to seven questions, always about every company, that comes Astia. And the first layer of the sift is a basic criterion sift: is it high growth? Then immediately the company’s sent out to what we call an industry review. And this is the industry experts that we have in our database with 15 years or more experience. And these individuals will take a look at a company that applies to Astia and give us feedback on where the industry is or what the industry lens is on the technology within that company. It’s not a very deep dive, they’re given an exact summary. It’s a very high-level kind of sniff as it were of the potential.
Sharon Vosmek 26:01
What’s phenomenal at the industry review stage is we gather the input from the individuals, and we share that with the companies. We are completely transparent in the market to the entrepreneur, so that they can actually act on the feedback. And the industry experts don’t know where each other’s at, so we get no groupthink. And what’s really exciting, as well at this stage, is those advisors, the Astia advisors who help us screen can also raise their hand and say, “I’d like to be helpful to this company.” Because we know that equally, women need access to capital and access to expertise. So, we provide those introductions. That’s step two. Step three is our C-suite screen. And this is where our serial entrepreneurs, two or more venture backed companies, serial entrepreneurs, help us assess the companies. And every week, we have two companies present to our C-suite. And during this presentation, the video is off. So, no one can have bias in the observation of the entrepreneur. But what’s presented is the company’s intention. It’s not quite an investor presentation, it’s more of an operations presentation. And those C-suite leaders are assessing, is this the right team? Is it the right go-to-market? Is there a product market fit? Are there strategies that really resonate with what we’ll call high growth? As what we know about high growth entrepreneurship is it is a very unique entrepreneurship. It is not the same as small business, it is not the same as entrepreneurship within a large corporation. Running a venture backed startup is a unique skill set that many entrepreneurs, especially first-time entrepreneurs, will have had no exposure to. Not even an MBA program. Your exposure is through experience. That’s why we use two or more as the measure for if you can be in our C-suite. Two or more venture backed companies in your experience at once again, we gather the feedback, we share it with the entrepreneurs. And the companies that make it through that shift are not quite ready into that 5%. But they passed another hurdle. And once again, we haven’t shared the feedback with the individuals who are doing it. So, the process is best described as we’re curating the wisdom of a crowd, but a very highly select crowd.
Sharon Vosmek 28:15
The final stage of the screen is an investor screen. And the investor screen is done by Astia Angels members and our broader venture community. At this vinyl lense, which is not weighed more or less than the prior screens, which is also important, people often put a great importance on what the investor thinks about the company. And we don’t just say it’s equal to the others. And at the investors’ screen, we’re asking about investability. Is there potential to see return on this opportunity? Once again, high growth entrepreneurship is a very unique space. And so, we need to make sure that the entrepreneur really has a perspective on how capital will be returned to investors. And what’s great about the investor screen is that’s the final stage and the companies that come out of that are our five percenters.
And for 20 years, that expert sift has run, and successfully delivered the companies at the end that will outperform the market. It’s our golden egg we like to say, and it is the differentiator for Astia Angels. The companies that make it to the end are immediately made available to Astia Angels investors to invest in. The Astia Fund will be investing at the end of that sift. And the Asda Fund will invest alongside or after the Astia Angels investors in series A and series B investments. And then those that we don’t invest in because we are limited, we’re constrained by how much capital we have, will go out and be introduced to other investors. Because at Astia we are all about the success of that company that includes a woman leader. And so, we take the time to make thoughtful introductions to the right venture firm at the right time for the right companies. It’s a very, very different model than the average venture firm. And as we were raising our fund, and as we were talking to our angels, there was a lot of questions about well, how does this work? How can it work? And when you actually kick the tires on it, what’s very curious about it, is it’s consistently performing. And it consistently provides value to the entrepreneurs in the form of feedback and introductions. It provides value to the investors because the companies that come through continue to be the best in class. And it provides value to the market, because it is an innovation on venture that is desperately needed. Because a firm, or actually an industry that can’t find its way to a portfolio that includes women and people of color is a portfolio that’s not ready for the next innovation that’s needed. And Shawn, we should talk about the types of companies that Silicon Valley and other venture communities miss out on all the time because of bias within their own processes, if you want.
Shawn Flynn 30:51
So, then my next question… Can you talk about the biases that other groups may miss out on?
Sharon Vosmek 30:59
So, I, I love talking about the unique deals that we get in on. Because, you know, it’s amazing to me that in 2019, there are deals that just because the wrong person is at the helm of the company. It’s a company that potentially doesn’t get funding. So, I’d like to talk today about one of our successes, which is Envision. Envision is a med device company that was successfully acquired by Boston Scientific last year for a deal that could be as large as $275 million. We were the third largest investors at Astia Angels at the point of exit. We were one of her greatest champions along her journey. And we were one of the few firms and quite honestly, the only firm in Silicon Valley to invest. The other investors who joined us at the series B were from Michigan and Boston. It’s not lost on me that the feedback from Silicon Valley was that it was potentially a niche product.
Sharon Vosmek 31:55
So, let me tell you what they do. Envision is a medical device for diagnosing ovarian cancer. Ovarian cancer is deadly as a cancer because of the stage at which we diagnose. We tend to diagnose at stage three and four. And the idea that our product that would help diagnose a cancer that is deadly only because of how we diagnose it would be defined as a niche product was stunning to me. On one of the slides that actually showed the device going through the fallopian tubes, we received feedback that the entrepreneur should remove that slide because it was gross, which was very curious to hear from a medical device VC professional. Astia Angels invested just over $1.2 million in series A and we were joined by a number of other angels, and one venture firm, Boston Catalyst Ventures, but we couldn’t get a dime from Silicon Valley. And we just continue to hear this feedback.
Sharon Vosmek 32:53
Fast forward to the series B, we thought it would be easier. Interestingly, the feedback was fairly similar to the series A raise. At the series B, once again, having received the feedback, we were joined by Arboretum Budget Ventures in Michigan. So that’s some of the stories that we hear. And we hear them again and again. And now that we’re in the cap table and we’re an investor alongside these investors, we hear these comments all too frequently about niche markets, niche products. Where we’ve shifted our focus, we thought we were an organization built to put ourselves out of business, solve the problem, and get out of the way. But we’ve learned is we need to be an organization and an institution to last. We want to be the Warren Buffett of the space, the best investors in companies that include women leaders, and the investors who know and understand those women leaders, and the investors that subsequently have the best returns.
Shawn Flynn 33:51
I think our audience is really going to like the fact that we used Warren Buffett as a reference there. Could you talk about the members of Astia Angels in it? Can anyone join and be an angel investor in this group? Or what’s the vetting process like for people that want to become members?
Sharon Vosmek 34:09
I’m grateful that you asked because we’re always looking for new members. And we welcome especially those who maybe don’t find a home with other investment groups. We’re a very unique investment group at Astia Angels. Astia Angels are a global membership. We have members here in Silicon Valley, LA, New York, Boston, London, Germany, Norway, Australia. We will happily consider membership anywhere. And membership has its privileges. You join a very robust group who every year, year in, year out, invests annually $4 million. It’s just a really great group. We have 60 individuals and family offices as members, and the members are accredited investors. Some of them are successful entrepreneurs, especially our Silicon Valley members, they tend to have been that phenotype. In New York, we have a number of financial services executives. So, we have the former CIO of NASDAQ that’s a member and we love having Ann and her husband as members. In London, it tends to be family offices, and those family offices are really looking for a way to have direct investment opportunities that align with their families’ objectives and other businesses. And then I’d say broadly, we’re looking for those investors who want superior returns, and enjoy feeling really good about it
Shawn Flynn 35:27
We will have all that information in the show notes. But Sharon, I still have to find out more about all the resources Astia has. You’d mentioned several times that you were champions for these companies, and that they refer to you as, I don’t like the reference, maybe but the knight in shining armor for them. Could you talk about the kind of resources that Astia can bring to the table?
Sharon Vosmek 35:58
Yeah. And I like to namedrop sometimes, too. So good question. So, within the advisor community, we have some exceptional individuals who will gladly take our call and help us as we’re ensuring the success of these companies. The unique hurdle that we’re trying to address is fairly sticky. It’s a social hurdle, which is men and women are in separate business networks. We don’t like it; we wish they weren’t. And there are all sorts of people who are going to say, “Well, I have lots of men in my network or lots of men who… Or I have women in my network.” Great, anecdotally, you are fantastic people. But globally, men and women are still in separate networks. So, our work at Astia was to create a network that included men and women. So, our work is to ensure that companies like Envision have introductions to ABC person from industry that would be most helpful to them, regardless of gender.
Shawn Flynn 36:44
Sharon, I have to ask, has Astia personally helped you in any way, such as a heart-valve?
Sharon Vosmek 36:53
It has. I’m a junkie for entrepreneurs and innovation for many reasons, not the least of which is that I’m alive today because people branch to innovate on women’s heart health. So, for those out there who are women, just know that we don’t know as much about women’s hearts as men’s. And for those of you who are men who are married to women, know that and find your way to innovators who are doing something about it. I did quite by accident. I had to have an aortic valve replacement. Actually, shortly after I joined Astia. And what I learned was that the solutions in the market were broadly designed for a woman who was either much younger than I was or much older. And what that meant was if I had chosen a mechanical valve, I wouldn’t be able to have children at the time, I was only 32. If I had chosen a pig valve, kind of similarly, it’s not recommended to have children. All of these things combined meant that I got to know, through Astia, one of our Astia advisor, Corey Gorman, had been advising an entrepreneurial team who had been looking at aortic valve, and the company’s called CryoLife. And CryoLife had developed a homograft or a human cadaver valve process of harvesting human cadaver valves and then having them put into the human. And for a woman of my age, it was the ideal solution. It wouldn’t preclude me from potentially having children. I didn’t have to take blood thinners which had not been very tested on women. And all of this happened because of Dr. Corey Gorman, who happened to overhear me talking about the fact that I needed to have my aortic valve replaced. And she put me in touch with the entrepreneurial team. So, I am greatly indebted to the community. And Shawn, it’s not lost on me that the Astia advisor community includes some of the very people who I believe have rightly saved my life. Karin Navini from Edwards Lifesciences, Jodi Akin, who supervised the team, is now a member of Astia Angels, and she’s got a portfolio company, but they’ve developed aortic valves that sit inside my heart today. So, I am very indebted to Astia and what it does. I’m a real believer that where there are innovators innovating on real problems that need to be addressed, be they health, be they global climate crisis, be they feeding a hungry planet, I’m very interested in seeing those companies. Because investing is personal. It’s very personal. It is relationships, and it’s passion. And it’s our change the world moment. Astia is kind of a cool place to be because of that, for me.
Shawn Flynn 39:28
Sharon, how many investments has Astia Angels made over the year?
Sharon Vosmek 39:33
We’ve made 102 investments into 52 companies as of Friday, which is just over $23 million of our own capital invested. Equally exciting for us is what we’ve been able to see being pulled into those companies. It’s over $390 million as of Friday, that has been brought alongside our $23 million. So, we’re very pleased with our investment activity. Equally exciting is the outcome of that, and we’ve had some great exits to date for our angels. We’ve had five exits that are what I’d call very exciting and interesting from a venture perspective. And then of doubt, only one failure. The five exits, on our website, you can see them. You heard me mention Envision, Boku in the FinTech space went public on the London Aim. We had Seal Medical, a medical device company acquired by Veer, and Cloudamize, which was a security cloud computing company that was merged with the Blackstone-backed company. Very exciting exits. And then we also had one asset sale within the portfolio as well. But notably, and this matters, Shawn, is that we’ve only had one failure. And one failure out of 52 companies in six years is what we’re talking about when we’re talking about companies that include women leaders. What I mean by that is there’s some good data, although fairly insufficient, in that I want to see more of it. I’m an economist. I’m more longitudinal, but venture backed companies that have a woman in a position of leadership are much less likely to fail in the absolute failure form. There tends to be some sort of investor outcome. That’s notable and as we look at our own portfolio, only having one failure in six years is pretty impressive… It’s exactly year seven now. It’s a pretty impressive and notable element. It’s what investors should be thinking about. You don’t actually have to find unicorns, if you’re in search of real businesses doing real business with real customers, you can see across the portfolio a more conservative set of returns with fewer failures. Just another thing to note about companies that include women leaders.
Shawn Flynn 41:52
Great, and then Sharon, if anyone wants to find out more information about Astia and yourself, how is best for them to go about it?
Sharon Vosmek 41:59
I’m a real believer that we’re in a service business. So, I’m going to put all of our contact information out there. We welcome over the transom, be that for an entrepreneur who wants to raise capital from us, or it, be it an advisor who would like to join the community, we welcome you, and we’d want to hear from you. So, the website is straightforward. It’s astia.org. If you’re trying to reach me, I’m sharon@astia.org. Equally, if you want to raise capital from us, go to our site, figure out if you fit our criteria. Number one, do you have a woman in a position of equity and influence? Number two, are you pursuing a high growth opportunity? And number three, do you believe you have a compelling investor case? We’d love to hear from you. Simply apply on our website, https://astia.org/apply/, there’s a link right there, submit your materials, we look at every single company that comes in. You don’t need an introduction. If someone did introduce you, put their name in the field that says, “introduced by,” and we will reach out to that person. And then very, very important. If we’ve taken a look, and for whatever reason have said, “Hey, we’re not the right investors right now.” Don’t go away, read the feedback we provide to you. Think about it, reflect on it, act on it, come back to us, tell us what you’ve done with it. We always take a look again.
Shawn Flynn 43:23
And once again, we’re going to have all that information in the show notes. I’d like to thank Maya Tussing who is the one that made the introduction for me to Astia, and once again led to all this and Cate Muther for founding this amazing organization. And Sharon, thank you for taking the time today to be on Silicon Valley.
Sharon Vosmek 43:42
My honor, Shawn.
Outro 43:43
Thank you for listening to The Silicon Valley Podcast. To access our resources, visit us at TheSiliconValleyPodcast.com and follow our host on Twitter, Facebook, and LinkedIn @ShawnFlynnSV. This show is for entertainment purposes only and is licensed by The Investors Podcast Network. Before making any decisions, consult a professional.
