Your Money & Business
Investing in Women-Led Companies
Interview with Kathryn Cartini of Chloe Capital
September 2018
Kathryn Cartini
Photo Credit: Heather Aimsworth Photography
Photo Credit: Heather Aimsworth Photography
About Chloe Capital:
Chloe Capital is focused on investing in women-led innovation companies. It makes seed-stage investments in promising companies and uses its networks and experience to help them grow. Chloe Capital is excited to advance the next generation of inspiring leaders by building a community that offers exclusive access to founder and investor events.
About Kathryn, Founding Partner:
Kathryn grew up in Upstate NY and graduated from the Newhouse program at Syracuse University. After college, she spent a decade in the newsroom, where she learned how to combine research with the art of storytelling and to share stories in an environment with minute by minute deadlines that can only be compared to startup life. She witnessed the birth of Charlotte’s startup ecosystem, embedded herself within the hustle of Boston’s high-growth activity, and returned home to help rebuild Upstate NY through entrepreneurship. In addition to Chloe Capital, Kathryn is the CMO of entrepreneur-led nonprofit Upstate Venture Connect and the owner of Peacock Media, LLC. In these roles Kathryn excels as a startup mentor, promoter and ecosystem builder – having connected hundreds of founders with investors.
Chloe Capital is focused on investing in women-led innovation companies. It makes seed-stage investments in promising companies and uses its networks and experience to help them grow. Chloe Capital is excited to advance the next generation of inspiring leaders by building a community that offers exclusive access to founder and investor events.
About Kathryn, Founding Partner:
Kathryn grew up in Upstate NY and graduated from the Newhouse program at Syracuse University. After college, she spent a decade in the newsroom, where she learned how to combine research with the art of storytelling and to share stories in an environment with minute by minute deadlines that can only be compared to startup life. She witnessed the birth of Charlotte’s startup ecosystem, embedded herself within the hustle of Boston’s high-growth activity, and returned home to help rebuild Upstate NY through entrepreneurship. In addition to Chloe Capital, Kathryn is the CMO of entrepreneur-led nonprofit Upstate Venture Connect and the owner of Peacock Media, LLC. In these roles Kathryn excels as a startup mentor, promoter and ecosystem builder – having connected hundreds of founders with investors.
Nancy Burger, senior editor, asked Kathryn about the impetus behind Chloe Capital, what attributes she and her partners look for in women entrepreneurs, and her vision for the organization's future.
What was your path that led to the creation of Chloe Capital?
This is a group effort - Chloe Capital has three partners. Our founding partners, Elisa Miller-Out and Erica O'Brian, have both been involved in the women in technology space for many years. Elisa is the owner of Singlebrook Technology. Last year, she sold a portion of the company and was looking for her next step. She approached me about launching an angel fund* or a venture capital firm, which aligns with my work at Upstate Venture Connect. I also felt the timing was right and in my heart. I was searching for a way to honor my father’s legacy. He was a financial consultant who owned his own business. When he became ill, he and I discussed the possibility of transitioning a portion of his company into a fund.
Why did you want to target women-run businesses?
We decided on a very focused lens of investing in women because it is truly time to reduce the gender gap in, not only entrepreneurship, but venture capital. There are very few women entrepreneurs who are pitching their ventures to investors. And there are even fewer women investing in startup companies! We started with customer discovery, just like any tech startup would. Through our discussions with both women and male founders and venture development leaders, we found that women entrepreneurs prefer women investors because they feel, on average, male investors don’t hear them. As an example, many of the women founders we spoke with said that male investors don't understand the products and services that they’re offering. We know that in many cases these products and services are catering to the dominate consumer market - which is women! And that makes for good business, so we’re all ears.
That was one part of the problem, but we also had to find more women investors. So, we decided to kick off our fund with a Women's Investor Accelerator. We gathered ten women investors at different stages in their investing career and paired them with a dozen world-class mentors from the venture capital and angel fund community who volunteered their time to teach women how to invest, including how to choose the right startup to invest in and how they can use their networks to help their investments succeed. To these ends, we selected five female-led technology companies to pitch alongside the investors. The investors got to meet the entrepreneurs and go through the due diligence process from start to finish. By the end of the event, Chloe Capital had made its first investment in Mi Padrino!
The bottom line is, we realized there was a missed opportunity in the market to invest in women entrepreneurs. Gender parity isn’t only the right thing to do in terms of diversity and equality, it's also smart business. Studies show that women make better leaders and that they produce higher returns. We’ll continue to invest in more women-led innovation companies so long as we meet our obligations to our investors and help catalyze these returns. That’s why we’re searching for the best of the best. The really cool thing is...we’re finding them!
It sounds like the Accelerator served to get women up the learning curve and took some of the mystery out of it. Do you think there's an intimidation factor for women?
Yes, there is an intimidation factor, but also an education factor and a time factor. Women are busy, and it all comes down to where you want to devote your time, what you want to learn, and where you want to make an impact. For women who want to explore investing in startup companies and making a direct impact in women’s entrepreneurship, Chloe Capital is an avenue for them. We're fully prepared to provide the training, resources and education they need to feel comfortable.
On the website, the leader of one of Chloe's investments said that you and your partners "understand women and the magical dance that we play to balance work and home." Could you expand on that?
The woman who said that was Kim Gamez, founder and CEO of our first investment, Mi Padrino. She is an international businesswoman and mother of five who lives in Ann Arbor, Michigan. She decided last year that she wanted to create a scalable event-planning platform for the Hispanic community, but she needed outside capital to execute her vision. During the start of her journey, Kim found that, for the most part, male investors were more focused on her four children and one noticeably on the way. Despite her years of experience, and growing numbers on the platform, she was unable to secure the support she needed. Kim felt that these investors assumed that as a working mom she would never be able to stand at the helm of a high-growth company that could produce substantial returns. Then Kim was introduced to Chloe Capital. I laugh to think how we all celebrated the birth of her fifth child while conducting Mi Padrino’s due diligence. Kim even brought Lucy with her to the Accelerator. We took a lot of pictures to make sure our little future entrepreneur won’t forget her first pitch!
Isn't it frustrating that male investors felt that way?
It is, but I have some empathy for the situation. Investing in emerging companies is risky, and you have to go with what you know. If an investor doesn't feel comfortable, then they're not going to put other people's money on the line. The relationship between a founder and an investor is like a marriage. You really need to find your soulmate for it to work, and in this case, Kim had to kiss a lot of frogs at the beginning of her tale. When Kim said that Chloe Capital understands the magical dance, she meant that we didn't care that she had four children and was expecting her fifth. We saw that she was a hustler and a hard worker, that she had a great idea that was gaining a lot of speed quickly. Again, good business. This also ties back to our conversation about investors missing out on opportunities, and our need to increase the pipeline of women investors.
What's your process for finding strong investment candidates? What attributes do you look for?
Chloe Capital has a strong investment thesis, and we stay very true to it. There are many layers to our due diligence process, but I would say there are three top attributes we look for: First, there must be at least one female leader in the executive suite - that's the diversity component that we're looking for. Second, we invest in innovation companies, for example those that are disrupting already thriving industries. The third component we look for is market opportunity. There are plenty of good ideas out there, but if you don't have a solution that's going to garner a large enough market share, you won't be able to give your investors the return they're expecting...or pay yourself and your employees for their early-stage commitments. That said, we're looking for products and services that extend nationally and internationally.
How many companies are in your pipeline for consideration?
We launched last fall, at which point we had about 100 startups in our pipeline. Right now, we have over 1000. We receive applications every day, and the quality of the companies will blow your socks off. We can’t wait to reveal our next five investments!
What do you think is the biggest impediment to women-led businesses?
A couple of years ago I would say it was a lack of resources and opportunity. But today, Chloe Capital is but one fund in a movement, so resources are available. What I think is the biggest impediment is us! Let me explain and see if it rings any bells. As women, we like to get things done, which sometimes results in us piling the responsibilities on our own shoulders. In doing this, we neglect to ask for help or build the teams needed to scale a venture-backable business. I also believe in larger business and financial decisions, that there is a roadblock for women in terms of confidence. We could create an entirely new article on this topic alone. For now, know that Chloe Capital was created to help educate women founders and connect them with resources. The more you know the more you grow.
Starting a business can be intimidating and overwhelming. How would you advise a woman with a business idea to get started?
Yes, it can be intimidating, but I don't think it needs to be. Now is the time for women. There is always a silver lining when someone has the courage to speak up, and the silver lining from the struggles that women entrepreneurs have faced is the fact that people are looking at diversity and equality through such a clear lens. The biggest companies are starting to focus on diversity in the workplace more than ever, and these efforts are trickling down to even small community programs for women and minorities. This is a fantastic time, and if you want to start a business, it's yours for the taking - you are the only person that is holding you back. If there is an event out there with other women entrepreneurs and investors, women who are like-minded about moving the needle and making an impact, then GO to that event. Pass out your business cards and meet as many of those women as possible. The community will support you if your idea is good.
I think women have a naturally collaborative nature. Would you agree?
Yes, but that brings up a very important topic for us. Diversity in entrepreneurship is not a problem that women need to solve. It’s a problem that everyone needs to get behind. At Chloe Capital, we're thrilled and proud that we have a team of male ambassadors who have opened their networks to us and have been extraordinary advisors. Men are also invited to invest in our next fund.
Where do you find your sanctuary? It could be a person, place, idea, dream, anything.
Time is our most precious commodity. In addition to my work at Chloe Capital, I'm mentoring at least 50 founders through Upstate Venture Connect, and my various venture community-building efforts. On average, I’ll clock 100 hours a week. A lot of people say, "You have to have balance," but I don't know what that means. What I do know is that I've been able to create "work life infusion." I'm attracted to the doers, the creators. I really enjoy having brainstorming sessions with people who might not be executives or know how to commercialize their idea, but who have a vision. I find my sanctuary when I surround myself with these visionaries. That's what recharges me.
*An angel fund is a group of accredited individuals who meet certain income qualifications to ensure financial viability should they lose their investment. Venture capital funds also involve individuals who are accredited, but may also include institutions, banks, or corporations.
outdoors - and connecting with one another.
What was your path that led to the creation of Chloe Capital?
This is a group effort - Chloe Capital has three partners. Our founding partners, Elisa Miller-Out and Erica O'Brian, have both been involved in the women in technology space for many years. Elisa is the owner of Singlebrook Technology. Last year, she sold a portion of the company and was looking for her next step. She approached me about launching an angel fund* or a venture capital firm, which aligns with my work at Upstate Venture Connect. I also felt the timing was right and in my heart. I was searching for a way to honor my father’s legacy. He was a financial consultant who owned his own business. When he became ill, he and I discussed the possibility of transitioning a portion of his company into a fund.
Why did you want to target women-run businesses?
We decided on a very focused lens of investing in women because it is truly time to reduce the gender gap in, not only entrepreneurship, but venture capital. There are very few women entrepreneurs who are pitching their ventures to investors. And there are even fewer women investing in startup companies! We started with customer discovery, just like any tech startup would. Through our discussions with both women and male founders and venture development leaders, we found that women entrepreneurs prefer women investors because they feel, on average, male investors don’t hear them. As an example, many of the women founders we spoke with said that male investors don't understand the products and services that they’re offering. We know that in many cases these products and services are catering to the dominate consumer market - which is women! And that makes for good business, so we’re all ears.
That was one part of the problem, but we also had to find more women investors. So, we decided to kick off our fund with a Women's Investor Accelerator. We gathered ten women investors at different stages in their investing career and paired them with a dozen world-class mentors from the venture capital and angel fund community who volunteered their time to teach women how to invest, including how to choose the right startup to invest in and how they can use their networks to help their investments succeed. To these ends, we selected five female-led technology companies to pitch alongside the investors. The investors got to meet the entrepreneurs and go through the due diligence process from start to finish. By the end of the event, Chloe Capital had made its first investment in Mi Padrino!
The bottom line is, we realized there was a missed opportunity in the market to invest in women entrepreneurs. Gender parity isn’t only the right thing to do in terms of diversity and equality, it's also smart business. Studies show that women make better leaders and that they produce higher returns. We’ll continue to invest in more women-led innovation companies so long as we meet our obligations to our investors and help catalyze these returns. That’s why we’re searching for the best of the best. The really cool thing is...we’re finding them!
It sounds like the Accelerator served to get women up the learning curve and took some of the mystery out of it. Do you think there's an intimidation factor for women?
Yes, there is an intimidation factor, but also an education factor and a time factor. Women are busy, and it all comes down to where you want to devote your time, what you want to learn, and where you want to make an impact. For women who want to explore investing in startup companies and making a direct impact in women’s entrepreneurship, Chloe Capital is an avenue for them. We're fully prepared to provide the training, resources and education they need to feel comfortable.
On the website, the leader of one of Chloe's investments said that you and your partners "understand women and the magical dance that we play to balance work and home." Could you expand on that?
The woman who said that was Kim Gamez, founder and CEO of our first investment, Mi Padrino. She is an international businesswoman and mother of five who lives in Ann Arbor, Michigan. She decided last year that she wanted to create a scalable event-planning platform for the Hispanic community, but she needed outside capital to execute her vision. During the start of her journey, Kim found that, for the most part, male investors were more focused on her four children and one noticeably on the way. Despite her years of experience, and growing numbers on the platform, she was unable to secure the support she needed. Kim felt that these investors assumed that as a working mom she would never be able to stand at the helm of a high-growth company that could produce substantial returns. Then Kim was introduced to Chloe Capital. I laugh to think how we all celebrated the birth of her fifth child while conducting Mi Padrino’s due diligence. Kim even brought Lucy with her to the Accelerator. We took a lot of pictures to make sure our little future entrepreneur won’t forget her first pitch!
Isn't it frustrating that male investors felt that way?
It is, but I have some empathy for the situation. Investing in emerging companies is risky, and you have to go with what you know. If an investor doesn't feel comfortable, then they're not going to put other people's money on the line. The relationship between a founder and an investor is like a marriage. You really need to find your soulmate for it to work, and in this case, Kim had to kiss a lot of frogs at the beginning of her tale. When Kim said that Chloe Capital understands the magical dance, she meant that we didn't care that she had four children and was expecting her fifth. We saw that she was a hustler and a hard worker, that she had a great idea that was gaining a lot of speed quickly. Again, good business. This also ties back to our conversation about investors missing out on opportunities, and our need to increase the pipeline of women investors.
What's your process for finding strong investment candidates? What attributes do you look for?
Chloe Capital has a strong investment thesis, and we stay very true to it. There are many layers to our due diligence process, but I would say there are three top attributes we look for: First, there must be at least one female leader in the executive suite - that's the diversity component that we're looking for. Second, we invest in innovation companies, for example those that are disrupting already thriving industries. The third component we look for is market opportunity. There are plenty of good ideas out there, but if you don't have a solution that's going to garner a large enough market share, you won't be able to give your investors the return they're expecting...or pay yourself and your employees for their early-stage commitments. That said, we're looking for products and services that extend nationally and internationally.
How many companies are in your pipeline for consideration?
We launched last fall, at which point we had about 100 startups in our pipeline. Right now, we have over 1000. We receive applications every day, and the quality of the companies will blow your socks off. We can’t wait to reveal our next five investments!
What do you think is the biggest impediment to women-led businesses?
A couple of years ago I would say it was a lack of resources and opportunity. But today, Chloe Capital is but one fund in a movement, so resources are available. What I think is the biggest impediment is us! Let me explain and see if it rings any bells. As women, we like to get things done, which sometimes results in us piling the responsibilities on our own shoulders. In doing this, we neglect to ask for help or build the teams needed to scale a venture-backable business. I also believe in larger business and financial decisions, that there is a roadblock for women in terms of confidence. We could create an entirely new article on this topic alone. For now, know that Chloe Capital was created to help educate women founders and connect them with resources. The more you know the more you grow.
Starting a business can be intimidating and overwhelming. How would you advise a woman with a business idea to get started?
Yes, it can be intimidating, but I don't think it needs to be. Now is the time for women. There is always a silver lining when someone has the courage to speak up, and the silver lining from the struggles that women entrepreneurs have faced is the fact that people are looking at diversity and equality through such a clear lens. The biggest companies are starting to focus on diversity in the workplace more than ever, and these efforts are trickling down to even small community programs for women and minorities. This is a fantastic time, and if you want to start a business, it's yours for the taking - you are the only person that is holding you back. If there is an event out there with other women entrepreneurs and investors, women who are like-minded about moving the needle and making an impact, then GO to that event. Pass out your business cards and meet as many of those women as possible. The community will support you if your idea is good.
I think women have a naturally collaborative nature. Would you agree?
Yes, but that brings up a very important topic for us. Diversity in entrepreneurship is not a problem that women need to solve. It’s a problem that everyone needs to get behind. At Chloe Capital, we're thrilled and proud that we have a team of male ambassadors who have opened their networks to us and have been extraordinary advisors. Men are also invited to invest in our next fund.
Where do you find your sanctuary? It could be a person, place, idea, dream, anything.
Time is our most precious commodity. In addition to my work at Chloe Capital, I'm mentoring at least 50 founders through Upstate Venture Connect, and my various venture community-building efforts. On average, I’ll clock 100 hours a week. A lot of people say, "You have to have balance," but I don't know what that means. What I do know is that I've been able to create "work life infusion." I'm attracted to the doers, the creators. I really enjoy having brainstorming sessions with people who might not be executives or know how to commercialize their idea, but who have a vision. I find my sanctuary when I surround myself with these visionaries. That's what recharges me.
*An angel fund is a group of accredited individuals who meet certain income qualifications to ensure financial viability should they lose their investment. Venture capital funds also involve individuals who are accredited, but may also include institutions, banks, or corporations.
outdoors - and connecting with one another.
