In Ep. 97 of Earned, Conor sits down with Jesse Draper, founding partner of Halogen Ventures, the early-stage venture capital firm investing in female-founded consumer technology companies. The firm’s portfolio comprises over 70 women-led businesses that have generated over $10B in market value, including theSkimm, Babylist, Live Tinted, The Flex Co., and more. Jesse has paved the way as a leading voice of women in technology, racking up a laundry list of accolades, including recognition as one of the top 10 early-stage female investors by Business Insider, and one of the 50 Most Connected Women in America by Marie Claire.
To start the show, we learn that Jesse, who comes from three previous generations of venture capitalists, is actually the first female VC in her family. Jesse reveals why she first pursued Hollywood stardom, with notable acting credits including Nickelodeon’s hit TV show “The Naked Brothers Band,” before realizing that she, too, could jump into the family business. We learn how Jesse’s experience at a Twitter conference back in 2008 inspired her to combine her passions for theater and tech and create one of the first tech talk shows, “The Valley Girl Show.” The Emmy-nominated sensation boasts over 300 interviews with the greatest minds in business, including Mark Cuban, Sheryl Sandberg, Eric Schmidt, and Elon Musk.
Jesse explains when and why she made it her mission to effect change in the male-dominated tech industry by finding—and funding—successful female-founded businesses, and recounts her experience publishing her now-viral 2020 Medium article, “Investing In Women Isn’t A Fucking Charity,” which unpacks the data around why female investors and entrepreneurs often outperform their male counterparts.
We then dive into Jesse’s investment philosophies, and she reveals the characteristics she looks for in founders that signal success. To close the show, we hear Jesse’s takes on the creator economy—how she leverages her power as a creator, how she encourages her portfolio to tap into the market, and where she thinks the space is going next—as well as the investments she’s most excited about.
We’ve included a couple of highlights from the episode below, but be sure to check out the full video above, or tune into the podcast on Spotify, Apple Podcasts, and Google Podcasts!
The following interview has been lightly edited for concision.
“Women raise half as much capital, but they make a dollar more, they double the return, and they often exit a year earlier”: Jesse Draper on Why Investing in Women Isn’t Charity, But a Massive For-Profit Opportunity
Conor Begley: So your article [“Investing in Women Isn’t A Fucking Charity”] got a ton of attention. Can you talk a little bit about the contents of the article and why it got attention? Given that there were some criticisms of the industry, were you scared to publish it? And secondly, what was the reaction to it?
Jesse Draper: So a little over two years ago, I wrote this article called “Investing in Women Isn't a Fucking Charity.” It was out of a moment of huge frustration for me. We were in COVID and I was in the middle of raising my second fund, and so many investors would say things to me like, “Oh, okay, I feel good about this. It's sort of like charity.” And I'm like, no, no, no. This is a for-profit investment. We're going to make massive returns. This is not a charity.
I realized people kept putting women in this bucket that was “charity.” It’s just how society was built. Men passed the pocketbooks down from generation to generation, and they were basically told not to talk to women about money. Women were told not to talk about money. So I'm constantly trying to get women to talk about numbers, talk about money, and I think it's incredibly important. Women were basically taught to give away money to charity before they were taught how to invest it or grow it. So that's my next conversation that I've been trying to push forward.
To answer your question, I think anytime you publish something, you're like, “let's see how it goes.” I was about 22 when I started my show, and I was torn apart by the media. So it never bothered me—there's always a hater out there. So [when I published the article], I was actually really proud of it, because I was like, I can't be the only woman feeling this way.
And I could not believe it—it got about a million impressions in a month. It blew up. It's still quoted in every major publication because we backed it up with a lot of data on the returns that women have. Women often raise half as much capital, but they make a dollar more, they double the return, and they actually often exit a year earlier. Their capital is much more efficient. And since then, so many studies have come out on how a woman in the founding team leads to better performance overall.
The sad thing is, I'm out there fundraising and I still come across people [who don’t understand]. I feel like part of my mission in life is to explain to people, no, [investing in women] is not charity. This is a for-profit opportunity, and companies with a female in the founding team perform better, as do companies with diversity overall. You can't talk about women without also talking about diversity of age, race, and gender, and I want to make sure each of my companies is thinking that way also.
I recently presented at this private wealth management conference, and I was talking about my companies. I was like, “I have this company doing a billion GMV, it's called Babylist, it’ll probably go public soon.” And then all these hands go up at the end of my presentation, and I'm thinking they're going to grill me on my numbers. But it's 30 minutes of questions like, “what if a guy works there? Can you invest? How are you seeing all the best deals if they're all run by women?” I responded, “I saw 10,000 deals last year. How many did you see?” And that's because there are so few women doing what I'm doing, that the deal flow is astronomical, and I don't have nearly enough capital to put to work, but I wish I did and I will get there.
And yes, of course men can work there. I am building billion dollar businesses, trillion dollar businesses. Eventually thousands of men will work there, and thousands of women too. I was like, are we really going to waste 30 minutes on these silly questions? And then I started referencing some of these studies and they said, “did you just make up all those statistics?” I was like, “On women? No. Are you kidding me?” And now I just keep on an ongoing list [of studies from] Morgan Stanley, Goldman Sachs, Harvard Business Review, BCG. They've all done these incredible studies on how diversity in teams creates better performance overall. So now when people ask me those questions, I'm just like, let me just send you a list of research. Data is your superpower in this category.
I do feel like a lot is weighing on my shoulders in terms of performance, and I think every woman feels that right now. We have to do well. You just don't see as many women taking companies public, but you will—because I've funded a lot that are going to go public.
“It’s the ones are who are heads down, do the work, listen to the customer, and don’t need to be the star”: Jesse Draper on the Qualities of Founders She Wants to Invest In
Conor Begley: What have you seen in terms of your investments that have succeeded versus those that have not? Do you have any theses on what to invest in outside of female-founded businesses?
Jesse Draper: When I think about founders and the ones that have performed best, I try to analyze this every day, because you want to bet on the good ones. I’ve found it's the ones who are heads down, do the work, listen to the customer, and don't need to be the star. I'm usually pushing them to get out there.
Lauren Schulte from Flex is an incredible founder. I think about Esther Crawford, who created the Squad app, which we sold to Twitter before all the madness in the beginning of COVID. When I invested originally, it was an audio technology that plugged into Alexa, and then that didn't work. She was listening to her customers, so she turned it into this thing called Molly, which for a multitude of reasons was a terrible name. It was like a social media platform. And then through that, she realized, “Oh, wait, I created this random thing, and it's the screen sharing technology so that I can watch YouTube videos with my friends and take selfies together and we can all see each other.” And that blew up during COVID. So we were like, this is a really great opportunity to sell, she had just gotten this great partnership with Snapchat, and then she got a bunch of offers on the table. So we sold it, but it's proof of a founder who was just heads down about the work. It didn’t matter if the product wasn't working. She pivoted twice, and I literally invested in a different company than the one that it sold as.
So I think you want founders like that, where it doesn't matter if they run out of money, it doesn't matter what's going on—they will make this thing work and figure out how to get the money back for investors. That's the kind of founder I'm looking for.
There's this thing I call a “fancy founder.” It's a founder who spends too much money and doesn't understand that you have to make the return for the investor. I have little scars from that type of founder who just doesn't feel that responsibility. You want to find the ones who are like, I have to solve this problem. I have to make this happen for this, this, and this reason. I want someone who’s heads down, a workhorse, scrappy, and doesn't spend too much money.
But there are all kinds of founders. Talk about diversity, you couldn't pick one type. You never know what's going to work. But I think it's just about drive, openness to pivot, and listening to your customers.
Keep up with new episodes of Earned by following the podcast on Spotify, Apple Podcasts, and Google Podcasts, or subscribing to our YouTube channel. To catch up on our previous episodes, featuring leaders from brands like Revolve, K18, Instagram, and Roblox, visit our Earned Podcast page.