Golden Seeds has a simple investment mission: Funding companies with women in leadership and management.
Founded in 2005, Golden Seeds is an angel investment group aimed at raising capital for women entrepreneurs and to encourage women and men to become active venture investors. Headquartered in New York City, the organization has chapters in Atlanta, Boston, Dallas, Houston, and Silicon Valley, along with 275 active members throughout the U.S.
“Women are starting businesses at record levels, with the ideas, skills, and talents to build great companies.”
The Dallas chapter of Golden Seeds was formally launched in 2011 with 15 members investing in the original chapter fund. The chapter now boasts 20 members and is led by Laura Baldwin and Louise Kee.
“Women are starting businesses at record levels, with the ideas, skills, and talents to build great companies. But like all early-stage entrepreneurs, they need capital to fuel their growth, and Golden Seeds is committed to helping them raise that capital,” Baldwin, managing director of Golden Seeds, told Dallas Innovates.
To date, Golden Seeds members and its venture capital funds have invested in more than 150 women-led enterprises.
“Our investment thesis rests on the extensive research that concludes that gender-diverse teams produce better return on equity,” Baldwin said. “By seeking companies where women hold leadership positions and own substantial equity, we are funding companies that are likely to have diverse perspectives that will contribute to ultimate success.”
Raising capital for women entrepreneurs
The group encourages entrepreneurs to become active investors by providing a venue where they can learn and work together, Baldwin said. The group reviews hundreds of investment opportunities yearly with the companies receiving active vetting, coaching, and advising from the Golden Seeds network.
“We offer an environment in which today’s most exciting women-led businesses receive capital and connections to grow and successfully exit,” Baldwin said. “We aim to achieve market returns for our investors while at the same time creating lasting impact.”
At the time of the group’s founding in 2005, women entrepreneurs represented less than 3 percent of all companies receiving startup capital. By 2017 that number grew, and 24 percent of all companies receiving early-stage funding were women-led.
Currently the Dallas chapter is evaluating several promising local companies for investment and has already invested in Plano’s Haxiot, an enterprise IoT platform startup, as well as Consortia Health, an Austin-based health-care company that hit Golden Seeds’ radar via a previous investment with a co-founder serving as Consortia’s board chair.
North Texas is fertile ground for startups, Baldwin said, citing the Dallas Entrepreneur Center, the growing number of accelerator programs and angel groups (including Golden Seeds, NTAN, and Cowtown Angels), and mentorship programs found at Capital Factory.
“We are starting to see more collaboration between organizations, which should lead to continued growth and hopefully cause more companies to view DFW as a great place to be,” she said. “As a result, we are seeing more women-led companies every day, which is very encouraging. These include companies in the IoT, AI, logistics, and health-care spaces.”
Putting capital to work
Two high-level factors that come into play for Baldwin include having confidence that entrepreneurs can be adaptable to marketplace changes, and having confidence that founders will welcome input. But Baldwin recognizes investing in a startup doesn’t come without risks.
“[It’s] easy to get excited about a lot of these companies,” Baldwin said, but it’s imperative to temper the excitement for an entrepreneur’s passion and evaluate the risks before making an investment decision.
“Most of them spend basically 24 hours a day working and thinking about their companies,” she said. “I have been able to learn a lot from them. I come from a corporate finance background and really didn’t know anything about entrepreneurs/startups when I started doing this. They have a completely different mindset than I do.”
For the companies that make the Golden Seeds cut, there is one overriding criterion: the company must have at least one woman in an operating role at the C-suite level. Baldwin said that role is frequently a female founder or CEO, but the group also considers companies in other C-level positions.
The group typically invests in both B2B and B2C companies in the technology, health-care, and consumer products or services industries.
Once Golden Seeds invests in a company, the group typically takes a board adviser seat, or has advisers in other capacities to help play critical roles in the company’s success. The group also works with portfolio companies to find capital throughout their lifecycle and make introductions to potential customers and strategic partnerships.
The Dallas chapter holds monthly office hours where up to four companies can meet with its members.
“We are always looking for potential companies to invest in,” Baldwin said. “We are also looking for new members (women and men) and would love to speak with them or have them attend our monthly office hours.”
For companies interested in meeting with Golden Seeds, Baldwin provided a detailed list of the group’s investment criteria:
- A capable management team with domain expertise
- At least one woman in a C-level position
- A scalable business model
- An addressable market of at least $500 million
- Limited capital expenditure requirements
- Opportunities that can be accelerated with support from investors
- A product or service in beta (versus alpha) stages of development that has been created with input from clients or potential clients
- “Proof of concept” revenue or significant pilots, except for health care bio/pharma, diagnostics, and devices companies
- A plausible exit strategy within five to eight years
- Typical valuation at first funding below $5 million
- Typically seeking first-round of funding of $250,000 to $2 million
For consumer product companies, additional criteria include:
- Annual run rate revenue over $1 million
- Gross margins over 40 percent
For health-care companies — bio/pharma, diagnostics, and devices — additional investment considerations include:
- Protectable intellectual property, with protection underway or granted
- Products or services that fill a significant and unmet need
- A concept based on verifiable science that validates approach and supports expectation of efficacy
- Articulated pathways, with projected timing, for regulatory and reimbursement approvals (if applicable)
- Company understanding of the studies required to drive adoption (blind clinical studies, for example), their design, and cost
- Clinical partnerships or connections that will allow access to patients for clinical trials and help drive adoption
- Defined approach for product manufacturing and scaling, or rationale for why this is not necessary
- Understanding of capital requirements, future funding strategies, and expected milestones needed to effect such strategies
- For device companies, meaningful and positive in vitro, and ideally in vivo data that has been validated externally or with validation underway
- For diagnostic companies, strong retrospective and ideally prospective data that has been validated externally or with validation underway
Golden Seeds is led by a management committee of three — Jo Ann Corkran, Loretta McCarthy, and Peggy Wallace — in the New York headquarters.
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