The Jump Fund sees the gap in female-led startups…and raises leaders
During the first years of GigTank, a handful of female business leaders saw a deficit of women founding companies in Chattanooga’s start-up scene. So, naturally they formed a startup themselves to change that.
The Jump Fund was founded in 2013 as an angel venture capital fund and started investing in early-stage startups the next year. There are 50 investors and six general partners: managing director Kristina Montague, Cory Allison, Betsy Blunt Brown, Shelley Prevost, Tiffanie Robinson, Leonora Williamson and Stefanie Crowe.
None of the founders had a good explanation for the lack of women in startups. After researching ways to reduce that gap, they decided Chattanooga had plenty of programs and mentors to help potential female founders, but dedicated venture capital was the missing piece.
“Our guy friends who were already active as angel investors told us directly that they weren’t seeing the female-led deals and they weren’t certain there would be enough of a pool or pipeline to draw from,” says Crowe. “I actually heard from a few guys that focusing on women was ‘niche,’ which sounds crazy since we are half the population. But with ratios of female participation so low at the time, to them it felt like a narrow market to pursue.”
Crowe, a 20-plus year banker and wealth advisor, was drawn to this work after her inner entrepreneur was activated when she joined a startup bank a few years ago that scaled quickly and enjoyed a successful exit. She found herself energized by being part of a communal investment in something intangible and illiquid—a vision—that ended up paying off with a lot of hard work. She sees a large potential payoff for the Jump Fund, both economically and socially.
“Gender diverse start-ups are achieving ‘outsized’ success vs. all-male teams,” she says. “There are numerous studies coming out since the Jump Fund formed that demonstrate gender diversity enhances returns. Essentially, when women are given the chance to lead, something special happens to heighten performance, which translates into financial results. And at every socio-economic threshold, when women are empowered with money, families and communities are stronger.”
The Jump Fund’s own startup story is an ongoing success. The first investment round drew more than double the targeted $1 million. Fifty female accredited investors, mostly in Chattanooga, contributed $2.5 million, which was invested in 18 portfolio companies, including one that sold successfully in the last month.
“Our experience reaffirmed our initial instincts—we’ve had incredible deal flow and are excited about the diversity of women and businesses we’ve invested in,” says Crowe. “We’ve backed women who are into hydro-power, fan-engagement technology, keeping moms in the workforce with flexible work, 3-D printed shoes and more…business concepts that reach far beyond selling traditionally feminine products to women.”
Crowe says female-led companies are still considered a higher-risk, under-valued investment. But that’s not necessarily a bad thing.
“One of our founding general partners stated astutely that she saw an ‘arbitrage’ opportunity,” Crowe says, “a chance to make money with an undervalued asset or market where traditional investors weren’t playing.”
Now, after three years, it turns out that “the guys like our thesis and want in on the action,” she adds. The group recently began raising funds for JumpFund II, which welcomes male investors who are equally inspired to invest in women.
“We are a city that has a legacy of rowdy, undeterred, visionary women who are great to support each other and don’t lead with personal benefit but think about improving the community on a larger scale,” says Crowe. “The Jump Fund narrative in my mind is a natural evolution of the amazing things women have been doing in our city for decades.”
Rich Bailey is a writer, editor, and PR consultant. He led a project to create Chattanooga’s first civic website in 1995 before even owning a modem. Now he covers Chattanooga technology for The Pulse and blogs about it at CircleChattanooga.com