Two groups are raising a $500K fund for women-led ventures - Technical.ly Philly

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Jun. 4, 2015 7:31 am

Two groups are raising a $500K fund for women-led ventures

The Alliance of Women Entrepreneurs and Ben Franklin Technology Partners are teaming up to launch AWE Ventures. Here's why they're seeking donations, instead of raising a fund in a more traditional way.
Roseann Rosenthal, Ben Franklin Technology Partners’ president, receives the Iris Newman Award at the Alliance of Women Entrepreneurs Annual Celebration on Nov. 18, 2013.

Roseann Rosenthal, Ben Franklin Technology Partners' president, receives the Iris Newman Award at the Alliance of Women Entrepreneurs Annual Celebration on Nov. 18, 2013.

(Photo by Juliana Reyes)

The Alliance of Women Entrepreneurs (AWE) has supported high-growth women entrepreneurs since its founding nearly 20 years ago, but for the first time in its history, it’s about to get a dedicated pool of capital to fund early-stage, women-led ventures.

AWE is partnering with state-backed venture firm Ben Franklin Technology Partners to launch AWE Ventures, which aims to raise $500,000. AWE and BFTP will announce the fund at the PACT Foundation Luncheon today. (The luncheon is focused on celebrating women-led ventures — a swing in the opposite direction of a recent PACT event that had a paltry number of women speakers.)

The pair is taking a unique route in raising the fund: it’s soliciting donations in a crowdfunding-esque manner. BFTP will match up to $250,000. PACT has already committed $10,000, said BFTP spokesman Jason Bannon.

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Why opt for donations?

For one, because women don’t traditionally take the investor route, said AWE executive director Vicki Burkhart, but they are more likely to make donations. (Women made up 21.8 percent of the angel investing community in 2012, according to one report. When it comes to venture capital, according to an analysis by Fortune, women make up less than 5 percent of U.S. partner-level venture capitalists.)

AWE Ventures hopes that the donation-based strategy will be a way into the investing community for women who are interested in but haven’t yet taken the plunge, Bannon said.

The team is targeting high net-worth individuals: people attending the PACT Luncheon, for example. They’re offering a “founding contributor” level for those who donate $10,000 or more by Sept. 31. Donations are tax deductible.

The fund will likely be making convertible equity investments, Bannon said, and any money that gets paid back or received through an exit will be put back into the fund. AWE Ventures will find companies through AWE’s network and BFTP will carry out the investment process. Joan Waters, CEO of commercial furniture dealership COFCO, will lead the effort on AWE’s side.

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AWE Ventures will clearly be a modest-sized fund, but Bannon said it hopes to create a pipeline for companies that can go on to be funded by BFTP or elsewhere. Plus, regardless of its size, the fund gives AWE some muscle in terms of supporting women-led ventures. Networking and mentorship, which AWE historically provides, are undeniably important, but funding was a crucial missing piece in the AWE puzzle.

BFTP’s partnership with AWE marks another way that the state-backed firm is looking to different ways to seed deals. It launched a $1 million “Temple Ventures” fund to back Temple spinout startups and has put aside another $1 million for healthcare startups as part of the new Health Care Innovation Collaborative.

For Burkhart, it feels like AWE is coming full circle.

The organization started out as the Women’s Investment Network, working to connect women entrepreneurs with investors, but it never ended up raising a fund, she said.

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