922 Julie Castro Abrams:

Wings of Inspired Business Podcast EP 922 – Julie Castro Abrams with host Melinda Wittstock

Melinda Wittstock:

Coming up on Wings of Inspired Business:

Julie Castro Abrams:

Our fund only funds companies founded by women with no male co-founders. And we are on fund three. We have almost 600 total investors in our three funds and we only fund companies with female founders. The data says they’re going to perform better. And, and it, and to me, it’s a really important tip of the sword activity. What I started to realize, we needed to take what we’d learned and help other female venture run venture funds learn and be able to participate in our network. And so, I started a campaign called the New Table Campaign. My goal is to get a billion dollars and thousand from ten thousand women invested in other women-run venture firms.

Melinda Wittstock:

I’ve always believed women entrepreneurs would finally start to land the capital investment they need to grow scalable impactful businesses once wealthy women started to look beyond the stock market and charitable giving to becoming venture investors.  So how exciting to talk to Julie Castro Abrams, who parlayed her growing network How Women Lead into a venture fund for female founders and female investors called How Women Invest. Today we get into the weeds of venture capital, how to raise money, and why it’s time women step up to invest in women-founded startups.

Melinda Wittstock:

Hi, I’m Melinda Wittstock and welcome to Wings of Inspired Business, where we share the inspiring entrepreneurial journeys, epiphanies, and practical advice from successful female founders so you have everything you need at your fingertips to build the business and life of your dreams. I’m all about paying it forward as a five-time serial entrepreneur, so I started this podcast to catalyze an ecosystem where women entrepreneurs mentor, promote, buy from, and invest in each other. Because together we’re stronger, and we all soar higher when we fly together and lift as we climb.

Melinda Wittstock:

Today we meet a trailblazer in the venture capital world, renowned for her ability to swiftly raise funds even in challenging economic climates—and persuade thousands of women to invest in women-led startups. As many funds struggled to raise money in the past couple of years, Julie Castro Abrams successfully galvanized women investors, bridging the education gap that often leaves women in the dark about venture capital opportunities. Today Julie shares how she built a trusted platform, encouraging women to invest in ventures often overlooked by traditional financial advisors, empowering a generation of women to actively participate in venture funding, reshaping the landscape for female founders and investors alike.

Melinda Wittstock:

Julie will be here in a moment, and first:

[PROMO CREDIT]

Helping women build wealth and make their purpose driven impact on the world through entrepreneurship has always been a mission close to my heart. That’s why eight years ago, I started this podcast to help women succeed as entrepreneurs. Over the years, I’ve driven more than $10 million in sales to the women I’ve featured on this show, and this year I’m taking my investment in female founders to a whole new level as a venture partner of the new firm Zero Limits Capital, where we’re dedicated to investing in highly scalable seed stage startups founded by women and diverse teams – a mission more important than ever as the Trump administration cracks down on anything and everything DEI. We’re looking for innovators with exciting new applications of AI, Blockchain and other emerging technologies that make a social and sustainable impact to change the world. Is this you? If it is, take a moment and tell us about your opportunity at bit.ly/ZLCintake – that’s bit.dot.ly/ZLCintake – capital ZLC lowercase intake. And coming soon, because I know from 20-plus years of experience raising venture capital, I’m going to be opening up my schedule to help female founders nail their investment strategies and pitch decks at the earliest stages of their companies. So, stay tuned!

Melinda Wittstock:

If you’re a regular Wings listener, you know by now that discouraging statistic that less then 2% of women-founded companies that qualify for venture-funding—with bold, differentiated and scalable innovations addressing massive markets—actually get it. It’s a percentage that hasn’t moved in 30 years, even though reams of research shows that women-led companies outperform their male counterparts, returning on average 60 cents more on every dollar invested than men.

Melinda Wittstock:

There are lots of reasons women struggle to find venture capital—unlike men, we tend to be evaluated on past performance rather than future potential; we tend to get asked how we’ll minimize risk rather than maximize value, and all too often men simply don’t understand the markets we’re addressing, or how our more inclusive leadership styles tend to get better results. There is a lot of conscious and unconscious bias out there, and male VCs are leaving money on the table.

Melinda Wittstock:

That’s an opportunity for wealthy women to step into the breach by moving beyond traditional investments into venture capital, where the returns are often 10X.  These days there are more women-led VC funds out there, but they still tend to raise less money than men, and often struggle to persuade women to invest in their funds.

Melinda Wittstock:

Julie Castro Abrams is making waves by breaking down the barriers for women in the investment world with her VC fund called How Women Invest. Today Julie shares how she leveraged her existing community of women executives and entrepreneurs, How Women Lead, into a community-focused fund, raising her first $10 million in mere months, and empowering women to take their seats at venture capital’s traditionally male-dominated table. Julie started by rallying an initial 221 investors, the majority of whom were women new to venture capital, how her fund has grown, plus her goal to channel a billion dollars from women into other female-led funds. We talk about the investment learning curve, and why investing in female-led companies isn’t just about helping out your sisters—it is literally about influencing the direction of the entire economy and the way we do business, as venture is all about picking the future winners in our society.

Melinda Wittstock:

Let’s put on our wings with the inspiring Julie Castro Abrams and be sure to download the podcast app Podopolo so we can keep the conversation going after the episode.

[INTERVIEW]

Melinda Wittstock:

Julie, welcome to Wings.

Julie Castro Abrams:

Thanks for having me, Melinda.

Melinda Wittstock:

You know, it’s been my mission for so long to try and get women to invest in other women, and here you are doing that. Congratulations on, you know, setting up How Women Invest. Tell me about the fund, where it’s at, and the kind of companies that you’re looking at right now.

Julie Castro Abrams:

Yeah, well, I would say I’m the orchestra conductor, but it is a big effort by a lot of women. In 2020, I reached out to my network of women and I, you know, I’d run a type of a bank before and spent most of my career helping low-income women start their own businesses in doing microloans and other products for them in the United States. But I really realized there was a huge cement wall if you needed real funding. And so, I got together with my friends, frankly, during 2020, once people found the toilet paper and paper towels, I reached out to people, I said, I’m building this fund, and I raised $10 million in a couple months, and we started investing. But there were 221 of us. And I would say that the vast majority of those women have been extraordinary partners in helping support those entrepreneurs in myriad of ways, whether it’s introducing them to an enterprise, opportunity to get a new client, talent, resources, promoting them. So, it is an amazing sense of togetherness and really moving the needle. So, for our first fund, 221 investors, I think 217 of them are women, and, and most of them had invested, were investing in venture for the first time.

Julie Castro Abrams:

It was actually an interesting moment, Melinda, to actually realize what it is that made all these women say yes so quickly and what about their investing journey was unique that we could learn from and maybe turn that into a bigger move, right? We actually did a research to look at what is the right dollar amount for a corporate woman who’s made her own money, which means she’s going to have different relationship to that money, right, than someone who maybe inherited it or, or had a spouse or other resources that came to them. So, if you made your own money, what we found is $25,000 is the right dollar amount. So, first and foremost, it needs to be a reasonable amount of money where people don’t have to get too caught up in their knickers worrying about, you know, that it’s too much for them to invest, for example.

Julie Castro Abrams:

And then the other thing is, women hadn’t been invited to invest in venture capital before. It has felt like very much a boys club. And so people said they invested with me for the first time. I asked everyone a year later, have you invested in any other funds? And 30% said they did. So, they got the bug. They got excited about it. They felt like, hey, I know enough, and I deserve a seat at this table, and I can play a more active role in this space.

Melinda Wittstock:

So, congratulations to you, first of all, for raising the fund, you know, so quickly, because that’s not easy. I mean, so many funds right now are struggling to raise money. I mean, I guess in 2020, 2021, it was easier to raise money than it is now or has been over the past, you know, 12 to 18 months. A pretty challenging circumstance. But what was it, do you think, that sparked to get women to trust you and trust venture? Because there is an education gap on where they put their money. Their financial advisors often don’t mention venture.

Julie Castro Abrams:

No, no.

Melinda Wittstock:

What was the secret? How did you do it? I mean, seriously, what did you say to them? What was your pitch?

Julie Castro Abrams:

Well, first and foremost, with all these women, for the most part, I had a trust relationship already. So, this was out of a network I built, starting with friends who invited five friends and then invited five friends called How Women Lead. And we do things like help women position themselves and get on corporate boards and a whole host of other things that we do for them. So, people will come to how women Lead for their. What I would call self-interest, really. And they’re sort of the right target market by definition, if that’s what they’re coming for. They stay because of the culture we’ve created of women really thinking of the higher calling, if you will, of helping other women and being part of lifting up a market together.

Julie Castro Abrams:

So, I think, you know, right away these women already knew I was trustworthy, had built something that had added value to them already. So, inviting them to be part of a venture fund that’s very transparent and authentic and how we communicate about it. I think for a lot of people, this was. It was a reasonably easy step for them. And let’s be honest, Melinda, these were. The majority of my first fund investors, were Silicon Valley women. So, they may not have been invited, but Venture was not. They weren’t buying into the funny, the dirty word about venture that a lot of the country hears. I think they trusted the concept more than somebody maybe outside the Silicon Valley.

Melinda Wittstock:

Yeah, they would have understood it even if it wasn’t working for them.

Julie Castro Abrams:

Exactly.

Julie Castro Abrams:

Well, and not only that, but I think they understood it was a power play that it’s an essential part of navigating your board career, really understanding the capital raising landscape to be able to be of value. It shows that you get it, that you’re a player, that you’re in the know. So, I think it does actually for a lot of people bring a different thing to their portfolio that really elevates them and it’s fun. Once you get started doing it, you’re like, how cool to see this innovation that’s starting in the marketplace way before.

Melinda Wittstock:

Oh my goodness, yes.

Julie Castro Abrams:

What a blast.

Melinda Wittstock:

Exactly. I’ve always believed that the thing that was going to change this stubborn 2% number, you know, that hasn’t moved in 20, 30 years of the proportion that female founders of venture capital, that female founders get like, what was going to move the needle.

Julie Castro Abrams:

Well, it’s an interesting thing to look at this as if you want to problem solve for it. And that’s what I’m doing. So, our fund only funds companies founded by women with no male co-founders. And we are on fund three. We have almost 600 total investors in our three funds and we only fund companies with female founders. The data says they’re going to perform better. And, and it, and to me, it’s a really important tip of the sword activity. And you know, women are told you have to have a male co-founder, or you can’t get any funding. How awful is that?

Melinda Wittstock:

That’s been in all five companies of mine.

Julie Castro Abrams:

Yeah, yeah, well, and that’s, that’s bad for you. It’s not great for him to be honest because it’s always going to be a weird situation and ultimately, yeah, ultimately not good for the investors because that’s not what the business organically needed. Now, sometimes male, female teams are the right thing, but not if you’re forced to do it. Here’s an interesting thing. I learned some stuff myself. I started my second fund then and I was, and I did this research, and I was like, wait, I have 25,000 women in my. I talk to all these female VCs like you said, who are struggling to raise money, and they’ll tell me, ‘I don’t know how to get female investors’.

Julie Castro Abrams:

And I’m like, what are you talking about, I have so many. So, what I started to realize, like we needed to take what we’d learned and help other female venture run venture funds learn and be able to participate in our network. And so, I started a campaign called the New Table Campaign. My goal is to get a billion dollars and thousand from ten thousand women invested in other women run venture firms.

Melinda Wittstock:

Oh, that’s exciting.

Julie Castro Abrams:

Well, Melinda, we’ve gotten $200 million committed to other women run venture firms.

Julie Castro Abrams:

I have people who I know who I’ve introduced to this concept to a, a platform we have. So, you can do values-based investing. Women are values-based investors. And literally one person, she writes me the most beautiful message. She’s like, I want you to know that I invested in these five different companies, $100,000 in each of these venture funds. And you know, that’s, that’s what we all should be doing. We should be playing that big game. But we should also be telling our friends to tell their friends.

Melinda Wittstock:

Exactly. Well, I mean, what you’ve really talked about is the power of trusted community, which Julie, you know, you’ve really built and, and you had the foundation and, and that, you know, that trusted foundation upon which to build. I love that you’re helping other female venture funds because one of the things I’ve noticed is there’s obviously many more. When I was starting out as an entrepreneur, there were no female venture funds.

Julie Castro Abrams:

Yes.

Julie Castro Abrams:

There were only 12 in 2010. Melinda. It’s real. And most of them were angel groupie kind of things. They weren’t really traditional venture funds. Yeah.

Melinda Wittstock:

It was like, I remember it was like Golden Seeds. And, and so if you had highly scalable opportunity, if you were going for a moonshot, like my startups, to be like a big ecosystem player, they didn’t understand it. They were evaluating it like an investment banker in terms of revenue and earnings when you were early stage.

Julie Castro Abrams:

Yeah.

Melinda Wittstock:

And it was like a terrible valuation.

Julie Castro Abrams:

Right. Well, well, that this is the good news. By 2030, there were 300 women run funds. And so, it’s a brand-new market. If you think about it. There really just were not actors in the space. Let me tell you, it’s a very challenging and hostile environment, to be honest.

Julie Castro Abrams:

The structures have really been created where most assets are going to these behemoth huge venture firms that frankly are acting more like private equity firms in many Ways a very down market and they’re not actually returning a lot for their investors. It’s an, it’s an, it’s a fascinating thing to watch.

Melinda Wittstock:

Yeah, it’s, well, it’s, it’s, it’s curious like just for a moment to park it here in our current circumstance where the, the markets are falling apart at the moment. People are looking for where is a better place to put their money. But also, in times of uncertainty, yes, people freeze. Like your third fund is already, you know, fully subscribed and funded, right?

Julie Castro Abrams:

But there’s no, no, no, we are still raising. So, we have 120 investors already. We’ll probably have 300 when it’s all said and done. It’s not actually been hard for me to engage now maybe this week is different because the markets, you know, we’re in a very big crash. I’ll see next week when I have my, my intro call that I do twice a month. Know, you know, women, you’re still get, most people are still getting a paycheck and yes, there’s concern, but you know, people also want to be part of something bigger than themselves. And you know, it’s, you know, taking action feels good. It’s relieving of some of your anxiety because you did something about it.

Julie Castro Abrams:

So, we actually find in a time like this that certain kinds of, even public market funds that are ESG focused, etc., people really are like, you know, I need to double down on stuff I believe in right now.

Melinda Wittstock:

Well, that’s true. I, I wanted to get into that with you because just this whole pressure on like if you use the word diversity or inclusion or equity or anything like that, there’s this chill. I, I’ve talked to so many women who say, well, you know, we’re trying to find a different word to…

Julie Castro Abrams:

Well, this is the thing. It’s, it, it’s all bluster. It’s all the broken structures of media and limited in education that’s not allowing us to know how to filter information. The data is irrefutable. Diverse teams produce better results, period. It disrupts groupthink. Higher, higher revenues, better return on investment in every way. And so, this is bad for American jobs, bad for the economy.

Julie Castro Abrams:

You’re watching it happen live. You know, what did, what did we think was going to happen? We start a tariff war and, and you know, cut contracts. I just saw what one university, I think Columbia, or somebody just said they’ve got $800 million in grant funds that are not coming from the federal government that they’re, I mean that’s massive. Think about all the unemployment at universities, the unemployment of government employees. We just created a recession just by unemployment that we triggered from these actions. Not to mention the impact of tariffs.

Melinda Wittstock:

Yes. And a recession in innovation and ideas.

Julie Castro Abrams:

Oh my God. I was talking to one of my portfolio company founders last week and in the early days she had to be able to prove something but didn’t have the money to be able to prove it, right? So, she took a data set from the federal government at the FDA and was able to use that data as a proxy for what she was trying to accomplish. And that happens all the time. The whole foundation of innovation in this country is based on universities and federal funding and innovation resources. Even getting a patent through today, figuring out how can you know, where is that going to stand if you don’t have any employees? You’re literally, literally stopping the cycle of business growth and innovation.

Melinda Wittstock:

Yeah, I mean you know, you go back aways and you think the iPhone wouldn’t have been possible but for, or the Internet actually would not have been possible but for the taxpayer and the government and the research going on within government institutions and agencies and universities.

Julie Castro Abrams:

Yeah.

Melinda Wittstock:

All of that innovation for the most part happened there. It was commercialized, you know, startups in Silicon Valley and beyond. But that’s actually the case. And so, you watch this now think, oh my goodness, when I agree with you about the diversity. Because if you, if you look even at, and I, I’m sure you have all the up-to-date stats that you can rattle off but I’ve everything from women founded companies return on average $0.60 more on every dollar invested. Women companies tend to like survive…

Julie Castro Abrams:

Yeah. They’re more capital efficient and performance driven. Yeah, it’s, there’s, the data is irrefutable. So that’s not even the issue. The issue is hearts and minds of the, you know, public and our biases like our culture hires, promotes and invests in men for their potential. You know this when you go look for a job they always tell women won’t apply. Well, we’ve been trained. It’s, there’s a real reason for that.

Julie Castro Abrams:

Women are hired, promoted and invested in for what we’ve done. And so, if you haven’t done it, there’s all this skepticism and when, when, when you’re being interviewed, the date we’ve, there’s documentation of this multiple studies by the way, there’s nothing marginal about this that show that in a venture assessment conversation when somebody’s, you’re pitching to a venture fund, men are asked how big can this get? How exciting. Like all the big picture future focused stuff. And women are asked, you know, all these risk mitigation questions, what have you already done? And the, the scrutiny is so much different and higher for them. So, of course you’re not going to get excited about investing in, in all the reasons why you manage risk. You’re going to be excited about investing the potential for growth and big vision.

Melinda Wittstock:

Oh gosh. I mean, I know I’ve lived that. I’m a five-time serial entrepreneur in tech and I can’t tell you how many pitch meetings I’ve had where you, you to begin with, I wasn’t really aware up against but there were always, there were always questions that were designed almost whether consciously or unconsciously to put you on the defensive. And, and it was all about risk mitigation, not the potential. And it drove me crazy. And then to the point where it’s like, let’s see, how can I change the power dynamic in this conversation? How can I shift it so that okay, yes, our cost of acquisition, our cost of user acquisition may be this number, but look at the return we’re getting on that. Let’s focus on that.

Melinda Wittstock:

Just figuring out for female entrepreneurs going out to fundraise, getting better at those, at those conversations is part of it, but it’s still very, very, it’s still very, very hard. What advice would you be giving now to female founders at this moment in time? Say they’re pre seed, seed Series A just in that, in that area, right? And they’re going out and raising money and banging their heads against a wall like not really getting where they need to be. Do they need to really focus on female funds primarily or if. And again. And there are many more of them, but the check sizes tend to be smaller because the funds tend to be smaller. And if you need like a lot of money, what do you do? How do you navigate that? What’s your best advice?

Julie Castro Abrams:

I think it’s both. I don’t, I wouldn’t make it binary in, you know, different kinds of companies get different kinds of reaction. One of the things that’s certainly the case is if you get somebody in your corner that is what we call a technical lead, somebody who is very specifically knowledgeable about and investing in the area that fund, you know, that you’re raising. So, let’s say you’re in an electric vehicle climate kind of space, right? If you have a technical investor, venture investor who’s got that background. Everybody’s going to feel more confident. Well, if they’re, especially if they’re a qualified technical expert, they’re all going to feel more confident in coming in.

Julie Castro Abrams:

So that said, you may have challenges getting that technical lead, especially early on. A lot of them won’t come in until you’re like a Series B later stage. So especially in the early days, women run funds are really warm and, and understand you and will look at you differently. So, there’s a lot of opportunity with women run funds and they treat you different on the, in the board meetings. I can’t tell you how many times I have people who will say, I really want you guys to invest. I don’t care how much because I want you on my, in my boardroom because I’m getting beaten up and different things are happening in the boardroom that aren’t appropriate. And, and so I think there’s a, there are a myriad of reasons you want a women run fund on your cap table and someone like how women invest. You know, we have, we have 25,000 women and 600 limited partners investors in our fund and 25,000 people in our network.

Julie Castro Abrams:

If you need expertise or you need an introduction, we can do that in spades. We also help promote people and give them all kinds of visibility. And so, you know, a lot of funds and a lot of, you know, we’ll say, oh, we do all this stuff for you. Talk to some of their other portfolio founders and make sure that, that it’s real…

Melinda Wittstock:

They actually do…

Julie Castro Abrams:

Yeah. Because it’s often not…

Melinda Wittstock:

Yeah. So, yeah, there’s a lot of talk. Talk, right? Oh my God. So how deep are those networks and…

Julie Castro Abrams:

Right.

Melinda Wittstock:

Yeah.

Julie Castro Abrams:

And when I talk to some of those people, I’m like, I know you have good intentions and you think, but like this is bad, that you’re overstating it. I don’t believe in doing that.

Melinda Wittstock:

One of the things that, you know, I’ve learned is that you need to qualify the investor as much as the investor is qualifying you. So, when you’re looking from your side of the table, when you’re looking at a founder and evaluating a founder and an opportunity, let’s assume that they have a good market and they, they have a good moat, they have a good defensive like differentiated solution. They have the expertise; they have all of that. But beyond that, what are you looking for in the founder? What do you want to see that makes you confident to invest in that particular team?

Julie Castro Abrams:

Well, the truth is, you know, grit. Proven, sort of I’m going to do whatever it takes experience as an entrepreneur already those are really important and hard to quantify. But do you really believe this, this, you know, do I believe this entrepreneur can leverage networks and resources? Are they going to be great at building a good team and have, is there evidence at least in their advisors, for example, that they have influence and can and activate some, some resources and then, you know, we all kind of have good radar if you listen to it when you’re looking at a founder for their own, for their own contributions. But there’s a fine line between positive and confident and the used car salesman. Some people are so caught up in the emotional story about why they built this, this, you know, company that and they spend all their time on the problem they’re trying to solve. That’s kind of a signal sometimes that they’re not going to have good perspective. But it could also be a signal if it’s balanced well, that they’re going to have the grit to for the long haul. So, it’s judgment in so many of those intimate moments of assessment.

Julie Castro Abrams:

Another thing I’ll tell you is if you have a very thorough data room and I know pre-seed or baby seed companies, that’s not necessarily realistic. But the more mature your structures are in terms of that, the more confidence I get and the less I’m going to hang out and asking you questions about stuff because I, it’s really at my fingertips. And I think as you know, when you over, you know, when you over produce, prepare, whatever, people are less likely to come pick at you and ask you what the cost of the pencil was. So, you know, anyone who’s ever run a board and had a board meeting knows that. So yeah, just be the more prepared, the better, the better advisors, the better your ability to balance your passion and what, and knowing that, that what my needs are, I’M a venture Investor. I have 600 friends and colleagues who have put their trust in me to make investments in companies that will return financial returns that they, yes, they care about the mission. This is not a nonprofit. I absolutely have to believe I can see a 10 times return of my investment in five to seven years.

Melinda Wittstock:

Right.

Julie Castro Abrams:

That’s not 10 times revenue of what year, you know, how much, how the size of your company that’s actually based on what am I going to get back based on, you know, what can I sell this for and how much dilution is there going to be over time.

Melinda Wittstock:

So, you know, founders really understand the dynamics of venture in terms of what you’re actually, how you’re actually evaluating them, because it can be a whole bunch of different things, like where you are in your fund, right? What the, you know, obviously the valuation, how much valuation growth this company is going to have, which isn’t necessarily revenue. I mean, there could be a lot of things if you’re aiming for like exit by acquisition and such. Right, so, so what are some of the things that are pretty vital, like for you, for How Women Invest?

Julie Castro Abrams:

Well, almost everything goes back to, can I see a 10 times return in the time frame that I need to see it in, which is five to seven years, so the end of my fund life? Yeah, sure. You, you can look at the venture fund and you know, some don’t have very much money. I mean, you have to, I mean, the first question before I even pitch them is, are you investing now? What is your average investment, initial investment, and how long does it take for you to make a decision? I think those are good questions to ask really early up front because I know some folks who actually don’t have any liquidity and are still looking at deals because they want to look towards the future. But if you need to raise money now and if you know that you probably won’t spend your time with them in the same way anyway…

Melinda Wittstock:

Oh my goodness. Yeah, I totally get what you’re saying because I can’t count how many term sheets, term sheets I’ve had from funds that haven’t, that their, their LPs haven’t funded them yet, which is, I don’t know…

Julie Castro Abrams:

Yeah, well, I, if you’re talking about someone who says I got to do my capital call, that’s pretty normal. But if you’re talking about someone who hasn’t even raised the fund yet, that’s immoral if you ask me.

Melinda Wittstock:

So, yeah, they have commitments or whatever, but it’s delayed.

Julie Castro Abrams:

Well, that’s, that is kind of, it’s not what we do. But that’s pretty average in venture is like I, I basically when I make a decision of what I’m going to invest, I do a capital call, and I have 10 days to do it. So that actually is pretty standard in venture. So. But, but well anyway that’s my perspective.

Melinda Wittstock:

But tell me a little bit about the women who are in investing. So, like the average check size, mostly it’s, it’s mostly it’s just high net worth individuals that are, are your LPs in effect?

Julie Castro Abrams:

Well, I mean not necessarily. I mean at the minimum you have to be an accredited investor to invest in venture capital. So that means you make $200,000 a year as an individual or as a couple in partnership you make 300 a year or you have a million dollars outside of your home in your retirement account or whatever. So that’s not really what I would consider super high net worth individuals. You know that you got, you live in the Bay Area, it’s pretty hard to survive and a lot less really. So, so, so I think it’s relative. This is not an asset class that goes to people living on the margins.

Julie Castro Abrams:

You make a commitment to invest in a venture fund and it is a 10-year vehicle. You can’t get your money out until companies sell or have an exit of other ways. And so literally there’s not liquidity and, and wealthy women, wealthy people, very wealthy people invest you know, up to 20, 25% in alternative assets like this in like venture because they have enough money they can wait and the returns are significant compared to the stock market, for example. So, in a 10 year fund, I think the general modeling will show that you get three to five times your investment. So, if you invest a hundred thousand dollars, you will get your money return plus 300 to $500,000 in net returns. That’s generally the modeling. Now that’s not how it always works. And I’m not trying to sell you and I’m certainly not promising performance on one of my funds.

Julie Castro Abrams:

That’s just the, the math. And if that, if you get that kind of return, it far outpaces the public markets. So, it can be the, one of the greatest wealth generating activities you can participate it.

Melinda Wittstock:

Right. Do you raise from like, you know, the standard kind of, you know, pension funds, family offices, all that stuff as well?

Julie Castro Abrams:

Well, well we, we raise from family offices, endowments, Foundations, pension funds and really large institutions actually are because they have so much money they have to put to work, they’re generally not investing in any funds that are under, you know, frankly $500 million. I can count the number of women-run venture funds that are that meet that criteria on one hand. So, it’s a very small number. I’m working with a previous chief investment officer of CalPERS, our largest pension fund in the world. And we’re actually building out a fund of funds to be able to take that large institutional dol and bridge it to the women run funds that are so high performing and to be able to make those connections.

Melinda Wittstock:

That’s a really smart idea because I think one of the things that a lot of the female run venture funds that I know and folks in this space, they start with pretty small funds. Maybe fund one is, I don’t know, 10 million or something. The check sizes are pretty small. And then they got to prove that out and then maybe they qualify. Maybe their next one is 25 million or maybe 50 million. And you know, just getting to that 100 million.

Julie Castro Abrams:

Well, that’s that actually if that was the, the trajectory for most funds, that would be a win. I don’t think we’re quite there yet.

Melinda Wittstock:

Really. Okay, you, you know more than me. So where, where are we in terms of this, the average size of most female funds?

Julie Castro Abrams:

Well, last year there was a Pitchbook report. I don’t know what it was for the whole year, but there was a, you know, a half the year or something and I think the average close of a venture fund was $4.4 million run by one.

Melinda Wittstock:

Wow, that’s much smaller…

Julie Castro Abrams:

Which is so small now if you have 300 making investments and, and with 4.4, you know, it’s, it is, it is, it is something to be reckoned with. It is significant. But we, but it is still very in venture world, it is very young and very small and most of them are not having a second fund in the market and the economy has been so bad for the last two years. It’s an interesting, you know, moment in time where women have 52% of the wealth and we have a lot of infrastructure we can invest in, but we need to matchmake. Melinda, that’s, I think that’s my whole message to everybody listening here. Make sure you engage in investing in venture and you introduce it to other women. They’re being, they’re missing out on wealth building. They’re missing out on the power play.

Julie Castro Abrams:

And they need to know they’re invited. And there is, you don’t have to know a lot. I think the, there’s this mystery that make and people will say to me, should I go get an MBA before I invest in a venture fund? And it’s like, well, you don’t actually have to know anything to invest in a venture fund. It’s no different than saying, I’m going to invest in a mutual fund. You have to pick the one you think is going to perform well and that you like what they’re about. You know, it might, you know, be about climate or something else, but. But you, you’re hiring people. The venture fund manager who actually has the MBA and is going to help make those decisions.

Melinda Wittstock:

Do you know, I’ve experienced this a lot where women are more likely to think they have to know everything about it. I was talking to an angel investor who was like, God, Melinda, I love what you’re doing with the AI and blockchain and the podcast world and creator economy, but I feel like I really need to understand AI better before, like, I really need to have a thorough understanding.

Julie Castro Abrams:

Yeah, yeah, yeah, yeah.

Melinda Wittstock:

And I found myself saying, okay, like, don’t take this the wrong way, but when you go to the doctor and they get your diagnosis, do you say, I’m sorry, I’ve got to go get my medical degree?

Julie Castro Abrams:

I know, I know. Right before I can accept having surgery on my toe. Huh? Yeah. I love that you just put those, that, that two and two together in that way.

Melinda Wittstock:

Yeah, it’s, it’s really interesting because men have been doing this historically a lot longer. They have all these networks, hey, I’m in on this deal. Do you want in on this deal? Yeah, sure. You know, if you’re in it, yeah, I’ll be in it. You know, like there’s just that kind. Casual, almost…

Julie Castro Abrams:

It does reflect their behavior in other areas of the world. If you, if you even look at male philanthropy, a lot of that is one-upmanship and ego driven. And if you look at public market per behaviors, men are more likely to invest in individual stocks and they lose money. It’s. They’re paying high fees to invest and move their money around. And there’s no way you can get ahead of the electronic markets. You just cannot physically do it. And so, it’s like gambling and men lose more money, and women make more money in the public markets because of those behaviors.

Julie Castro Abrams:

You actually do see that as the ethos of the venture capital sort of world, which is this, this cowboy, I’m doing it, you should do it. And you watch the, you know, the herd mentality and they’re not doing their own diligence. In many cases, you’ll watch a market explode and crash. And there was an AI bubble last year this time. And so, I think we should all be wary of these following the crowd heard. Gotta be one of the in guys. You know, it’s, it’s actually not really great.

Melinda Wittstock:

Well, everyone now claims to be an Agentic AI business. And then you look at some of these a little bit closer and it’s like, okay, so you’ve got data, and you got your ChatGPT going on. It doesn’t make you Agentic AI. Do you know?

Julie Castro Abrams:

Yes, yes. Yeah.

Melinda Wittstock:

And it’s tempting for founders to think, okay, investors are investing on that, so I gotta pivot my business. That’s the only way I’ll get funded, right? But then not really real. So, it might be eventually, but like, but it, but it’s not. But it creates all these bubbles and then it gets overvalued. Like I think of companies like, like sort of inside deal type things.

Melinda Wittstock:

Like, do you remember during the pandemic when Clubhouse launched, and it had artificially unbelievably crazy valuation of like. I forget what the initial valuation was, but it was in a 100 million sort of like. It had no revenue, nothing. But it was just like, ‘We want to put a lot of money into this.’ So, to justify the money, we’re going to create this crazy valuation. And…

Julie Castro Abrams:

Well, and a lot of it is, is, is it. It’s an overinflated value. Just like we’ve seen. Like right now as we’re speaking, Tesla stock is crashing in part because it was far overvalued. We were valuing Tesla stock based on, you know, potential as much as what it was doing today. And so, if you compare it to other stocks with similar data, it’s an appropriate correction now it’s, it’s X is actually was purchased based on the value of the Tesla stock. And now that it’s being devalued, there could be a, a moment to call that money. So…

Melinda Wittstock:

Oh gosh, it’s an interesting ripple effect.

Julie Castro Abrams:

He’s in a bind, Elon.

Melinda Wittstock:

Yeah, but it’s, but it’s interesting because there is like, there is an example of that kind of like Silicon Valley sort of paradigm of the, the confident sort of salesperson in effect that says this is, oh, this is a future and we’ll be self-driving in like you know, next year and we have this and where all this technology. But it, but it, but it doesn’t exist yet. Not really. It’s not, it doesn’t work. It’s not really a technology company in that sense. The self-driving doesn’t actually work yet. Like all these aspects of it. But people really want to believe.

Melinda Wittstock:

So, there’s a, there’s a kind of showmanship.

Julie Castro Abrams:

PR Melinda, doesn’t it feel good to be able to say I knew Apple was going to explode and I invested in Meta. You know, how many X of my dollar invested, right? That for the rest of your life you get to go to cocktail parties and tell people that you knew I was in on the ground floor. Just that alone is super sexy for like culturally right now. It. That doesn’t mean that your entire portfolio balanced, and you actually made money overall. You could have met 99 mistakes and Apple at least buoyed up some of the correction for the rest of them. But that doesn’t mean you knew always what to pick.

Melinda Wittstock:

No, exactly. And I mean, you know, there’s some luck and timing and both on the entrepreneurial side as well as on the investor side. But one of the things that’s most compelling to me as a woman entrepreneur who really does, like, one of the reasons I started this podcast was just affiliate philosophical belief that the only way that women were really going to succeed at this game is if we literally bought from each other, invested in each other, promoted each other, mentored each other. And I really wanted to see this ecosystem blossom, right? So, this was kind of my what I could do, you know, as a little side thing. While I’ve been growing various businesses, right?

Melinda Wittstock:

I’ve calculated now just based on women get back to me and the sales that they get as a result of this podcast, I’ve driven more than $10 million in revenue.

Julie Castro Abrams:

Oh, Melinda, that’s all doing this right and congratulations and thank you for your vision and commitment.

Melinda Wittstock:

But like, it’s just a cool thing to do. And I because I wasn’t in a position…

Julie Castro Abrams:

You’re using your privilege, you’re using your networks and your, your privilege to make a difference in the world. And you know, when you look back on your life, life, this is probably going to be one of the things you’re the most proud of…

Melinda Wittstock:

Well, here’s the thing…

Julie Castro Abrams:

Like, look at the difference you’ve made in the world.

Melinda Wittstock:

Well, we’re in a position to pick the future winners in the economy, right? As investors, whatever form that investment takes. And like, I, you know, I, you know, once my company exits, I intend to invest, you know, significantly, you know, in other female founders. And I’ve recently become an Entrepreneur in Residence and a Venture Partner at a young new fund that is investing in women. It has a male GP, mind you, you know, 100% dedicated to women because we, we look at the data just like you’re saying, and women return better. So one of the things that really drives me there is that the, the, the investment companies now are in, in effect, picking the winners, right?

Julie Castro Abrams:

And I want you to really think about the implications. Do you care about equal pay? Well, you generally do not have to tell a woman to pay women, women equally. So, if we don’t rebalance this, if we don’t balance the scales and get women running companies in equal numbers to the men, we will forever be begging for equal pay, family, medical, leave. All of these issues that we care about get solved. If you have better representation of who and, and we have the money to do it, Melinda. Women have the money to today, so there is it. We have no excuse. If we do not get in the game and start investing in companies founded by women, venture funds run by women that see and invest in those women, we literally can’t complain because we’re not putting our money where our mouth is and what we care about.

Julie Castro Abrams:

And we’re seeing with, you know, I’m sorry, but we’re seeing with this election that this is, this is a, this is a massive moment of, of reflection for all of us. Are we going to sit by eye and let other people set the stage for who’s the future leaders? I don’t know about you, but I watched that lineup of people kissing the ring on the inauguration and I felt sick to my stomach.

Melinda Wittstock:

Same thing. I felt the same way. And, and, and so like, here’s the thing, Julie. Money talks, right?

Julie Castro Abrams:

Yep. Clearly women have the money, Melinda. We don’t have an excuse.

Melinda Wittstock:

Exactly. So, I mean, you know, we really have to build it. You know, I take a lot of inspiration from my Aunt Bea. Canada’s first female stockbroker. She starts up in the 70s. She’s, she’s struggling, she’s the only one.

Melinda Wittstock:

So, she decides to create her own client base. She does effectively what, what, what you’ve done in her own way. She finds widows and divorcees, okay, who have money, and she gets them in the market. She becomes the highest performer in her whole firm in Toronto, right? But like again, it’s that, it’s that same path. It’s like if no, no one’s going to do it for you, you’ve got to do it, you know, do it on your own, but do it with others. Like we have to create, and you are doing this, which I think is so important.

Melinda Wittstock:

I think it’s really exciting what you’re doing about, you know, CalPERS and figuring out how to apportion this out across a whole bunch of venture funds. I think that’s extremely exciting.

Julie Castro Abrams:

We need to hit all levers in the ecosystem, but the one we can control the most is your audience. Everybody can participate in this ecosystem in some way. So, I encourage everybody to get educated. It’s not, you don’t have to know a lot and just get, get in action.

Melinda Wittstock:

Yeah. Because the, the resources are out there. I remember very early on when I was in New York and I remember trying to raise money for a startup and I talked to these really high net worth women and gosh, it drove me crazy. I literally, I can’t tell you how many times I was told, hey, you know, I do all the charitable giving in the family, but my husband makes all the investment decisions. I’m like, what?

Julie Castro Abrams:

Really?

Melinda Wittstock:

Really?

Julie Castro Abrams:

It’s historically been the role differentiate. But if he goes to an event and his buddies are ponying up bigger dollar amounts, he may surpass all of her philanthropic giving for the year. She’s so thoughtfully and carefully researched and engaged with. And he may just say, here’s 50,000 bucks because my buddy’s doing it. I want to make sure I look like I’m a big guy in the room.

Julie Castro Abrams:

And I love them, dear. They’ve been married for 35 years and there are gender norms in our culture. It’s not the way men and women are birth, born to be, but the culture. You can certainly see themes. And our culture reinforces this male chest beating thing. That’s not good for, for so many people. Only for the ones that appear to be leading.

Melinda Wittstock:

Okay, so here’s a question, here’s a question for you. What does it take to get Mackenzie Bezos… She’s doing all this amazing philanthropy, huge billions of dollars to philanthropy. What gets her to invest in some female venture funds and some female startups?

Julie Castro Abrams:

Well, she may very well. I, I want to say yay. Thank you, Mackenzie. Be Mackenzie Scott, right?

Melinda Wittstock:

Yeah.

Julie Castro Abrams:

I really believe that she’s probably doing a lot of it already, but I would love to see, and I just want to thank her. She’s doing extraordinary things and she’s doing it in a way that’s disrupting and just exactly what we need. And it’s how women lead. I love it. And I want her to know that we can triple, quadruple 10 times the bottom line mine. If she wants to play game, I will introduce her to every woman run venture fund there is. We can, we can disrupt in a big way and that has a huge ripple effects. So, you can take philanthropic dollars.

Julie Castro Abrams:

So, any of you who have a donor advised fund, even if it’s really small, there’s lots of ways you can participate in this. If you have set aside funds for future philanthropy, you can invest those funds today. You might already have, you know, Schwab or Fidelity or somebody else doing that investment for you, but you can actually say, I want to direct this to women run venture funds because I care about them and 10 years from now I’m going to have more money to donate to charity. And I made a difference all along the way with the investments that I made. That to me is, is how you really double your impact as a philanthropist.

Melinda Wittstock:

Exactly. It’s a glaringly obvious win for everybody.

Julie Castro Abrams:

For everybody, buddy. I mean it, it and our husbands. Women are the primary breadwinners in 45% of heterosexual households. Think about that.

Melinda Wittstock:

Yep.

Julie Castro Abrams:

Literally it affects my husband, it affects the economy, children, families. You cannot, if you are not propelling and supporting women in their leadership, if we’re not getting paid equally. It hurts families. Families.

Melinda Wittstock:

It’s so true.

Julie Castro Abrams:

It’s not marginal. It’s literally half.

Melinda Wittstock:

You know what’s interesting too, do you find this, that women are more likely though to, you know, when we’re talking about women who feel very comfortable writing large checks to charities. So, you have a lot of startups that are very socially social impact oriented. Like they’re literally. Their innovation is solving something that a charity is also on, right?

Julie Castro Abrams:

Women inevitably are solving problems with their companies.

Melinda Wittstock:

Yes, right there are women are, tend to be think more mission driven. Are doing a lot of social impact.

Julie Castro Abrams:

They are, yeah, we’re values driven investors. Uh huh.

Melinda Wittstock:

Yeah. So, you get the impact of, of, of the what you would be giving to a charity but, but also a return. Like how could that not be compelling? Like.

Julie Castro Abrams:

Well, I think it is, but I think it’s scary to some people. And, and I’ll just reiterate what we started talking about when we first talked today. If you make your own money and the dollar amount is reasonable and you are, you are clearly a disciplined A plus player anyway. If you made your own money and you know, you know, you know business, you have more confidence as an investor and you know, you could make up that money if it doesn’t have multiple returns. If I am investing money that someone, that someone gave me or that I inherited, whatever, wherever it fit in the, in the. I didn’t earn it out of my own hard work making, you know, a salary. A lot of people feel very anxious about screwing that up. They don’t have confidence, and they can’t make that $25,000 themselves if it doesn’t go well and they don’t want to mess up the money somebody else gave to them.

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Melinda Wittstock:

And we’re back with Julie Castro Abrams, founder of How Women Lead and How Women Invest.

[INTERVIEW CONTINUES]

Julie Castro Abrams:

And, and there’s just a lot of fear and self-doubt that comes into the equation. And as a result, we culturally often sort of think when well I’ll just go to what’s traditional and, and especially if someone’s advising you, they have no reason to take to actually go outside of what this cultural norms are. If you lose money investing in Andreessen Horowitz as a venture firm, nobody says anything because they’re a household name. If you lose money investing in a women run venture firm, people are going to say you see, I told, told you and it could be the exact same investment portfolio, but you have a different reaction to it. A lot of people keep going to the same old folks that aren’t actually performing at the top of the market in public or private markets. We have to, we have to start looking at our culture and our analysis better. And women, you’ve got to be part of this change, and you have to demand that your financial advisors and those who are helping you with your investments are aligned with your values in those investments and stop handing the reins over to someone whose judgment doesn’t have the same cost benefit analysis as you do. Like their risk.

Julie Castro Abrams:

They’re going to, they’re one, they’re not going to want you to take money that they’ve been investing for you and send it to outside of their assets under management, that actually affects them. So, you got to figure out what is their motivation.

Melinda Wittstock:

Oh gosh, because the self-interest of the financial advisor and the financial advisor may or may not be educated about VC, but yeah, they have their own, they have their own interests.

Julie Castro Abrams:

Yeah, exactly.

Melinda Wittstock:

What can be done to educate on that whole financial advisor class? Right? What can be done to educate them, to get them a little bit more amenable to advising on VC? Or is that just…

Julie Castro Abrams:

Well, I don’t know. I think they are conditioned to not believe it. And if you’re disincentivized, if your incentives are you get rewarded based on your assets under management, you make more money, you get more success points, right? You get the better review or whatever. Then if someone takes some assets outside of your management, invest them in the private markets, that actually hurts you.

Julie Castro Abrams:

So, your incentive is misaligned with the best interest of your, your client. So that’s one thing. The other thing is, you know, are. I would always ask the finance; do you invest yourself in venture? Do you know that asset class well enough? And what do you think about it? And if they don’t understand it, if they give you a black and white answer like I, I was interviewing some advisers because I’m trying to find some people to work with my adult kids and someone said I don’t believe in ETFs or mutual funds. And I was like, what? Okay, you give bad adv, right? You know, that, that, that, you know, you have to, you know, listen to your gut enough to be like this doesn’t make sense. So, you never, you know, you, it takes all kinds and is this person really killing it? What’s their track record? Is it, is it? And are they, you know, are they successful themselves financially?

Melinda Wittstock:

Exactly. So many things. So, as we wrap up, can you give me an idea, Julie, looking at your website, your focus kind of really on the Series A end of things, is that right?

Julie Castro Abrams:

We do Seed to Series B actually. So, we’re investing in all the early stages.

Melinda Wittstock:

Got it. Okay. So, you, you’ve got quite a broad range. What are some of the companies that you’re really excited about right now that you’re, you’re, you’re actively funding? And what are some examples of some companies that you’ve invested in that have, have hit it out of the park.

Julie Castro Abrams:

We’re investing in a range of companies from a fertility marketplace to, you know, electric vehicle cathode solution that’s using biofuels instead of precious metals. We’re investing in mental health resources for children and adults. So, I’m, I’m investing along the spectrum of great opportunities to solve critical, important problems.

Melinda Wittstock:

Wonderful. Well, Julie, I just want to thank you so much.

Julie Castro Abrams:

Thank you for having me.

Melinda Wittstock:

Great conversation. I will make sure everyone knows how to find and sign up for How Women Lead and also check out How Women Invest. Anyone listening to this that that is an accredited investor strongly encourage you to consider venture. Julie, thank you so much for putting on with us today.

Julie Castro Abrams:

Thanks for all of your leadership.

[INTERVIEW ENDS]

Melinda Wittstock:

Julie Castro Abrams is the founder of How Women Lead and the venture capital firm How Women Invest.

Melinda Wittstock:

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Melinda Wittstock:

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