BBG Ventures Secures $50 Million for Third Fund

BBG Ventures, a New York-based venture firm established eight years ago, has successfully raised $50 million in capital for its third investment fund. This represents a substantial increase compared to its previous two funds, each totaling $10 million.

A key factor driving this larger fund is the expansion of BBGV’s investor base. Previously reliant on backing from AOL (now *Verizon Media*), the firm now benefits from contributions from a diverse group of institutional and individual investors.

Investor Diversity

This expanded investor pool includes the State of Michigan Retirement Systems, the George Kaiser Family Foundation, and Verizon Ventures. Additionally, prominent entrepreneurs like Poshmark co-founder Tracy Sun and ClassPass co-founder Payal Kadakia have invested, alongside venture capitalists Aileen Lee, Theresia Gouw, and Jennifer Fonstad.

BBG Ventures boasts a growing portfolio of successful investments. While the co-working space, The Wing, encountered challenges due to unforeseen circumstances, other portfolio companies are thriving.

Portfolio Highlights

• Zola: A rapidly expanding e-commerce platform.
• Lola: A leading feminine hygiene brand.
• Spring Health: A mental health benefits platform for employers, recently securing $76 million in Series B funding led by Tiger Global Management.

The firm’s founders, Susan Lyne and Nisha Dua, recognize a significant, often overlooked, opportunity: the potential of investing in teams led by women.

Insights from BBG Ventures Founders

Susan Lyne, formerly a president at ABC, CEO of Martha Stewart Living, and CEO of AOL Brand Group, and Nisha Dua, a former lawyer, management consultant, and founder, shared their perspectives on the current investment landscape.

Investment Strategy

TC: What check sizes will be typical with this new fund? Will you prioritize larger stakes or maintain a diversified approach?

ND: We anticipate writing checks ranging from $500,000 to $1 million. We aim for ownership stakes between 7.5% and 10%, and while we are open to co-leading investment rounds, we generally prefer to take the lead. We have already begun leading rounds with this fund.

SL: We’ve already completed 11 investments since the initial closing of the fund.

Notable Investments

TC: Over the years, what has been your most substantial investment?

ND: Planet Forward, the company founded by Julia Collins, formerly of Zume.

TC: Would you consider establishing a special purpose vehicle (SPV) to increase investment in a particularly promising startup beyond your fund’s capacity?

SL: We did not utilize SPVs for our previous funds, but we have established our first SPV with this fund, investing in Starface. This skincare company employs a unique approach to acne treatment, gaining traction on social media with its distinctive gold star products. They recently completed a Series A funding round, in which we participated, and we also offered an SPV opportunity to our limited partners.

Current Investment Themes

TC: What sectors are currently attracting your attention?

SL: We’ve made significant investments in health and well-being, which currently represents our largest investment category. We are also focused on the future of work and education, climate-friendly commerce, and emerging consumer markets. We consistently identify numerous female founders actively developing innovative companies within these areas.

ND: While we’ve historically identified as a consumer fund, we are increasingly exploring B2B opportunities that address significant consumer challenges.

B2B Examples

SL: Consider Grayce, a platform providing eldercare solutions as an employee benefit. Companies face substantial costs related to employees’ caregiving responsibilities. Grayce connects individuals with planning assistance and resources, including financial, legal, and living support.

ND: Another example is Full Harvest, a marketplace and logistics platform that connects farms with buyers for surplus produce that doesn’t meet cosmetic standards, supplying juice and salad manufacturers, among others.

Founder Experience

TC: How many first-time founders have you backed compared to repeat entrepreneurs?

ND: We have a mix of both, and we do not have a specific preference.

Geographic Focus

TC: Is there a particular geographic region you prioritize?

SL: New York City is our primary source of companies, due to its vibrant female founder community and diverse industry presence. However, we have also invested in companies located in San Francisco, Los Angeles, Milwaukee, and San Diego, recognizing opportunities in at least a dozen cities nationwide.

Syndicate Partnerships

TC: Have your relationships with syndicate partners evolved over time?

ND: Absolutely. One of the most exciting developments in recent years has been our growing partnerships with women GPs, such as Kara Norton of Upfront Ventures and Jess Lee of Sequoia. This network of female venture capitalists fosters strong relationships and often leads to follow-on funding opportunities.

Valuation Disparities

TC: Do you believe women-led teams receive comparable valuations to their all-male counterparts? Recent data indicates a minimal improvement in the wage gap over the past 25 years.

SL: While I cannot definitively state whether women consistently receive lower valuations, it is clear they receive a significantly smaller proportion of venture capital funding. Statistics reveal a substantial disparity in funding allocation between women and men, with the majority of venture capital still directed towards all-male teams. This is partially attributable to large funding rounds, but not enough to bridge the gap.

ND: Research from Harvard Business Review suggests that men are often evaluated based on their potential, while women are assessed on their existing expertise. This difference in evaluation criteria may contribute to valuation discrepancies.

We actively lead investment rounds to identify and support the opportunities presented by these female-led teams, evaluating them solely on their merits.

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