Artemis Fund: Investing in Women Founders | Underserved Communities

The Artemis Fund: Championing Women-Led Startups

Based in Houston, The Artemis Fund was established by three women with a dedicated mission: to foster the growth of startups spearheaded by female leadership. Launched in 2019, the firm successfully completed the closing of its initial $15 million fund earlier this year.

Origins and Founding Principles

Diana Murakhovskaya, alongside Stephanie Campbell and Leslie Goldman, co-founded the firm. Their connection stemmed from a shared passion for startup investment, extending beyond mere financial contributions to encompass active involvement in the companies’ development and success.

“Our intention in launching the fund in 2019 was to establish a micro VC focused on investing in approximately 15 companies, maintaining a concentrated portfolio to facilitate substantial support,” Murakhovskaya explained. The fund’s Limited Partners (LPs) demonstrate gender parity, with a 50/50 split between men and women, and equal capital contributions from each.

Addressing Funding Disparities

The founders recognized the systemic challenges faced by female founders in securing funding. Data from Crunchbase in 2019 revealed that only 13% of venture capital funding was allocated to startups with at least one female founder, while all-female founding teams received a mere 3% of the total.

Furthermore, the women observed a distinct lack of female representation within the Houston investment landscape, which was largely dominated by older, white men. Murakhovskaya, with a background in engineering, collaborated with Campbell, who holds an MBA, to investigate the reasons behind this disparity.

“The question arose: ‘Where are all the women?’,” Murakhovskaya recalled. “This led to a series of dinners designed to connect women and explore their perspectives on investing – why they weren’t participating and what they were pursuing. These gatherings primarily included corporate women with the financial capacity to invest.”

The Formation of a Unique Partnership

Their research indicated that many women had either never been offered investment opportunities or found traditional angel investing to be unfulfilling. Around this time, they connected with Goldman, an attorney and board member at the Houston Angel Network. “She actively invests in around 50 companies and 11 funds, and shared our belief in prioritizing investments in female founders,” Murakhovskaya stated.

The convergence of these three women, each possessing distinct professional expertise, led to the conceptualization of The Artemis Fund. “We believed this combination – an engineer, an MBA, and a lawyer – was ideal. Our diverse backgrounds provide unique advantages to our portfolio companies in numerous ways,” she added.

A Hands-On Investment Approach

The firm’s strategy centers on actively engaging with founders and supporting their business growth. “We aimed to differentiate ourselves from other female-focused VCs by investing nationally, leading or co-leading the majority of our investment rounds, and providing comprehensive support throughout the capital stack. This necessitates a highly concentrated portfolio,” Murakhovskaya clarified.

Focus on Underserved Markets

The fund prioritizes startups founded by women operating in substantial markets that are often overlooked by traditional, male-dominated venture capital firms. Current portfolio companies include UNest, which assists families in utilizing tax-advantaged college savings accounts, and Upgrade, a provider of custom wigs and extensions.

These businesses exemplify the fund’s criteria: being led by women, targeting large markets, and addressing needs neglected by the conventional investment community.

Future Growth and Impact

To date, the firm has invested in 11 companies and intends to add 4-5 more before initiating the fundraising process for its next fund. Murakhovskaya emphasized that while nurturing and developing these companies is paramount, the firm also seeks to identify ventures poised for continued growth through Series A, B, and subsequent funding rounds, ultimately delivering strong returns for its partners.

“This is not a philanthropic endeavor. We firmly believe that women and diverse teams, in particular, will generate superior performance, while simultaneously introducing a broader range of companies, products, and services that cater to underserved consumer needs.”