Peanut Launches Starther: A Microfund for Women-Founded Startups

Peanut Launches StartHER Microfund for Underrepresented Founders

Peanut, the social networking platform designed for women, is expanding its operations into the investment sector. The company has announced the launch of StartHER, a new microfund dedicated to supporting entrepreneurs.

Focus on Inclusive Investment

This fund will specifically concentrate on investing in women founders, as well as individuals from historically marginalized groups. This includes founders “of all ages, life stages, ethnicities and sexual orientations,” according to the company’s statement.

StartHER is designed to address the challenges faced by certain groups when attempting to secure initial funding – often known as the “friends and family round.”

Addressing the Initial Funding Gap

Peanut highlights the inherent bias in the assumption that all startup founders possess access to affluent friends or family capable of providing early-stage capital.

These initial funding rounds typically range from $10,000 to $150,000 or more, and can be crucial for a new company’s launch.

“The expectation that founders should rely on their existing networks for investment creates an uneven playing field,” explains Michelle Kennedy, Peanut CEO. “Without removing barriers to initial capital, achieving a more diverse founder profile throughout the fundraising process will remain difficult.”

Kennedy further states that Peanut’s StartHER fund aims to provide access to early funding and act as a supportive “family” for founders, opening doors to professional networks.

Pandemic's Impact on Female Founders

Data from Crunchbase suggests that funding for female-founded startups globally decreased by 27% in 2020 compared to 2019. This decline may be linked to the pandemic’s disruption of in-person networking events.

Additionally, the closure of schools and childcare facilities disproportionately impacted women, who often serve as primary family caretakers.

Underrepresentation in Venture Capital

Even prior to the pandemic, women were significantly underrepresented in the venture capital industry. Currently, only 13% of decision-makers at VC firms are women, potentially influencing funding decisions.

Expert Investment Committee

“The venture capital landscape is often dominated by individuals with privilege and strong connections,” says Anu Duggal, Founding Partner of Female Founders Fund. “I am pleased to join StartHER’s investment committee to support entrepreneurs who have been historically overlooked and help them expand their networks within the venture capital community.”

Fund Details and Investment Strategy

StartHER intends to bridge this gap by providing small investments to early-stage, pre-seed companies focused on positive societal impact, healthcare, or environmental sustainability.

The fund will offer investments ranging from $25,000 to $50,000, often representing a startup’s first external funding. The total fund size is $300,000, with plans for 3-4 investments in 2021.

Peanut will not seek an equity stake in the companies it invests in.

“Our investment decisions will be guided by deal flow and a focus on maximizing impact rather than solely pursuing financial returns,” Kennedy explains. “StartHER’s primary goal is to diversify the venture capital pipeline by providing an entry point for underrepresented founders.”

Investment Committee Members

The investment committee includes journalist and angel investor Bérénice Magistretti; Vanessa Kingori MBE, Chief Business Officer at Conde Nast Britain; Shilpa Yarlagadda, Founder of Shiffon Co. and Startup Girl Foundation; and Elizabeth Uviebinene, author, columnist and Brand Strategist.