Sarah Kunst is carving a new path for female entrepreneurs worldwide. Her new venture capital fund, Cleo Capital, has staked a claim in the male-dominated field and broken new ground. Its goal of diversity, inclusion and funding for underrepresented start-ups, has created an uproar. From her contributions with Vivre as a merchandising intern to her position as an Investor Board Member with Venture For America, Kunst has made a steady climb to prove that women can also play for higher stakes.
Kunst wasn’t always a venture capital mogul. During her enrollment at Michigan State University, she found her niche in the Retailing Student Association and explored pathways of the retailing industry. Her interests first began with retail and marketing developments, where she made strides with franchises such as, Apple, Red Bull, Chanel, and Coty Beauty. Even after graduating, she began networking with members of Sequoia Capital as a Scout, seeking out entrepreneurs who were looking to invest in “the next big thing.” Within these companies, Kunst witnessed firsthand the underrepresentation of various minorities, women, and people of color.
In case you’re unfamiliar with the term, a venture capitalist is one who provides investments, capital, or monetary value to firms who have the potential to be a lucrative asset. These are typically start-up companies or small businesses that would like to expand but lack the financial ability to do so. The investments are known as venture capital, ergo the investors are venture capitalists. Most of the time, businesses cannot enter the equity market because of the lack of interest from venture capitalists. This struggle falls on the head of female entrepreneurs more often than not. Melody McCloskey, founder of StyleSeat, and Whitney Wolfe Herd, founder of Bumble and co-founder of Tinder, both experienced the devastation of being shooed out of investment meetings, their start-ups being anything but interesting to a room full of wealthy men. So, when Kunst introduced her idea, McCloskey and Herd were quick to follow.
Cleo Capital became one of the largest female-owned venture capital companies as of 2018. Its unique approach to venture capitalism is its uber-feminine scouting practices and investment motives. Hiring only women as scouting agents, the company seeks to provide funding for start-ups, businesses, and established companies owned and run by women. Using only female scouts is intended to help boost female participation within the venture capital field. Medium.com describes scouts as “individuals using money fully or partially fronted by another VC fund to make investments in early-stage companies.” In short, this small group of people are the eyes and ears of venture capital companies. Kunst doesn’t limit her scouts’ investments to solely female-founded companies, but rather trusts and encourages them to seek out the best deals, according to Crunchbase. This tactic allows the company to diversify its funding. Because funding for minority start-ups are few and far between, Cleo Capital provides much-needed financial support for those who are overlooked. Its success has been constant and on-going, having this year closed a $3.5 million fund “targeted at making women a larger part of the decision-making process in venture capital.”
Cleo Capital’s growth was a surprising feat considering that it is rather difficult for women of color to invest and only 11% of venture capitalists are women. All Raise, a new non-profit organization founded by female investors that dedicates itself to the “founding, funding, and building of technology-driven companies” quotes female representation as “consistently low.” They note that only 214 investing partners at American Venture Capitalist firms are female, a not-so-startling statistic considering nearly 90% of representation and investments are male. Kunst’s rebellious firm is challenging these statistics while seeking more female representation. Kunst even comments on greater success when investing in diversity, stating in an interview with Girlboss, “go hire more diverse people and charge them with finding you brilliant, innovative, game-changing founders.” With this business approach and positive mindset, Kunst has yet to falter in her attempt to enable and empower female investors.