Exclusive: Leadout Capital raises $57.7 million to invest in ‘resilient’ founders
Good morning, Broadsheet readers! Yelp will cover abortion travel costs for employees, Zilingo CEO Ankiti Bose faces an investigation and suspension, and one investor is backing “resilient” founders. Have a great Wednesday.
– Take two. Another fundraising exclusive in the Broadsheet this morning: Leadout Capital, a firm that invests in “resilient” founders, has raised $57.7 million for its second fund. The fund is nearly double the size of Leadout’s first $27.5 million fund and backed by LPs including Melinda French Gates’ Pivotal Ventures, J.P. Morgan Asset Management, Goldman Sachs’ Launch With GS, and Accolade Empowerment Fund.
Resilient founders, a term coined by Leadout Capital founder and managing partner Alison Rosenthal, refers to underrepresented or “non-obvious” founders who aren’t white men. Much like Arlan Hamilton’s use of the idiom “underestimated” founders at Backstage Capital, the phrasing places blame where it belongs: on systemic discrimination and a culture of exclusion that exists within the startup ecosystem. But Rosenthal settled on “resiliency” as a core attribute for a reason.
“My hypothesis was that the companies being built and led by these resilient, gritty founders were strong or stronger oftentimes than the average company,” says Rosenthal, who founded Leadout in 2018. Its first fund identified 22 early-stage companies that met the criteria, including gov tech business CoProcure and blockchain startup BlockSpaces. Eighty percent of selected companies were led by diverse founders.
Leadout also seeks out founders with a deep understanding of their customer base, a skill that Rosenthal says is connected to resiliency. “Oftentimes their lived experience creates the ability to build real empathy with a customer or market that they know well,” she says.
While Rosenthal says it’s still too early to draw conclusions regarding her aforementioned hypothesis, Leadout’s LPs seem to believe that resilient founders deliver strong returns. French Gates’ Pivotal Ventures returned for Fund II after anchoring Fund I.
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ALSO IN THE HEADLINES
- Out of office. Zilingo CEO Ankiti Bose has been suspended from her role until May 5 after a fundraising round surfaced concerns over the Singapore-based startup's accounting practices. The technology platform for the fashion industry was in the process of raising up to $200 million with the help of Goldman Sachs. Investors Temasek Holdings and Sequoia Capital India have now launched an investigation. Bose denies any allegation of wrongdoing and says her suspension is related to complaints of harassment she brought forward. Bloomberg
- Business travel. Yelp is the latest company pledging to cover travel costs for employees who must travel out of state to get an abortion. The company, which has 4,000 U.S. employees and 200 in Texas, joins Citi and Match Group in making a commitment to reproductive care access for workers. Bloomberg
- Abortion ban. Yelp's pledge comes just in time, too. Yesterday, Oklahoma Gov. Kevin Stitt signed an abortion ban into law, effectively making abortion illegal in the state. Anyone who is convicted of performing an abortion would face up to a $100,000 fine and up to 10 years in prison. The bill's only exception is for an abortion performed to save a mother's life. Associated Press
- Health gap. It's Black Maternal Health Week—a time to remember that Black mothers are three times more likely than white women to die in childbirth. Vice President Kamala Harris is scheduled to host a meeting later this week to discuss racial disparities in maternal health. Today
MOVERS AND SHAKERS: Activision Blizzard, the gaming company with allegations of a toxic culture, hired Accenture's Kristen Hines as its first chief diversity, equity, and inclusion officer. Imperfect Foods appointed Kelly Nigh as its chief merchandising officer. Hootsuite appointed Natalia Williams as its chief product officer. Plaid hired Ripsy Bandourian as its head of Europe. Rich Talent Group hired former Brunswick Group partner Nicole Reboe as president. Wristcam adds former Beats CEO Susan Paley to its board. Lara Cumberland, the head of M&A integration at Meta is leaving her position to join Pacaso as its chief operating officer.
IN CASE YOU MISSED IT
- Pay problems. Mississippi lawmakers passed a bill on equal pay, ending the state's tenure as the only U.S. state without such legislation. But equal pay advocates say the bill actually hurts the cause because it provides fewer protections than existing federal law does. Washington Post
- Out of state. The protections of California's Silenced No More Act, championed by Pinterest whistleblower Ifeoma Ozoma, apply to all Google employees, no matter their location. The company wrote in a proxy statement that employees are free to discuss assault, harassment, or discrimination they faced during their employment. Google's turnaround is in response to a shareholder proposal that would require the company to issue a report on the impact of employee-silencing clauses on harassment and discrimination claims. Protocol
- Dream team. During this year's WNBA draft, the top pick was Kentucky guard Rhyne Howard. She'll be heading to the Atlanta Dream. The No. 2 pick was Baylor's NaLyssa Smith who was drafted by the Indiana Fever. ESPN
ON MY RADAR
Virginia lawmakers ban the sending of unwanted ‘intimate images’ The Virginian-Pilot
Viola Davis, inside out New York Times
Quinta Brunson, star student Bustle
How congresswoman Katherine Clark gets it done The Cut
- Rihanna, featured on the cover of Vogue.
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