Meet the influencer turned VC who's making sure women-led startups get taken seriouslyView transcript
What’s an ambitious entrepreneur to do when she’s already bootstrapped two successful companies and sold them before age 35? If she’s Jaclyn Johnson, the answer is to become a venture capitalist to shake up the VC industry boy’s club and help other women-led startups get the funding they deserve — from fashion to skincare and pop-up museums.
Johnson, who started out as an influencer before there was even a name for it, is the founder of New Money Ventures, a $20 million fund that invests in women-founded and women-led businesses. The fund is backed by Peak6 Investments, a firm co-founded by investor Jenny Just in 199,7 which focuses on technology.
The companies that Johnson invests in are early-stage, high-growth consumer businesses that she says are “built to disrupt.” And she doesn’t just shell out cash, but provides mentorship, too, offering up hands-on expertise and tapping contacts in her network to help founders scale and grow their businesses.
Only 5% of VC partners are women, and often, Johnson is the only woman in the room with her fellow investors. She told us that having a woman in a position to make funding decisions matters for female founders because investors are more likely to get excited about something they know and understand.
Johnson herself is no stranger to supporting women. Even before heading up the fund she spent her career helping women succeed as a mentor, advisor, and angel investor. She’s also found the time to write a memoir, WorkParty, full of advice on how to build a business and to host a podcast by the same name.
And as for building a business from the ground up, Johnson has experience there too. Her first company was the digital marketing agency (No Subject). After selling the agency, she launched Create & Cultivate, a media platform and conference aimed at connecting female millennial entrepreneurs, where she interviewed the likes of Meghan Markle and Martha Stewart.
This time Johnson was answering the questions. We caught up with her to talk about why she got involved in the VC space, the secret to success and the opportunities she sees for women in Web3.
This interview has been condensed and edited for clarity.
The inspiration for New Money Ventures, what Johnson looks for as an investor, changes to the influencer economy, women in Web3 and interviewing Martha Stewart00:00:00
Business of Business: I think what you're doing is really inspiring, so I'm so happy that I got to learn about New Money Ventures. Why did you found new money ventures? How's it going?
Jaclyn Johnson: New Money Ventures is a $20 million consumer fund focused on funding the next generation of female-founded or female-led businesses.
It really was born out of my experience of running Create & Cultivate, which is a media company for ambitious women. Running that company, having a ton of conversations, you know, offline and online about running a business, the struggles that women are having and the number one thing that kept coming up in all these conversations was access to capital. Women who were looking to raise money, where they could get it, how they could get in those rooms? And this is a conversation I saw over the five to seven years sort of evolved.
What I realized was hearing the stat over and over again of 2% of venture capital funding goes to women and less than 1% for men of color is extremely depressing. It is a startling stat. But when I looked into how many women were in venture capital, really only 5% of VC firms are led by women. So it makes sense in a way that money flows is that people invest in things they know, things they understand, things that they can relate to. So, if there's not women in those decision making positions, getting money is truly an uphill battle for women. So that really was the impetus for launching New Money Ventures.
I'd been angel investing for many years. And kind of hearing from my cohorts about the issues they were having, the problems they were running into, and wanting to really bring my expertise – and cash to the table to really start investing in women in providing mentorship.
My God, I mean, those statistics are, they're just startling. What's it like? You're in a room with a bunch of men? And how does that normally play?
I've been really fortunate that like the last 10 years of my career have been all around women. So, it's definitely a new experience. I mean, look, it's a different, it's a different mindset. At the end of the day, as mentioned, I think there's been a strong push for more male centric VCs, to invest in both minority and women-owned businesses, and make that more of a focus. But as I said, when you're investing in something, it's because you just really believe in the product or the founder, whatever it is, and it's something that you can imagine getting big and public and huge and growing and scaling. If it’s something that doesn't necessarily speak to you as a consumer, it's more challenging for you to be able to write those big checks for those different companies.
“[W]hen you're investing in something, it's because you just really believe in the product or the founder, whatever it is, and it's something that you can imagine getting big and public and huge and growing and scaling.”
So, I think it's just we're up against both a generational gap and an opportunity gap. You know, we've had this long run of men having better access to education, obviously. And so we have this generational issue, and then there's also this opportunity issue where women weren't really part of the VC conversation up until five or 10 years ago. So we're up against that, combined with the lack of funding. So there's progress being made, it's just we're in an uphill battle to get there.
You mentioned looking at things through the eyes of a consumer. How does your instinct tell you which businesses to bank on?
There's so many amazing businesses out there, so what we really focus on is a few different things. One is the founder. Having been a founder with two exits under my belt, I understand what it takes to run and scale and grow a business. So really aligning with the founder on their vision and what they see themselves doing, where they see the company going. Making sure that you're aligned with that founder is first and foremost.
Second is profitability. It's sort of been on the back burner for many years, grow at all costs, but now we're seeing the after effects of that. And we really are looking to focus on businesses that either have a clear path to profitability or are already profitable.
And then the other thing is market opportunity. There's a ton of products out there, but what sets you apart from the products that are already existing? Are you expanding on something that already exists and making it a better product or experience? Or are you filling a gap where something doesn't exist already?
That's really what we look for is people who are disrupting an industry, have a strong vision and are running a profitable, well-run company.
Who has been your mentor in your own life?
I haven't had exactly one mentor. I would say it's been sort of a series of mentors over the years. A lot of my mentorship has been horizontal with some of the women that I've been working alongside as we sort of grow into what we're doing.
But I would say one person in particular is Raina Penchansky. Raina is the CEO of DBA [Digital Brand Architects], which was one of the first digital talent agencies. It was acquired by UTA [United Talent Agency] a few years ago. She was a partner on Create & Cultivate and was the person who really has always helped me through any difficult times and how we get through things. She really helped coach me through the sale of Create & Cultivate, and has obviously been a supporter of mine for a long time.
I really appreciate when I can find women, whether they're ahead in their career or at the same level, that provide that level of transparency and honesty and are willing to spill the secrets on what it takes to be successful.
OK, so what is one of those secrets?
A secret to be successful – one I truly believe – is your network is your net worth. You can have the best product and the best run business, but to see momentum, you have to go outside of yourself and really rely on the people around you. And I think Create & Cultivate is a really good example of that. I was building that in a vacuum for a really long time, and it was successful in its own way. But it would never have gotten to the scale I had without bringing in other people to support and help me grow that business. There's that saying “you can own 100% of a business worth $0 or 10% of a business worth $10 billion, which one do you want?” I think that's really important to know.
“[Y]our network is your net worth. You can have the best product and the best run business, but to see momentum, you have to go outside of yourself and really rely on the people around you.”
Create & Cultivate, for the uninitiated, is still going on, but it's something that you founded to create a source of networking for women entrepreneurs, am I right?
Exactly. Yeah. So, we really set out to provide women with the tools, tips and tricks they need to go out and create and cultivate the career of their dreams, and that really manifests in events and podcasts, obviously, media and articles, and all of that sort of stuff. I'm still the founder, and I'm the vice chair at that company, and we were majority acquired by private equity in 2021.
I think what's really strong about that is the branding, and that was partly your magic. Am I correct?
What happened on Create & Cultivate which is really interesting is that I, early days, was an influencer and blogger in the space – and again, this is like 2012, 2013, 2014, really the heyday of the start of the influencer world.
And I was going to all these amazing events and posting about it on my Instagram. And there were gorgeous flower walls and insane gift bags, and it was so beautiful. And my sister, who's a wedding photographer from Florida, messaged me and was like “I would kill to go to an event like that. That's so amazing. So fun.” And simultaneously, I was having experiences as an entrepreneur and wanting to get women together to have these conversations to talk about the good, the bad, the ugly. And I realized those two things can live together, right? We can create an experience that is luxe, that is fun, that is beautiful, that you leave feeling like a million bucks and also give you access to incredible experts, and CEOs and content creators to give you really valuable information. And those two experiences don't need to live separately. We don't need to have conferences in conference rooms, we can get outside the box and create something really magical. And that's kind of how that happened.
What we found was women were gravitating towards these events, not only because they were getting amazing access but because they were enjoying the experience itself.
As somebody who was an early influencer, how do you feel about how the industry has evolved and expanded and how that funding process works with sponsorship from brands?
The influencer economy – which again the creator economy didn't even exist when I was starting – I mean, it's exploded. And I think we've started to see a shift in the democratization of influence. Whereas before it was coming from, like, eight different media companies and that was the only thing that you knew and that was, sort of, the voice of God when it came to things that are cool or not cool or interesting, and we're starting to see this massive spread of influencer culture. So for instance, when I started I think there were maybe 30 influencers, I could name them. Now, there are niche influencers, small influencers, platform agnostic influencers, video content creators, I mean, it is massive.
Even on the VC landscape, the creator economy investments are just getting larger, and larger, and larger. And you're seeing things like Patreon and these larger platforms that are putting the money back in the hands of influencers, and not gatekeeping in such a traditional entertainment format, growing and getting these massive valuations because they really are putting the cash in the hands of the creator, which is even more what we're starting to see in Web3.
But from a sponsorship angle, I think sponsors are really trying to get a few different things out of their sponsorship dollars. One is product testing and sampling. We were in a pandemic, no one could test anything, and it was like everyone was panicking because the best, adoption case for a product is just trying it, loving it and buying it – bottom line. So with things like Create & Cultivate that are IRL, we're seeing sampling as a huge KPI. How many products can I get in the hands of the consumer, so I can, show that traction in that purchase. Influencer marketing is not going away, so really leveraging maybe influencers as spokespeople and leveraging them to be the brand representative at these events is another thing that we're starting to see. And lastly, I would say, a focus and shift away from paid marketing. I think that the iOS update really screwed a lot of people and everyone kind of had to panic to figure out their next new thing when it came to marketing. And they're leaning more into organic marketing, and putting their product in the hands of users for them to create those ads for them specifically on platforms like Tik Tok.
What is one takeaway from your memoir, WorkParty, for those who do want advice on how to build not only your own brand, but to take things to the next level as you have?
I always like to say you have to take yourself seriously, I think, again, if 10 years ago someone was like “I'm going to start monetizing the outfits I wear,” you would have laughed at that. I think the same thing with Create & Cultivate, with me saying “Oh, I'm going to start a business for women that come together and we have these fun, beautiful dinner parties and conferences.” No one would have invested in that idea. It's just about taking yourself seriously, and then building a real business around it, and then proving everyone wrong. It comes down to you and your belief in what you're doing, and then really investing in the success of that idea.
Did you feel like you had to prove people wrong, early on or even now?
Still. With Create & Cultivate, it was such an uphill battle. So many people would just call the business “cute” and it was this “fun little like project” you were doing. But we were doing $14 million in revenue with $3 million plus profitability. So we were a real business that was completely self-funded because there was no way we could have ever gone out for venture.It was one of those things, again, it was always a struggle to be taken seriously in the business world. When I meet women now, and I hear about their struggles, that's part of the reason why I wanted to create New Money Ventures, so no one would ever have to feel that way again about their business.
“With Create & Cultivate, it was such an uphill battle. So many people would just call the business 'cute' and it was this 'fun little like project' you were doing. But we were doing $14 million in revenue with $3 million plus profitability. ”
And one of the companies I think that you've helped fund with new ventures is the Museum of Earth. What is that about? Because you don't really hear about things like that. I know you've also got swimwear brands and skincare, but what is the Museum of Earth?
I’m so excited about this one. So, this is an experiential concept, launching in Los Angeles next year. It is going to be the first museum dedicated to climate change, and telling that story. It’s really a call to all in action, where you can come in and learn about climate change but also what you can do to help prevent it and to create those changes and conversations.
If you think about the idea of museums, like the Smithsonian, all these old, legacy museums, there really hasn't been a future state of what that looks like. So they're really looking to disrupt the museum industry in creating this amazing experience that is educational, that is beautiful, that is fun, that you can really create all over the globe. So the one that they will be launching in Los Angeles is telling the story of specifically the Los Angeles climate, and what's happening in our sort of ecosystem here. But this is a concept that can live in Tokyo and New York and be something that you can go to in all these different cities and learn about their environmental impact and what you can do locally as well as globally.
And for me, I was really bullish on this investment because I do believe in the experience economy. Obviously, Create & Cultivate was an experiential business. And you look at things like the Museum of Ice Cream, which is a little bit different, but has really reinvented and reimagined what experiences can be like, and I think there's room to have even more experiences that are not only fun and Instagrammable, which I personally love, but which can also be educational and informational.
You did sell your business, right?
Yeah, Create & Cultivate was majority acquired by private equity. So, it was it was a majority buyout. I'm still an equity holder and founder and vice chair at the company, though.
Doesn’t that feel like you totally went full circle, in a way?
Yeah, it's really been amazing. I think for me, the thing about Create & Cultivate is I was building and growing the business while also telling women how to build and grow their businesses. So it's been this really amazing trajectory, and I hope it can be an inspirational story to women who maybe think they could never possibly sell their business, but could actually do something really, really big and really major.
And what type of woman-run businesses do you normally gravitate toward? Is it cosmetics? Is it education? Is it fashion? Is it all of them?
It's really everything. I think one category that's extremely hot right now is food and beverage. I think we're seeing a ton of innovation, whether that's being a plant-based food item, looking at the success of Beyond Meat or Impossible, so getting into that category has been really fun and interesting to us. Obviously Covid spiked food in general, and people cooking at home, so that's a hot category.
Cosmetics is huge, obviously. Clean skincare is a massive category and something that we're interested in and always investing in. We have investments in Cay Skin, which is Winnie Harlow’s sun care line. We also invested in Crown Affair. So some of these bigger, CPG brands are very hot in acquisition, looking at Ouai Hair and things like that.
But also marketplace is a huge opportunity, I think. So not necessarily investing in fashion brands, but the e-retailers and the technologies that are creating the marketplaces to sell these smaller businesses.
What do you think are some trends that we're going to be seeing in the coming year with women-run businesses? What are you most excited about? What are you looking forward to? What's your next project as well?
I think women in Web3 is going to be huge. This is a category where really women can come in and have a big impact from the ground up. So, women in Web3 I'm really excited about whether it's NFT's, the creator economy, the metaverse, things like that, I think we'll start to see a lot of interesting investments and companies being started there.
I'm personally excited about a part of New Money Ventures being our brand studio where we actually create brands from the ground up. We'll be launching our first brand this summer. And so really investing in those companies and also providing the resources they need to go out and disrupt different industries.
There’s a lot of interesting trends. I think creator economies is huge, I think marketplaces are big and Web3, those would be my top three.
Are you a fan of the metaverse and which one is your favorite?
Yeah, I mean, they're all very interesting and all very new. I think the metaverse has a major opportunity to create experiences for a far more global audience and create things that you wouldn't normally get access to. Tying into that, what actually I'm most excited about is NFT's tied to IRL experiences. So for instance, creating these loyalty programs around specific ownership where you get access to different events or talks or panels or things like that. I can see that translating into what Create & Cultivate is doing. I can see it translating into more of what communities are going to be looking like moving forward.
OK, last question, I promise. Who was on your favorite panel with Create & Cultivate? Just to get an idea of the level you were doing.
Oh my God, there's so many amazing ones. Interviewing Martha Stewart was a huge highlight for me. She's such a legend, and she was hilarious. I would say close seconds are Issa Rae, Meghan Markle and Gloria Steinem. There's a lot.