Investing in diverse early stage teams with head of Launch with GS Jemma Wolfe
- Launch with GS is Goldman Sachs' initiative to invest in early stage companies.
- The program's latest cohort is focused on investing in Black and Latinx founders.
Todays’s guest on the podcast is Jemma Wolfe. She’s the head of Launch with GS, Goldman Sachs’ $500 million investment strategy in funding early stage companies built by diverse teams. Through Launch With GS, Goldman is trying to increase access to capital and facilitate connections for women, Black, Latinx and other diverse entrepreneurs and investors. Since its inception in June 2018, Launch With GS has deployed more than $230 million globally across businesses with diverse leadership.
Joining Jemma is Jean Brownhill, founder and CEO of Sweeten, a home renovation marketplace and a participant in Launch with GS’ new Black and Latinx cohort.
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The following excerpts were edited for clarity.
Why Goldman Sachs started this initiative
Jemma Wolfe, Goldman Sachs: Launch with GS is Goldman Sachs' investment strategy anchored in our belief that diverse teams ultimately outperform. It's a for-profit, returned-oriented initiative focused on investing capital in companies and investment managers with diverse leadership teams.
We started this for a few reasons. We saw a clear market opportunity. There are very distinct investing gaps that exist across the venture capital ecosystem, by which women and entrepreneurs of color have historically received very little little capital. Last year, less than 3 percent of venture capital went to all-women founding teams, and less than 1 percent went to companies led by entrepreneurs of color. For us, that feels like a misallocation of capital and therefore, an investment opportunity.
We also believe that diversity is good business. We believe that businesses that have diverse management teams ultiamtely outperform. There's a lot of data to back that up. Lastly, we believe there's a very strong pipeline snd for us, it's all about putting capital to work.
The Black and Latinx cohort
Jemma Wolfe, Goldman Sachs: There's all different kinds of diversity: gender, race, ethnicity, and sexual orientation. And so, for us, when we think about the landscape, it's not a one-size-fits-all approach. The more time we spend meeting entrepreneurs and investors and studying the investing gaps, the more we see an opportunity to meet founders and work with them earlier in their journeys. We also want to be able to deliver the best of Goldman Sachs to companies wherever they are in the capital raising cycle.
So, the Black and Latinx Entrepreneur Cohort is an eight-week virtual experience where we are working with 14 companies selected via a very competitive process. And we're basically delivering our resources, expertise and network to them.
Jean Brownhill, Sweeten: I started Sweeten in 2011 after my own very frustrating renovation experience. I had finally saved up enough money to buy a home in Brooklyn and renovate it. Like so many homeowners, I had a really challenging experience. I thought there had to be a better way. As an architect, it was clear that customers with a budget of $15,000 to $100,000 were wildly underserved.
We have a two-sided marketplace for homeowners with renovation projects to post their projects and get matched to a vetted general contractor. We also provide $50,000 of loss protection on each project that's awarded on our platform and uses our tools to track the renovation.
Meeting Goldman Sachs
Jean Brownhill, Sweeten: Unfortunately, I'm one of a very few number of African American women who have raised over $1 million in venture capital. In 2015, there was a list of all the African American women who had raised over $1 million in VC money -- I think there were 12 of us and I think Jemma and her Launch team reached out to all of us. That's how we first got connected and we've been in conversation for a couple of years now.
It's been through these conversations and now the experience being part of the cohort -- I joke with Jemma that I could have asked for so many more things when I realized that I was going to be part of the launch of the cohort. When Jemma said it was part of a rigorous process, Goldman hasn't changed any of its process. It's still Goldman Sachs. They absolutely have more information about my company and done more diligence on my company than the majority of my investors. Really. They are absolutely serious about finding the best entrepreneurs and I'm really fortunate to have made the cut and be part of the cohort.
What's different about the cohort
Jemma Wolfe, Goldman Sachs: The Black and Latinx Entrepreneur Cohort is a virtual experience designed specifically with founders in mind. Jean just shared how we originally connected, but she left out the part where I went to her and asked if we were going to design something for your business, what would you want from Goldman? Jean was really there with us helping us design, vet, and think through what would be the best experience. We really didn't want to provide just another accelerator or incubator in the marketplace. There are already so many amazing experiences out there that founders can apply to. We really wanted to design something that would be uniquely Goldman Sachs and allow us to do what we do best and let our founders focus on running their businesses.
We designed this to be virtual. The only thing that changed when COVID-19 hit was, originally, we were going to do a kickoff at the beginning of June at our headquarters in New York and an investor showcase at the end of the summer. Those two experiences are now virtual. We want Jean to be on the phone with her contractors or with potential customers and then pop in and out to the content we're providing.
Our content sits in two buckets. The first is bringing in thought leaders and industry experts from some of our partners. We're working with Cooley on legal, Carta on cap table management, and Red Antler on branding. But a big chunk of what we're doing is fully customized to each entrepreneur. Jean has a whole team around her at Goldman, which includes senior partner sponsors of the firm, investors, bankers and research analysts.
The role of Goldman Sachs leadership and employees
Goldman Sachs leadership and employees are so excited about this cohort. I can't even tell you the number of emails and pings I get everyday about getting involved and people wanting to offer things. It's been a challenging few months for everybody. These are crazy times. I think the energy and excitement around the entrepreneurs is real and it's manifesting itself in a way that people are spending time on the weekends thinking about introductions for entrepreneurs.
There's a whole network of people at Goldman involved with Launch with GS throughout the year. And throughout this eight-week experience with the cohort, each company has that team around them. We're an organization of over 40,000 and we've received a lot of referrals from everyone about who should apply to the cohort. When I think about the day-to-day of the 14 companies in our program, we probably have about 200 people involved at this point.
Applying to the program
Jean Brownhill, Sweeten: It's clear that the team was committed to doing something to meaningfully change our business. Of course, other programs have similar aims. We all applied because we were excited to be a part of what Goldman Sachs was doing because of the excellence they represent. But honestly, we were all a little skeptical about whether the commitment to helping our businesses was real. I decided to apply because of the rigor I saw that they applied to the program. I've been surprised and delighted by so many aspects of the program, especially the team dedicated to support my company.