 Live from Houston, Texas. It's theCUBE, covering Grace Hopper's celebration of women in computing. Welcome back to theCUBE's coverage of the Grace Hopper Conference in Houston, Texas. I'm your host, Rebecca Knight. I'm joined by my co-host, Karis Hustad. She is a reporter at Chicago Inno and also one of our ground truth reporting fellows. Our guest today is Misha Dua. She is the founder of Built by Girls and also the head of the BBG Ventures Venture Fund, which is part of AOL. Yeah, thanks for having me, guys. Thanks for joining us. Yeah, thanks for being on. So I want to talk a bit about BBG Ventures first. So you're a venture firm that invests in startups with at least one female founder. Tell us about why that is. That's right. So we launched about two years ago out of AOL really with this thesis that women are the dominant consumer. So if you look across the internet, social platforms, we make 85% of purchasing decisions. And we're really, all these stats around gaming, the use of the phone, camera, women are the leaders. So I think it makes a lot of sense to be backing founders, particular in the consumer space, who really are the end user. And then I think if you look at the data on the other side, actually what we're seeing is that women drive higher returns. So first round capital did a study of over 600 founders in the last 10 years and they found that companies with at least one female founder drove 63% higher returns. So when you bring that together, you realize actually investing in women in tech is not about doing good. It's actually about making money and that's a really great thing. Yeah, absolutely. But what's so interesting is that less than 10% of venture funding goes to female run startups. So where do you think that breakdown is? Why wouldn't people follow the money? Yeah, well I think the majority of VC partners are white males or Indian men actually. My business partner often jokes with me, she says, Nisha, you're more diverse because you're a woman than because you're Indian. And so people invest in what they know, what they understand, and they invest in people who look like them. And looks don't necessarily mean from like a visual perspective, but I went to Stanford, I was an engineer, I worked at this tech company. And so there's historically been a lack of women that fit that profile, that fit the Mark Zuckerberg profile. And I think that's widely acknowledged in Silicon Valley. So I think that's one piece of it. And then the other piece is that traditional VCs, men don't have this network of women. So what many male VCs will say is, we'd love to invest in female founders, but there just aren't enough of them. We're not seeing them. We know that that's wrong because we've seen over 1,200 companies in the last two years. So they're definitely out there. And then I think women are often solving problems that they've experienced. And so it can be harder for a male partner to identify with that problem they're solving. We hear a lot of stories from female founders saying, this investment partner said, let me ask my wife, let me ask my girlfriend, let me ask my daughter, let me ask my assistant. And so there's definitely, I think, a gap in the understanding of the problems that women are solving. Yeah, absolutely. So let's talk about some of the companies that you have invested in, because I think that we have the sense that they're not getting enough investment in that more women need to start found startups, but you've actually been actively investing. And so tell us about some of the most exciting startups that you're working with right now. So we are invested in 40 companies. I think we have nearly the largest portfolio, a fun portfolio of female founders in the country. Women are solving a broad range of problems. So they're solving anything from the fashion and beauty space. We're in a company called Glam Squad, which is like the Uber of beauty. They send a stylist to your house to do your hair, do your makeup, do your nails. That is, the unit economics on that business are really smart, right? Like that business works. On the flip side, we were invested in a male-female team, both engineers, who've built a weather app that uses the sensors in your smartphone to give you a more accurate weather prediction. It's called Sunshine. The weather prediction on Sunshine is probably 10 times better than the weather app on your phone. And what's really interesting about that is, male-female team, weather is something we all need. But interestingly, 75% of the users are women. And that's because a really great use case for accurate weather prediction is figuring out what to wear in the morning. So really interesting set of consumer problems, all the way to really technical problems. So we're invested in a company called Uncharted Play, which is harnessing the power of kinetic energy to create power for third world countries like Nigeria. And they're really figuring out how to reduce the size of that technology to effectively become the intel of energy. So what is this chip that we can put into everything that moves to harness, you walking or using a stroller and to create energy that way and exchange energy that way? So yeah, you've been doing this for two years and it sounds like some really fascinating startups. Have you seen that return? As we've seen that diverse startups are supposed to give these great returns. How has it been on the financial side? Yeah, I mean, I think from a data perspective, you're looking at a relative comparison. So we don't have those all-male teams where we can do that comparison. So that's one piece. The second piece is, when you're looking at early stage investing, the oldest company in our portfolio is really probably only three years old. We've only been doing this for two years, right? So it's actually, you can't really yet say that you've figured out the financial return. I mean, we could run an IRR calculation and say these companies are performing well. What I do know is that we're measuring success on, and this is what you should be doing at the early stage, whether these companies are getting to the next round of funding, right? It's our job to help them get to their series A or their series B. Is yours at early stage? We're early stage. So I think what we're seeing is, over a third of the companies are raising their second round of money, or have been successful at raising their second round of money, which is really indicative of the traction that these companies are seeing. We're seeing other signs of success, right? So we have a company called Hopskip Drive in San Francisco that is a ride-sharing service for kids. Now, there are lots of ride-sharing companies, right? We know the big ones. They had a significant competitor in the Bay Area, run by two men. It failed. They raised $10 million and they had to shut down. I think in one sense, a sign of success is, have these guys been successful in a very difficult market? And we're seeing that with some of these women founders precisely because they are building for women. So they're the end user. So at Hopskip Drive, they've been very thoughtful and very deliberate about the way in which they've rolled out their driving service through different geographies. They've been really thoughtful about building a sticky product versus spending money on upfront customer acquisition, right? And those are things that are gonna make any startup successful. So I think it's early days, but we're seeing a number of companies that are, 20 of our companies already generate revenue. In early stage, that's like a bit of a myth, right? So I think women are also building companies that are real businesses. Yeah, absolutely. So I mean, and it's really fascinating to hear, these are great examples, but women still do struggle to get funding. So I'm curious if you've heard from the entrepreneurs that you've worked with, are they just coming to you because they know they don't have to deal with the usual obstacles to getting funding? I'm curious about the pipeline that you're creating as a woman in venture capital and specifically reaching out to women entrepreneurs. Yeah, I mean, I think we definitely get a lot of outreach from women who've had trouble finding funding. I would say that's not necessarily the reason they come to us. I think they come to us for two reasons. One is because they want to have women at the table. So they may have a set of other founders, but having a board or a set of investors who don't look like you and maybe don't understand your problem is less appealing than having someone at the table who does. So I think that's one reason. And the fact that we put a stake in the ground on that means that we're highly approachable. I think the second reason actually is that our backgrounds are as operators and running businesses and we're obsessed consumers. So my partner, Susan Lyne, was the CEO of Guilt, was the CEO of Martha Stewart, ran ABC Entertainment. Greenlit, some shows that you're very familiar with that are still on TV today. And so she brings a wealth of operating experience. I ran a website at AOL. We're active participants once we invest to the extent that the company needs us. And then we bring the backing of AOL and now Verizon, because Verizon acquired AOL, which means we have a network that we can tap into. And when the biggest challenge for a startup is traction and scale, that's actually a really valuable asset. But there's no question that women are still having trouble raising. You know, we have a company, one of our best performing companies, they recently raised their series A. It took them a very long time to raise their seed round. And, you know, when they finally did, they'd been at it for two years, but they had incredible metrics. And so, you know, a male partner led that round because he really understood it. We came in and now they're having no trouble at all. So, you know, I think it's a sad fact that there are some female founders out there with great businesses who maybe have to show a little more to be funded. And I think that's the kind of conversation that we need to change with more female investors. Yeah, yeah. And I'm curious about the companies that they're building as well as, I mean, you start with startup and your goal is to scale. Are they thinking about diversity as they scale? And is that something that you kind of recommend or, you know, help startups think about as they grow? So, look, there's no question that the data says diverse teams perform better. And that's diversity across gender, across race, multiple viewpoints, improved performance. So, you know, I think what's interesting about women is they don't really need to think about that. They're always thinking about that. I think it's companies that are all men that need to think about it. So, overwhelmingly in our startups, I actually think you see a very diverse set. There are a few companies that are all women. You know, we're investors in a company called The Wing which just launched, which is actually a co-working networking space for women only like a SOHO house for women. So, I think that's one of the exceptions to the rules. I think, broadly speaking, women inherently identify with differing viewpoints. But I think, you know, racial diversity is a really important thing. You have to think about where is that pipeline that you're going to to recruit? And Grace Hopper is a really great example of that. The diversity in the room here, I think I was saying to you, I've never been in a room with so many women in technology, but also such a diverse set. And I think that's what we're seeing with organizations that are thinking about the early pipeline like a Girls Who Code, for example, Black Girls Code, that is really helping that the pipeline of diverse talent come up in the ranks. But I do think if you're a mail-run company, you need to be actively thinking about that. Yeah, right. And I want to talk about the pipeline a little bit too because Built By Girls, which was kind of the organization that inspired BBG Ventures, that's all about helping girls think about tech in like every part of their lives. So tell us a little bit of how you're addressing like that side of the pipeline problem. So I guess you eventually will have more female-run startups. Yeah, I mean, they're the next generation of female founders, right? And so one of the ways we think about it is start with the 16-year-old girl. Start with the girl who is not quite sure what she wants to do. We call them digital natives. They're all using Snapchat, Snapchat's behind us today. But do they know how it's built? And are they really thinking about how technology can accelerate their career? Whether they end up on the business side or the marketing side, or whether they're the technology driving the company. And so we are really running a series of programs, internships, competitions, meetups that are aimed at exposing girls to the variety of career options, whether you're a product manager, whether you're an engineer, and connecting them in with those mentors. So I think part of the pipeline problem for us is how do we build this new club? So if there's an old boys' club today in technology, how do we dismantle that a little bit, shake it up, and not build a women's-only club, but build a club that is built from the ground up where men and women are interacting equally. And I think the way to do that is to start with young women and connect young women into these professionals in technology at a very early stage. Help them build those networks early. Nisha, we're just about out of time, but I just wanted to get your last piece of advice for that female entrepreneur who's out there working away in her basement or her garage and is thinking about the next step. What would you say to that woman? Talk to as many people as possible in your industry. So it's really easy to want to find someone and just ask them to give you money. Your first conversation should never be a pitch for money. You should always be talking to people, sharing your expertise, building meaningful relationships, and ultimately, those relationships will introduce you to the person who is ready to give you money. Great advice. Thank you so much to our guest, Nisha Dua, and our co-host, Karis Hustad. I'm Rebecca Knight, co-host for theCUBE, and we'll be back with our live coverage of the Grace Hopper Conference in Houston, Texas after this short break.