Seattle-based investment company WestRiver Group (WRG) is rolling out a unique fund strategy that it hopes will change the paradigm for diversity and leadership.
The venture debt and equity firm recently hired a group of veteran tech and business executives to manage four new funds. The company deliberately assigned one man and one woman to co-lead each fund.
The idea came from Erik Anderson, who co-founded WRG 18 years ago when it made early investments in companies such as DocuSign and Topgolf. The firm has expanded since then and now has $2 billion in assets under management.
“Diverse teams make better decisions and should get better results,” Anderson said in an interview at the company’s downtown Seattle headquarters. “That’s what the research says.”
Indeed, there are studies that show how companies with greater diversity earn greater returns.
“This was not a philanthropic idea,” Anderson said.
The larger goal for WRG is to attract diversified teams as potential investments — not just gender, but with ethnicity and overall life experiences.
Anderson, CEO of WRG who is also chairman of Topgolf Entertainment Group, was partially inspired by watching his mother demonstrate strong leadership qualities while growing up in Spokane, Wash.
He knows other diversity-focused investment firms and funds exist, but he’s hoping to make a larger impact given WRG’s reach and capital. The company makes investments in technology, life sciences, energy and experiential sectors, both in the Pacific Northwest and globally.
“We can scale this,” Anderson noted.
Anderson recruited several experienced business leaders with varying career paths to help co-lead four funds:
- Experience Fund, led by Scott Maw and Richelle Parham. Maw was executive vice president and chief financial officer at Starbucks from 2014 to 2018. Parham was previously an executive at Visa and eBay, where she was chief marketing officer.
- Pacific Northwest Fund, led by Anthony Bontrager and Laurel Buckner. Bontrager was CEO at Soda Media and is chairman at Viewpath. Buckner was a general counsel for SonicWall and most recently a managing director at ATN Ventures.
- Healthcare Fund, led by George Montgomery and Deepa Prasad. Montgomery is a longtime healthcare industry vet and co-founded Coherus Biosciences. Prasad is a former investment banker who was most recently chief of staff at Blue Shield of California.
- Opportunity Fund, led by Anderson and Lisa Stone, a former executive at Ellevest and co-founder of BlogHer.
WRG raised $150 million for its Pacific Northwest fund, as GeekWire reported in September. It declined to provide details about the other fund amounts.
Parham, a board member at Best Buy and LabCorp, said she was convinced to join WRG after her first conversation with Anderson.
“People get this,” she said. “They understand that there has been a void and that void doesn’t really make sense.”
That void is demonstrated in the overall makeup of the investment industry. Only 11 percent of decision makers at U.S.-based venture capital firms are women, according to AllRaise. Total VC funding to all-female founding teams reached a record $3.3 billion last year, but it was just 2.8 percent of total capital allocated.
A study from RateMyInvestor and DiversityVC found that 1.8 percent of venture-backed founders are latino while 1 percent are black.
Maw said he was in “retirement mode” as his Starbucks career wound down. But he was drawn to WRG because of its mission.
“We know that when we expand the perspective of our team members and their backgrounds and their education and where they come from, we get better decisions,” said Maw, a board member at Chipotle and Avista. “We believe that very deeply — not in an esoteric numerical way, but in an actual operational way.”
Added Richelle: “This feels like what the future needs to be.”
WRG has a broad portfolio of investments that includes companies such as Singularity University and Topgolf — which just landed in the Seattle area — along with Seattle-area startups such as Igneous, Pro.com, Wicket Labs, Madrona Venture Labs, The Riveter, and more. It employs 25 people.
Source: Geek Wire