The beauty industry wakes up—finally—to Black women

Nicola (Nikki) Chung, Innovation Lead for Hair Care at SheaMoisture
Nicola (Nikki) Chung, Innovation Lead for Hair Care at SheaMoisture

Seventy-five percent of consumers identify as having textured hair, with textured hair including anything from wavy to tight, coily hair. These consumers feel like the typical mass products don’t work for them and they need something special. As a result, if you look across the haircare category, the multicultural space is what is driving growth. In fact, this hair care sector alone now represents a $2 billion per year opportunity. The beauty space for Black women is experiencing exponential growth as more, and larger, companies target the multicultural market. 

Golden Seeds explored this dynamic market with Nicola (Nikki) Chung, Innovation Lead for Hair Care at SheaMoisture, a pioneering brand recently acquired by Unilever. In this role, Nikki has developed hundreds of products for textured hair and helped SheaMoisture change the way the beauty industry serves Black women. Nikki spoke with Carolyn Fikke, the leader of Golden Seeds’ Consumer Sector Group, and a former investment banker with expertise in the consumer space. This is one in a series of Golden Seeds Trend Talks focusing on topics that are relevant, instructive and inspiring.

CF: Let’s start at the beginning. How and why did SheaMoisture get into business?
NC: Our founders were carrying on the legacy of their grandmother. They started a business in the U.S. about 30 years ago, drawing on her expertise in quality soaps and personal care items to support their family. It was a passion close to their hearts. They realized there were no brands representing Black women and championing their needs and causes, so they set out to address those needs. Their mission was not just to serve underserved consumers, but to overserve them. That’s still our motto. SheaMoisture is committed to offering high-quality products with natural ingredients that women can use with confidence.

CF: Can you talk a bit more about what market SheaMoisture serves and what needs are being addressed?
NC: Black consumers in the United States have enormous spending power — $1.3 trillion a year. About $2 billion of that is in the hair care sector, which includes shampoos, conditioners, styling products and treatments for textured hair. Marketers overlooked the need for specialized products for decades. Most hair care products on store shelves weren’t designed for textured hair, which requires more moisturizing, less-frequent shampooing, and more styling and conditioning treatments than straight hair. Commercial brands didn’t offer the full range of products Black women needed, and what they did offer was mostly petroleum-based. Black women wanted high-quality natural ingredients, so many created their own products at home, adding oils and butters and other ingredients to moisturize and protect their hair.

CF: What marketing strategies helped the company gain traction?
NC: It’s always been all about the consumer. In the early days, when money was tight, SheaMoisture focused on connecting with the community. We were among the first to use social media, starting a two-way conversation with customers to establish a relationship. The company also used event marketing, taking part in hair meet-ups where women gathered to talk about their needs and to share and sell products they were making themselves. It was important for SheaMoisture to find out firsthand what consumers wanted and to be seen as part of the solution. That’s true for any entrepreneur. You need a deep understanding of consumer needs—whether that comes from in-house data, social media or frontline testing—so you know your customers’ pain points and frustrations. That’s one of the keys to success, and it’s driven SheaMoisture’s product development. We’ve had to curtail in-person events because of the pandemic, but we’re using virtual events to maintain a connection.

CF: How else has COVID-19 affected the beauty business?
NC: One of the big challenges for beauty companies is that people are working from home and going out less socially. Women don’t need to style their hair every day, so brands have had to pivot. For example, there’s been greater focus on hygiene, and women are washing their hair more. Because they’re visiting salons less often, they’re also coloring and even cutting their hair themselves and using more at-home treatments.

CF: How has SheaMoisture’s product line evolved, and what’s on the horizon?
NC: Consumers have always driven our product innovation. Our early lines were focused on our customers’ top needs. The raw shea line was all about adding moisture, especially for those who were starting to embrace natural hair, rather than using relaxers. When consumers were excited about certain ingredients, we incorporated them into our line. Our largest and most successful line continues to be the coconut and hibiscus products that define curls and control frizz. The Jamaican black castor oil collection is also among our best sellers. The market isn’t static, so we’re continuing to evolve. We’re seeing younger consumers with somewhat different needs. Many are using wigs, weaves and extensions, not to hide their natural hair but to protect it. They also want the ability to vary their looks for different occasions. Wigs and other products can be expensive, so we’re developing products to extend the life of their investment. In addition, we’re looking at products for men, who have their own unique needs.

CF: Is the market evolving as well?
NC: Absolutely. It’s becoming more competitive, and there are more small companies jumping in to serve Black women. Fenty Beauty, which was founded by Rihanna, is one of the success stories. The company provides makeup for hard-to-match skin tones of all types. Another is Mielle Organics, which offers natural ingredients to support healthy hair, skin and nails. The Lip Bar emphasizes inclusivity and offers makeup made with vegan and cruelty-free ingredients.

CF: Tell us about your Community Commerce initiative.
NC: SheaMoisture is committed to giving back to empower Black communities. We recently announced a $1 million fund to support minority entrepreneurs and have already invested millions in education, healthcare, safety and fair wages. It starts with our supply chain. We source Shea Butter from co-ops in Ghana, offering fair wages and investing in the infrastructure to raise the standard of living. We’re also driving investment back into the Black community here in the U.S. and donating to activists working for social change. We support Black creatives as well, using Black artists for our ad campaigns, for example.

CF: How has the acquisition by Unilever affected SheaMoisture?
NC: It’s given us the best of all possible worlds. The community connection is part of our brand DNA, and Unilever respects that. They’re committed to having SheaMoisture own the customer relationship. At the same time, they’ve given us access to a wealth of data and expertise to inform our product innovation, and their operational excellence is helping us move faster and deliver even better results.

CF: What advice do you have for other entrepreneurs?
NC: Focus on your customers so you truly understand their needs and their problems. Social media is a great way to stay connected, and it’s only going to grow as platforms change and new players and technologies emerge. You need passion and skill, and you have to bring something unique and differentiated to the market. Either address a problem nobody else is targeting or define and solve a problem in a better way than the competition.

Learn more about SheaMoisture on the company’s website.

Read more of our Golden Seeds blogs for relevant, instructive and inspiring insights.

How Did She Do It? A Q&A with Lauren Foundos, Founder & Chief Executive Officer at FORTË

Lauren Foundos, Founder & Chief Executive Officer at FORTË
Lauren Foundos, Founder & Chief Executive Officer at FORTË

Lauren Foundos thought her life as a successful institutional bond trader was pretty much perfect. But the demands of the job left her little time for working out, a lifelong passion that had made her an All-American field hockey player. Determined not to lose her sense of self, Lauren left Wall Street and sought to parlay her love of fitness into a business. Her familiarity with exercise studios gave her an idea that was ahead of its time – making live fitness classes available online. That vision led her to found FORTË, a live and on-demand streaming video platform. 

Lauren recently told Golden Seeds managing partner Jo Ann Corkran about the challenges she’s faced, the evolution of her business and how it fits into the pandemic world we live in today. Her story offers inspiration for other entrepreneurs forming and growing their businesses.

JC: Tell us about the origins of your company.
LF: I was successful on Wall Street, trading billions in institutional bonds, but there was something missing. I felt there should be a greater purpose to working hard. I’ve always been passionate about exercising, so I fixated on the fitness space. I started talking to gym owners about the possibility of offering their classes to more than the 20 people in the room. That led to the idea of live-streaming classes to make fitness more accessible to anyone, any time. I was convinced that was the future and didn’t want to find myself in the regrettable position of seeing someone else develop the idea into a successful business. 

In 2015, I incorporated FORTË. The name means “strong” in Albanian, a homage to my parents’ homeland. In 2016, I left my job in finance and spent the next three years developing proprietary hardware and software that would be easy for nontechnical gym owners and operators to use. 

Now, users tell us that we are changing their lives and making them healthier. And gym owners say we helped them save their businesses during the pandemic lockdowns. Nobody said I made their life better when I worked in finance.

JC: What market need are you solving, and how is your approach different from how others have addressed this need?
LF: Before the pandemic, almost nobody was live-streaming fitness classes, though some of the more future-thinking studios had video on demand. Our system makes live streaming easy; we can get a gym or fitness studio live-streaming through their own branded digital platform in 10 days. We hardwire three to five cameras in the chosen location(s) and install an on-site server that duplicates the control room function at a production studio. All an instructor has to do is turn on the microphone. And unlike other video platforms such as Zoom, YouTube or Vimeo, FORTË is designed specifically for the fitness industry. The FORTË system handles everything from bookings to payments in concert with the gym’s existing management software. We are kind of like OpenTable for gyms. We even provide legally compliant music. 

I live and breathe this stuff, so we were able to anticipate every problem a gym owner could encounter and provide a customized, seamless solution. Our customers tell us this was exactly what they have been dreaming about. Another difference from the competition is that we aren’t direct to the consumer, so we don’t have to acquire the customers who’ll be taking and paying for the classes. Our customers, the gyms and studios, already have more than 100 million clients.

JC: What challenges have you encountered along the way? How have you overcome them?
LF: There were a number of challenges in developing the technology. In a TV studio, you have complete control over the environment, but in gyms you have almost no control. Gyms can be dark, noisy and hot, which is bad for the equipment. And streaming video requires a lot of bandwidth, which is not that common in gyms and fitness studios. Solving these problems and making the system scalable took a lot of work. 

Fundraising was another hurdle. I never thought being a woman was a disadvantage, but I discovered that venture capitalists don’t take women as seriously or give them the same respect that they give men. It was a wakeup call. I learned that approximately 2.2% of VC investment goes to female-founded companies, while 86% of VC money goes to all-male teams. I feel fortunate in finding funders like SeventySix Capital and Golden Seeds who see the opportunity in funding female founders.  

JC: What’s coming up next for FORTË? Any big milestones on the horizon?
LF: We’re building a really strong team – we’re up to 60 people now – and we’ve made some great hires from companies like Nike and Orangetheory Fitness. Many of them are women who joined us because they’re excited to be working with and for women. 

COVID has accelerated the adoption of online streaming by gyms and studios, and FORTË has been well positioned to take advantage of this opportunity. We believe livestream classes will continue to be relevant even after society opens back up. People can work out in the gym some days and at home other days. Looking ahead, we think there might be opportunities in industries besides fitness, such as education. We’re working with a cooking school in Tokyo right now.

FORTË is also helping gyms and studios reach an untapped customer base beyond current regular fitness buffs. There are millions of people who are too intimidated to go to gyms because they’re out of shape and/or can’t afford high-priced options like personal trainers and Peloton. Our technology allows gyms to reach these people with livestreaming without costly upfront capital investments.  

Our client list is growing, too. We launched with the YMCA, which has a customer base of 23 million people; UFC is about to go live; and we’re streaming from the gym at UnderArmour’s world headquarters. We are already operating in US, Canada, EU and this is just the beginning.

For more wisdom like this from other incredible female leaders, read more on Golden Seeds’ blog.

Golden Seeds Announces Acquisition of Brandwatch by Cision

Cision, an industry-leading media and marketing platform, has announced its plan to acquire Brandwatch (formerly Crimson Hexagon), a Golden Seeds investment since 2008, the company announced today.

Golden Seeds was the lead investor in the initial funding round of Crimson Hexagon, which was founded in 2007 by Candace Fleming and Gary King, based on their work on quantitative social science at Harvard University. The company’s first products used statistical pattern recognition to analyze unstructured text, particularly in social media posts. The product range and scope expanded considerably over time and the company grew to be one of the largest players in its field of digital consumer research. In 2018, Crimson Hexagon merged with UK company Brandwatch, a leader in digital consumer intelligence and social media listening.

Cision, a private US company, is a global leader in PR, marketing and social media management technology and intelligence. This acquisition combines two leaders in their respective industries and will bring to customers the substantial benefits of their complementary capabilities.

Golden Seeds is proud to have identified the early potential of this technology and to have supported the company throughout its journey to this liquidation event.

“We are proud of our affiliation with Brandwatch, beginning with our early support of Crimson Hexagon, and we are pleased with this result,” said Jo Ann Corkran, Managing Partner of Golden Seeds and of Golden Seeds Funds, who serves on the Brandwatch Board of Directors.

See the press release HERE.

How Did She Do It? A Q&A with Oksana Sokolovsky, Cofounder & CEO of ROAR Augmented Reality

Oksana Sokolovsky, Cofounder & CEO of ROAR Augmented Reality
Oksana Sokolovsky, Cofounder & CEO of ROAR Augmented Reality

Passion is everything to Oksana Sokolovsky, who left a successful Wall Street career to pursue a dream: creating a platform that bridges the physical and digital worlds. She realized her dream as the cofounder of ROAR Augmented Reality, a company that enables individuals, brands and businesses to monetize their own passions by creating immersive augmented reality (AR) experiences. Oksana is about to launch the newest iteration of her software-as-a-service product, PerformLive, which brings together live streaming, augmented reality and commerce in a single, unified marketplace that now serves more than 50,000 clients.

Oksana recently told Golden Seeds Managing Director and deal lead Janet DeFrino how she realized her vision of enabling the passion economy, how her business has evolved and where she sees it going. Her story offers inspiration for other entrepreneurs pursuing their own dreams.

JD: Tell us about the origins of your company.
OS: Prior to starting my entrepreneurial journey, I led technology initiatives on Wall Street. I left because I wanted to create something innovative to merge physical and digital reality. In 2015, I cofounded an incubator that spun off several successful products. One of those products was ROAR.

ROAR started as a platform to augment the physical world with digital content viewed through the lens of a user’s device. Over the past year that has evolved into PerformLive, which helps individuals, brands and companies monetize their audience and give their followers an interactive live experience.

JD: What market need are you solving, and how is your approach different from how others have addressed this need?
OS: We realized there was no end-to-end experience for people who wanted to reach a global audience and monetize their talent or product. They can attract tons of followers on social media, but it’s hard to make money when you’re limited to fractional income from thousands of likes. There was no single platform for both talent and product, or for streaming and commerce, that provided low commission income.

PerformLive brings together the gig and passion economy in one place, combining live shopping, live content, AR, commerce and social communities. Users can shop and try things on — for example, see how a watch looks on their wrist, play with makeup or place a physical item in their room. They may have live interactions, then complete a transaction all in the same live stream. PerformLive is a low commision and ad-free, so the person who is live streaming retains most of the earnings.

JD: What challenges have you encountered along the way? How have you overcome them?
OS: For any startup, getting significant traction is a challenge. It’s also a challenge to position yourself as a reputable brand in an industry where everything is touched by big tech companies such as Amazon, Apple, Facebook and Google. What if they try to do the same thing? They can certainly build the same technology, but you must not let that scare you from building your own.  You need to differentiate yourself and protect your intellectual property, believe in your vision and be driven by passion. Approach challenges as opportunities to learn. For example, when COVID-19 hit, it impacted our initial use case, so we accelerated our product vision and introduced features we’d planned to add much later on. The result is PerformLive.

JD: What’s coming up next for your company? What big milestones are on the horizon?
OS: On February 15, 2021, we are launching PerformLive, the evolution of ROAR. We are going to beta test it with 100 or so customers, then scale it for viral growth over the next 12 months. Those interested in trying the platform can join our exclusive waitlist here.

JD: What advice do you have for early-stage founders?
OS: Listen to feedback from customers, markets and investors, but stay true to your beliefs, and iterate and pivot if you have to. Stay lean and mean as a company — move fast, but keep expenses as modest as possible. Don’t give up even if it gets hard. Focus on traction and key performance indicators. You can’t be shy — instead, be bold and passionate. Passion is everything to me.

JD: Tell us about your experience with Golden Seeds. How has the Golden Seeds network been helpful to you?
OS: Our experience with Golden Seeds has been incredible. We get so much support, personalized attention and advice that it feels like we’re working with family and friends who want to support us. This was our first official fundraise, and I’m happy Golden Seeds is our lead investor. We learned a lot from them. We iterated our pitch, strengthened our financial model, made great connections and gotten better along the way. The Golden Seeds network of women supporting women just blew me away.

For more wisdom like this from other incredible female leaders, read more on Golden Seeds’ blog.

Taking stock of the new world

Life today seems to be in a constant state of flux, but in 2020, the pace of change increased dramatically. COVID-19 and the resulting shutdowns and restrictions have accelerated trends that were slowly reshaping the way we live and work.

Consumers have new priorities and preferences, and businesses are reimagining everything from their products and services to the systems they use, the way they interact with their customers and their goals.

Though industries such as travel, hospitality, retail and food service have been hit hard by the pandemic, other sectors are thriving. Companies in both camps are weathering the storm by adapting to the new realities. Some of the innovations are likely to stay with us even after the pandemic ends. Contactless delivery, online conferencing, remote learning and telehealth have become part of the everyday routine for many consumers.

Here’s a look at some of Golden Seeds’ observations of the changes reshaping key business sectors and the impact they’re likely to have in the future.

New ways to dine

COVID-19 has caused major disruption in the restaurant business and overhauled the way Americans eat and cook. Some of these changes may disappear after the pandemic ends, but others are likely to become part of the new landscape.

Many people sharply curtailed dining out last spring; in fact, 45% of respondents in one survey said it was one of their biggest budget cuts. Some have since returned–especially to restaurants with outdoor seating—and polls show that safety and sanitation have become diners’ top priority. Three out of four consumers surveyed said cleanliness would continue to be more important to them in the future.

The desire to minimize personal interaction and touch points has popularized contactless ordering and deliveries, another development that may have lasting impact. Consumers prefer to order meals at a drive-through window or by phone, online or through an app, followed by contactless delivery or curbside pickup. They’re also opting for contactless options such as Apple Pay and Google Pay.

Americans have also embraced home cooking and baking. They’re not necessarily sticking with comfort foods but experimenting with new cuisines. To keep pantries stocked, they’re having groceries delivered, and when they do visit grocery stores — among the retail establishments where they feel most comfortable — they go off-hours to avoid crowds.

Other trends likely to persist include greater interest in tamper-proof and single-serve packaging, a preference for local and U.S. food sources, and a desire for greater transparency in the supply chain.

Though restaurants unquestionably face many challenges, the situation may not be as bleak as news coverage suggests. Industry experts are optimistic that the industry will bounce back, though it won’t look exactly the same. One encouraging sign is the fact that restaurants are continuing to lead the way in food and beverage innovation. And once conditions stabilize, consumers are likely to return to restaurants because the experience satisfies so much more than the simple need to eat.

Read more about how the pandemic is transforming the restaurant industry in this blog written by Marie Molde, a registered dietitian and food industry expert, who was a featured speaker last year at a Golden Seeds Trend Talk.

Retailers revamp

Another Golden Seeds Trend Talk featured Deborah Weinswig, CEO and Founder of Coresight Research, a leading retail and technology research firm, at which she explored “How, and when, will the world go shopping again?” Below are some of the highlights.

The new world of retailing looks a lot different than the old one. Mandated shutdowns and a sharp upturn in online shopping have taken a huge toll on brick-and-mortar stores. Some projections show as many as 25,000 stores went out of business in 2020. The survivors are overhauling their offerings and operations, resulting in more innovation in the retail industry in a few months than there’s been in the previous 10 years.

The move to online shopping has been the biggest game-changer. With all but essential stores required to close and consumers sheltering at home, buying has shifted to online, where much of it may remain now that shoppers have grown accustomed to the convenience.

Retailers have been forced to optimize their supply chain inventory, revamp their merchandise mix and forecast demand in an uncertain, fast-changing market. Unable to travel to suppliers and in-person markets, retailers are relying on technology and virtual showrooms to help them stay on top of fashion trends.

The shopping experience itself has evolved, and shoppers may find a different and leaner assortment of goods. Retailers have reconfigured their calendars for apparel and footwear, downplayed seasonality and fine-tuned their offerings to tighten up on inventory. Stores now display items on the floor but sell fresh, packaged items from the backroom.

Customer interactions with sales associates are becoming more personalized. With fitting rooms closed, some stores are offering “virtual try-ons.” Shoppers are likely to find specialty brand retailers based within department stores, and could be receiving more digital and social media outreach from retailers as well.

It’s likely there’ll be more shutdowns, acquisitions and consolidations in the retail industry, and online shopping will remain a major factor. But brick-and-mortar stores aren’t going away. Many are trying to win wary shoppers back with curbside or drive-through pickup and contactless delivery and payment.

Many shoppers want to see and touch products and take them home right away. In-person shopping will continue, but stores won’t look the same, and consumers will find a new shopping experience.

Healthcare goes high-tech online

The COVID-19 pandemic has dramatically accelerated a major shift in health care that has been under way for years, pushing new technology and innovative practices to the forefront.

This topic was explored in another Golden Seeds Trend Talk with Dr. Laura Forese, Executive Vice President and COO of New York-Presbyterian.

According to Dr. Forese, the rise of telemedicine is one of the most significant changes. With healthcare facilities overburdened and rising concern about the risk of in-person contact, virtual visits have become a popular alternative. Doctors and patients routinely meet in video conferences conducted over the Internet. Both clinicians and consumers have become more comfortable with telemedicine, which has proven not only to be safer, but also cost-effective, timesaving and convenient. That trend is likely to continue.

Technology is coming into play in other ways as well. Devices that communicate with hospital systems electronically enable doctors to monitor patients at home, providing accurate data that can guide treatment.

Artificial intelligence, too, will continue to play a growing role in medicine in the years ahead. Smart devices and machine learning can enable a layperson to take sophisticated measurements that normally require trained experts.

Looking for positive change

There’s no question that these are uncertain and challenging times. But society is resilient, and we’ve come through many crises in the past and emerged stronger and better. We’re seeing that now. The innovation taking place on many fronts holds promise for a brighter tomorrow.

Learn more about the work of Golden Seeds and how we propel women entrepreneurs.

How Did She Do It? A Q&A with Lisa Xu, CEO of NopSec

Lisa Xu, CEO of NopSec

With cyberthreats proliferating, security is a top priority for all businesses. NopSec is committed to helping enterprises respond quickly to today’s threats and to prepare for tomorrow’s. The company, headed by CEO Lisa Xu, uses a software-as-a-service (SaaS) model to help customers simplify workflows, analyze and prioritize security vulnerability risks, and remediate them quickly and effectively. Lisa recently discussed with Deb Kemper of Golden Seeds the reasons she started the company, challenges she encountered and strategies that have powered its growth.

DK: Tell us about the origins of NopSec.
LX:
We started as an offense-focused security company, helping businesses identify security holes and weaknesses from an offensive attacker’s view. Customers loved us and asked if we could put our intelligence “in a box” so they could reference our unique capabilities whenever they needed them.  As a result, we built a cloud-based SaaS product that combines data analytics using machine learning with augmented offensive security. It helps customers prioritize threats and vulnerabilities and then remediate the most important weaknesses.

DK: What market need are you solving, and how is your approach different from how others have addressed this need?
LX:
There are a lot of security tools generating tons of data, but it’s hard to separate meaningful information from all the noise. There is a gap from technical risk reduction to a business risk conversation.  A company can have someone gather data, enter it into giant spreadsheets and present the results in various charts, but that takes about 20 hours a month and it isn’t scalable. Deriving intelligence and insights from all that data is very difficult. You need to know where the vulnerabilities reside in order to determine the priority and decide how you’ll handle remediation and allocate resources. It’s also challenging to align teams from across the company—infrastructure, security, app development—to collaborate and focus on the right thing. Finally, how do you articulate the risk reduction to both technical and nontechnical stakeholders?

NopSec translates technical weaknesses and difficulties into a business risk language that’s easily digestible by nontechnical stakeholders such as the CEO and CFO. We show customers how they’re reducing risk and improving their security posture, as well as reducing the workload, saving time and cutting costs. This gives them a better story to present to the Board. Cybersecurity is a differentiator when companies bid new RFPs. Having a robust security program can help them win new business.

We offer a more automated intelligent approach that leverages our expertise as offensive security experts on top of machine learning. Our flagship product, Unified VRM, ingests data automatically and uses prioritization algorithms to focus on the most important areas, then delivers actionable metrics and reporting in a meaningful way from a business perspective. NopSec Unified VRM integrates with the customer’s ecosystem, using the tools they already have for detection, reporting or ticketing. The end goal is to highlight all the issues and rank them in a dashboard so companies can focus on the most detrimental weaknesses and prioritize the most impactful options to address them.

DK: What challenges have you encountered along the way? How have you overcome them?
LX:
There’s been no shortage of challenges! We’ve had to tackle everything from acquiring customers to building the product, growing the business and scaling the team. We had to pivot from a service model focused on satisfying customers to a growth model focused on subscriptions, creating a scalable enterprise to build the business. That’s not an easy shift. What keeps us going is that we never give up. It’s all about identifying the nature of the problem– is it strategic, directional or design? Does it require resources and capital or is execution the issue? Once the root cause is determined, you continue to iterate until it’s solved.

DK: What effect has COVID had on your business?
LX: Like many companies, we’ve had no employees in the office since March, so we’ve had to embrace going virtual and operating remotely. Our staff members, who are very widely dispersed, save commuting time and have a better work/life balance as a result. We’ve broadened our talent pipeline and hired new people, some we’ve never met in person. At the beginning of the pandemic, everyone was overworked, so we emphasized the importance of self-care. I’m happy to report that our team has managed to survive very well during this time.

DK: Any tools that have helped you stay connected or things you have done to help onboard remote workers?
LX:
Everything we use is cloud-based so it works everywhere. We’re big on Slack because everyone has adopted it both for business and personal use. We also use Zoom and email for onboarding new employees and Zendesk for ticketing.

To help new employees, we define the process and training material before we get them on board. We give them a weekly NopSec onboarding program, and we have regular check-ins—first daily, then weekly and biweekly. Building an infrastructure and training collateral helps expedite the process. To stay connected, we have a virtual happy hour on Fridays, which gives everyone a chance to socialize.

DK: What advice do you have for early-stage founders about raising money, growing a team, fostering company culture or other issues you’ve had to address?
LX:
People are always the #1 asset. You have to attract talent and work as a team to achieve your goal collectively. Without our people, we wouldn’t have a product or customers. You also have to be purposeful and intentional about company culture. We believe in transparency, because everyone is entitled to know what’s going on with the business. If our employees see a problem or have an opinion, we want to hear about it. The worst thing is when everyone knows there’s a problem but nobody talks about it.  We’ve made a conscious effort to ask people to step up and share their views on how and where we can improve.

DK: What’s coming up next for your company? Any big milestones on the horizon?
LX:
We’re getting more traction with customers, including enterprise-grade clients. On the product side, we never stop innovating. We’re always releasing new modules and capabilities, which is a great way to upsell our product, expanding horizontally as well as vertically to offer customers additional products. We are always actively working to engage with potential customers and future funders.

This is an exciting time for us, and it’s a great opportunity for SaaS-based companies to scale. We’ve more than doubled in size, both on the team and customer fronts. We understand our customers’ pain points and deliver a solution that truly solves their problems. They listen to us and keep coming back; we have an amazing renewal rate of 99%.

DK: Tell us about your experience with Golden Seeds. How has the Golden Seeds network been helpful to you?
LX: The networking has been invaluable. We really engage with the investors and they leverage their networks to help us grow. One investor has been especially active in working their contacts and introducing us to the right executives in enterprise-grade organizations. On a strategic level, Golden Seeds has always challenged us to think about things differently. We touch base every few weeks. There’s a regular cadence of engagement and not just four check-ins a year at board meetings. Golden Seeds wants to know what’s happening with our business, what problems we are encountering and how they can help.

For more wisdom like this from other incredible female leaders, read more on Golden Seeds’ blog.

Using technology to safely re-open businesses in a COVID world

Caryn Seidman-Becker, co-founder, chairman and CEO of CLEAR

As the world grapples with COVID-19, businesses are anxious to get employees back to the office safely. CLEAR, a company that uses biometrics to speed travelers through TSA checkpoints, has a new solution: Health Pass. Caryn Seidman-Becker, co-founder, chairman and CEO of CLEAR, recently told Golden Seeds how Health Pass can help create a safer working environment that gives employers and employees peace of mind. Caryn launched CLEAR with Co-founder Ken Cornick in 2010, following a career in asset management. She recently spoke with Linda Yarden, Managing Director of Golden Seeds. Linda’s experience includes 14 years at Goldman Sachs and 10 years at Lehman Brothers. This is one in a series of Golden Seeds Trend Talks focusing on topics that are relevant, instructive and inspiring.

Linda Yarden: CLEAR has been a game-changer, enabling its more than 5 million members to glide through security at 60-plus airports, stadiums and other venues nationwide. How did you come up with the idea for the company?

Caryn Seidman-Becker: When we started our business more than 10 years ago, my partner Ken and I wanted to make the world a better place. We believed that biometrics could change the way people live, work and travel. 9/11 permanently changed the way people think about security, and in response, we launched CLEAR. It enables people to use biometrics rather than ID cards, tickets or other documents to clear security or gain entrance to a venue. They register their irises and fingerprints with us and we transform their unique biometrics into an encrypted code that provides touchless ID.

Linda Yarden: How do you protect the privacy and security of your customers?

Caryn Seidman-Becker: Privacy and data security have been essential to our business and our culture since day one. Our business is built on trust. The very first email I sent out in 2010 said: “We will guard your privacy.” We don’t sell or share data, and we have massive security infrastructure on the back end with a customer-centric front end. We’ve been certified by the government as providing the highest level of cybersecurity.

Linda Yarden: How did this journey lead to Health Pass?

Linda Yarden, Managing Director of Golden Seeds

Caryn Seidman-Becker: We’d started expanding into sports, entertainment and healthcare before March, then COVID-19 hit. Much like 9/11, it transformed the way we live. Travel plummeted, and offices and businesses all shut down. People began working at home, avoiding public places, wearing masks and socially distancing. Health insights such as temperature, test results and antigen levels started to matter more, and nobody wanted to touch anything in a public place. We saw an opportunity to be part of the solution. We started up internal groups to use our existing biometric technologies to help businesses and society re-open safely. In June, we rolled out Health Pass, and we powered the National Hockey League bubble.

Linda Yarden: Are there other applications for Health Pass?

Caryn Seidman-Becker: We’re looking at a number of potential markets where ID, health, payments and ticketing come together—closed-loop environments like cruise ships or stadiums. If consumers don’t have a safe and effective way to patronize these venues, they’ll stay home. We’re also talking, on a pro bono basis, to religious institutions and schools, which we think are vital to communities.

Linda Yarden: Do you see any silver linings in the current environment?

Caryn Seidman-Becker: I think many of us are taking stock of our lives, spending more time with family and refocusing our priorities. I hope we’ll have more appreciation in the future for having the freedom to travel and visit friends and go to concerts and games.

The pandemic forced people to try things like Zoom and Instacart and telemedicine, and some of those things will stick. They can be useful in rural areas or for people who don’t drive, for example. I’m not a fan of 100% remote work forever, because I think the workplace sparks creative combustion and lets young people learn from more experienced colleagues. But I do see advantages in a mix of remote and in-office work.

Linda Yarden: As a woman in business, do you face special challenges?

Caryn Seidman-Becker: I didn’t feel singled out as a woman on Wall Street, which is a great meritocracy that’s all about hustle and getting results. When I first started with CLEAR and visited TSA, I got the sense that everyone looked at me and wondered: What does this girl know? My reaction was: “I will outwork and outthink you. I am here to win.”

In the end it doesn’t matter who you are or where you come from—only how you’re going to get where you need to. I’ve seen successful companies run by people from all different backgrounds who overcame every obstacle and every doubter, and they made me believe that anyone can do anything.

Linda Yarden: What advice do you have for other entrepreneurs?

Caryn Seidman-Becker: In any business, people matter a tremendous amount. Surround yourself with people who are intellectually curious and tireless. Ask what drives them. That’s my favorite question. And show leadership. I don’t believe you can make every decision by committee. Leadership requires you to make hard and fast decisions, often with imperfect data.

Learn more about CLEAR on the company’s website.

Read more of our Golden Seeds blogs for relevant, instructive and inspiring insights.

Stories you loved: Our most popular blogs of 2020

This past year has been anything but uneventful. Covid-19 has upended our normal routines, exacerbating existing problems and creating new ones. While many businesses have suffered, some have thrived during this difficult time.

Over the past year, our blogs have addressed a broad range of issues, from helping businesses survive the pandemic to ensuring equitable funding for minority entrepreneurs. And as always, we’ve reported on many of our promising investments.

Here’s a look at five of the many blogs that resonated with our readers in 2020.

Boards step up in a turbulent economy

With society and the economy in turmoil, many companies are facing major challenges and CEOs must make tough decisions. They’re counting on the board of directors for help, but it’s far from “business as usual” in a world transformed by the pandemic.

The partnership between CEOs and board members is always important, particularly at a time when rapid change is the new norm, feedback loops are accelerated and urgent decisions must be made. Many boards are holding meetings more frequently – and sometimes less formally – and board members’ responsibilities have grown and changed.

Some ways board members are expanding their role, include:

  • Helping businesses identify and address growing risks such as potential supply chain disruption, cybercrime, credit risks and more.
  • Assisting CEOs in preparing for a range of scenarios, from best case to worst.
  • Urging transparency and regular communication with stakeholders.

Written by Deb Kemper and Kathryn Swintek, Managing Partners of Golden Seeds Funds, this blog offers advice about how boards can help ensure the survival and health of the companies they serve.

Our reflection on racial equality, access to capital

Founded in 2005 with the mission of gender diversity and inclusion, Golden Seeds has funded 200 women-led companies. While we’re proud of the progress made to date, we are still humbled by the challenges of achieving real parity for female entrepreneurs, especially black female founders.

Even after all this time, more than 85% of venture capital still goes to all-male teams, with only a tiny fraction of the remaining 15% going to black women founders.

In this blog, we talk about expanding our efforts to create conditions that foster the likelihood of funding and the support of more diverse entrepreneurs.

A principal goal of Golden Seeds is to create an environment in which women entrepreneurs are welcomed, seriously considered for funding, treated respectfully and benefit from constructive feedback. Similarly, we endeavor to create an environment for angel investors that is inclusive and productive. We must ensure our environment is equally welcoming for entrepreneurs and investors of color.

We acknowledge we are not where we should, nor want to be, and we are committed to continuing our work to improve.

Tackling the challenges of Alzheimer’s disease

Many of us, sadly, have firsthand knowledge of the devastation wrought by Alzheimer’s disease. The statistics are staggering:

  • There are more than 16 million cases worldwide, including 6 million in the U.S.
  • The disease costs the U.S. $244 billion a year in direct expenses, plus even more in indirect costs.
  • Experts say this one disease, alone, could bankrupt Medicare.

Cognition Therapeutics, a clinical-stage drug development company focused on the protection and restoration of synaptic function in Alzheimer’s disease and other neurodegenerative disorders, continued to make progress in the development of a treatment for Alzheimer’s disease. In fact, the company received a $75.8M grant for a trial of a promising, and unique, new treatment called CT1812.

The National Institute on Aging (NIA) of the National Institutes of Health (NIH) awarded the grant for the trial, which will be conducted over five years at 35 leading academic sites with expertise in Alzheimer’s clinical trials. Early tests have already yielded some very exciting findings that suggest it can help with Alzheimer’s and also be used to treat other diseases.

This blog post, written by Peggy Wallace, Managing Partner, Golden Seeds and member of the Board of Directors of Cognition Therapeutics, features an interview with Cognition Therapeutics’ Co-Founder and Chief Science Officer Dr. Susan Catalano, and CEO Lisa Ricciardi.

Doing good while doing well

Conventional wisdom says you can’t make money investing with your conscience, but a promising company called CNote intends to do just that – deliver competitive returns with 100% positive social impact.

This blog, from our “How Did She Do It” series, features CNote CEO and co-founder Catherine Berman, and is written by Gwen Edwards, Managing Director of Golden Seeds. Catherine left a high-level corporate job to launch an investment platform that harnesses finance as an instrument for social change.

CNote is enabling investors to align their portfolios with their values by offering individuals and institutions fixed-income opportunities that support Main Street America. Among its strategies:

  • Provide small business loans for female and minority entrepreneurs.
  • Drive more capital into underfunded communities, which are suffering disproportionately in this crisis.
  • Offer customized investments around themes such as gender equality, immigration and the environment.

If you’d like to make your money work for the greater good, while doing well as an investor, this blog is a must read.

Harnessing technology to aid entrepreneurs

Another popular blog addressed the difficulties facing women, minorities and veterans striving to build businesses. Hello Alice, founded by Carolyn Rodz and Elizabeth Gore, aims to give them access to the funding, opportunities and connections they need to thrive from day one.

Named after the character Alice from “Alice in Wonderland,” (who, like many entrepreneurs, “believed as many as six impossible things before breakfast”) Hello Alice is making the business ecosystem more inclusive and accessible.

Here’s a quick overview of how this free digital platform works:

  • It develops a unique profile based on user input.
  • It then uses artificial intelligence to build machine-learning algorithms and decision trees that present personalized recommendations specific to that user.

It’s encouraging to know there are such efforts underway to make the business ecosystem more inclusive of companies owned by women, people of color, the LGBTQ+ community, military veterans and those with disabilities. Give this “How Did She Do It” blog, written by Gwen Edwards, Managing Director of Golden Seeds, a read.

These are just five of the many blogs we’ve posted this year. We found these stories inspiring and hope you’ll check out these and other blogs highlighting the work of Golden Seeds and many of our companies.

Learn more about the work of Golden Seeds and how we propel women entrepreneurs.

World Economic Forum honors three Golden Seeds companies: Cadenza Innovation, otto by DEVCON and Kalion

We’re pleased to announce that a major international organization, The World Economic Forum, has recognized three Golden Seeds companies for their impact on society, validating the vision that drives our organization: supporting women entrepreneurs who can change the world.

There are many ways to acknowledge outstanding women entrepreneurs including last month’s Global Entrepreneurship Week and Women’s Entrepreneurship Day. However, few companies have the honor of being recognized as global transformers by the World Economic Forum. We’re extremely proud to have three companies we have invested in receiving such high distinctions.

The World Economic Forum has honored two Golden Seeds companies as Technology Pioneers that are shaping the future through the design, development and deployment of new technologies such as artificial intelligence, robotics, biotechnology and more: Cadenza Innovation in 2018 and otto by DEVCON in 2020.

For Cadenza’s founder and CEO, Dr. Christina Lampe-Onnerud, it’s the second time since 2010 that she and her same founding team have earned the prestigious award, and it is believed to be the only group to achieve that distinction. Long active in the Forum, she most recently served as chair for its Global Future Council on Energy Technologies.

Pioneers are early- to growth-stage companies chosen from a field of hundreds of candidates. The Technology Pioneers community is an integral part of the larger Global Innovators community of startups at the World Economic Forum.

“These pioneers are developing cutting-edge technologies all over the world,” said Susan Nesbitt, who heads the Global Innovators Community for the World Economic Forum. “Beyond their innovations, these firms are contributing greatly to improving the state of the world.”

In addition, the Forum singled out a third Golden Seeds company, Kalion, adding its chief scientist and cofounder Professor Kristala Jones Prather to the Global Future Council on Synthetic Biology. This field combines biology, engineering and technology to transform industries and overcome global challenges.

“Synthetic biology makes it possible to design the building blocks of life,” the Forum said. “This ability promises to revolutionize economies and societies, particularly with regards to the production of energy and medicine.”

Golden Seeds is proud to support these three outstanding women-led companies who are working on solving some of the biggest challenges of our time.

Cadenza Innovation: Shaping the Fourth Industrial Revolution

Dr. Christina Lampe-Onnerud, founder and CEO of Cadenza Innovation

Established in 2012 by a team of lithium-ion (Li-ion) battery experts led by Lampe-Onnerud, Cadenza Innovation has developed a safe, low-cost, high-performance battery technology platform for license to global manufacturers. The company’s patented supercell serves as the cornerstone of its novel architecture and provides unparalleled simplification in battery pack design. That, in turn, substantially reduces production and manufacturing costs, overcomes safety issues and improves energy density.

As Lampe-Onnerud explained in an interview with Golden Seeds, the product is initially targeting the utility/grid storage and electric vehicle markets. It has enormous potential beyond that, too. “It will open a new manufacturing paradigm for players that make other mass-produced devices,” she added.

With nearly three decades of experience in the global battery industry, Cadenza’s founder expressed appreciation for the World Economic Forum’s unwavering commitment to facilitating access to lower-cost, abundantly available, environmentally sustainable energy to combat climate change.

Otto by DEVCON: Democratizing security

Maggie Louie, CEO and co-founder of Otto by DEVCON

Otto by DEVCON is an Atlanta, Ga-based software company that protects companies and consumers from online threats through automating (otto~mating) and democratizing web security. Founded in 2017, otto by DEVCON is a global innovator in JavaScript Security Software and DevSecOps tools, for managing real-time runtime application security. Its no-code to low-code software integration is transforming security paradigms. Founder and CEO Maggie Louie explained the company’s mission: “We know the only way that security can keep pace with innovation is to make it ubiquitous. Democratize it­ – make security for everyone: fast, easy and accessible. In the new world of COVID-19 and remote everything ­– work, eLearning, meals, shopping ­– online threats will only continue to grow. By providing consumers with free protection and developers with free tools, we are able to use this virtuous cycle to rapidly advance our threat intelligence for commercial use across all industries. Closing these online security gaps ‘in-browser’ is essential to hardening the security of the web and disrupting the business models of crime.”

The World Economic Forum’s selection of otto by DEVCON as a 2020 Technology Pioneer validates the importance of the company’s mission to protect modern freedom in our ever-connected world, which it called one of the most important challenges facing society, globally.

In an interview, Louie told Golden Seeds that more than 75% of all websites have JavaScript flaws opening up risk and vulnerabilities. These security gaps can lead to attacks that steal credit card information, login credentials, install trojans and inject malicious code. The average cost to a single company for a single data breach is $3.9M. Five billion records were compromised in 2019, costing U.S. organizations more than $1.2 trillion from data breaches alone. The first quarter of 2020 has been one of the worst in data breach history, with over 8 billion records exposed.

Kalion: Promoting “green” chemistry

Professor Kristala Jones Prather, Ph.D., Chief Scientist and Co-founder of Kalion

In 2011, Kalion was founded to create biologically friendly compounds for industrial use. This industrial biotech company produces a compound called glucaric acid, which offers the possibility of replacing environmentally polluting chemicals with a biodegradable, nontoxic, sugar-derived product. It can be used not only in pharmaceuticals and energy drinks, which are the current markets, but also for other products due to its varied enhancement properties from improving corrosion destruction, fabric strength and coating adherence properties, to name just a few.

Kristala Jones Prather, chief scientist and cofounder of Kalion, explained: “The enzymes that biological organisms use for chemistry are much more selective, allowing for a vastly superior purity of our final products. Higher-purity molecules generate less waste during your production process and greater value in your final products because of the superior performance from the highest quality polymers.”

One of the biggest challenges was educating investors about the potential in glucaric acid and its marketability. Her experience with Golden Seeds was a refreshing change. “When we sat down with Golden Seeds, in walked a team member with one of my papers,” Prather recalled in an interview. “She had a background in biology, had researched the science and was excited to learn more. That’s my experience with Golden Seeds—they’re interested.”

Golden Seeds celebrates these innovators and is proud that the World Economic Forum has recognized these companies as global players in their fields.

Read more of our Golden Seeds blogs for relevant, instructive and inspiring insights.

Closing the Funding Gap for Female and Multicultural Entrepreneurs

Carla Harris, Vice Chairman and Managing Director at Morgan Stanley
Carla Harris, Vice Chairman and Managing Director at Morgan Stanley

Funding is critical for new businesses, but female and multicultural entrepreneurs struggle to obtain capital. The vast majority of investment money goes to traditional founders rather than women or people of color. At a recent Golden Seeds Trend Talk, two Golden Seeds members – Carla Harris, Vice Chairman and Managing Director at Morgan Stanley, who heads up the Multicultural Client Strategy Group, and Stephanie Fowler, a 25-year veteran of Sumitomo Mitsui Trust Bank and Founder and Managing Partner of the boutique investment firm Morgan Capital Partners, LLC – discussed the funding gap and solutions to the problem. This is one in a series of Trend Talks focusing on topics that are relevant, instructive and inspiring.

Stephanie Fowler: The disparity in funding for multicultural and women founders wasn’t talked about much when Morgan Stanley asked you to address the problem six years ago. Where did you start?

Carla Harris: In 2014, the chairman of Morgan Stanley James Gorman said no large investment firm on Wall Street had successfully engaged with multicultural constituents, and he wanted to be the leader in that space. It was my job to figure out how to do it. The first thing I did was create an event for senior executives from the African American, Hispanic American, Asian American and Native American communities. It tapped into a real appetite in the market — every year, there’s a waiting list.

The second step was creating the “Access and Opportunity” podcast to elevate the conversation around the inequitable distribution of capital. When you ask people who distribute capital why they don’t have more women or people of color in their portfolios, they say they can’t find anybody. I wanted to put together a playbook to show them how. I also wanted successful entrepreneurs to explain how they got funding so other founders could try those avenues.

Stephanie Fowler: What led to the launch of Morgan Stanley’s Multicultural Innovation Lab, and how has it been working?

Stephanie Fowler
Stephanie Fowler, Founder and Managing Partner of Morgan Capital Partners, LLC

Carla Harris: I participated in an event called Power Moves in 2014, where I met female and multicultural founders of tech companies in education, medical, health care, consumer products and more. I realized that Black and Hispanic businesses combined serve a market with almost $4 trillion in spending power, and as the leading global investment bank, we needed to be playing in that space. Morgan Stanley participated in the Power Moves conference until it was discontinued, then in 2017 set up our own Multicultural Accelerator Lab. We invest in technology and technology-enabled startups with women and multicultural founders and C-suite executives, and our track record proves that we know how to pick winners. Most traditional venture capital firms succeed with only one company out of 10. In our lab, only one out of 10 don’t work out. In fact, it’s been so successful that Morgan Stanley is doubling the size to include 20 companies a year. We’re also increasing the amount of money we can invest in each to $250,000, and we’re offering follow-on investments to companies that are too advanced for the lab.

Stephanie Fowler: Given that the funding gap wasn’t in the forefront at that time, did you encounter challenges to your efforts to address it?

Carla Harris: I give the chairman a lot of credit. He told me his goal and gave me a blank piece of paper to create the vision. Some of the Morgan Stanley people agreed it was the right thing to do but didn’t expect it to make any money. I said, “Hold it right there. If the only reason we do this is because it’s right, there’s a problem. You’ll never get everyone to agree on the right thing to do, which is why we haven’t gotten further with diversity and inclusion in general.”

But business people can agree on the commercial thing to do, so this has to be commercially relevant. An investment bank’s super-power is taking capital from people who have it and giving it to people who need it — not because we like them and want to help them, but because it’s a commercial imperative for us. There has to be an equilibrium, so both sides get something out of the deal. With that mindset, you’ll have different people on your investment committee and different objectives. So that’s what we drove toward.

Stephanie Fowler: Tell us about “The Trillion-Dollar Blind Spot,” a whitepaper that detailed the reasons for the funding gap, its economic impact and actions to achieve more equitable funding in the future. How did your experiences with the lab influence it?

Carla Harris: “The Trillion-Dollar Blind Spot” gave us real data to put out there. If everything is anecdotal, it becomes an excuse for people not to embrace it. The fact that the companies in our lab were so successful time after time proved it wasn’t an anomaly. That’s because we treated the lab as we would any fund and put together the right investment criteria. We learned that you have to insert yourself into the ecosystem so you become a trusted partner. My research showed that many female entrepreneurs who were turned down by other accelerators didn’t go back because the experience was so horrible. It was important to us that we position ourselves as a safe space. So we committed to doing more than just giving these companies money; we would invest our time and expertise in them. That’s the message we want to get out to other VCs. If you really want to find multicultural and women founders, this is how you have to show up in the marketplace.

Stephanie Fowler: What do you recommend to VCs who want to invest in diverse companies but say they can’t find them?

Carla Harris: The first thing is to make sure you have diversity on your investment committee. Many of the VCs we’ve spoken to don’t have any women or people of color on their committees. The second is to access the network and connections people have within diverse communities. The third thing—and the most profound, in some ways—is to rethink your definition of expansion risk.

All VCs set aside a percentage of their portfolio for investments outside their core competencies, for things they have no experience or expertise in. Take cloud computing and ride-share services, for example. They were unfamiliar ideas 20 years ago, but now they’re huge vertical industries, and early investors are reaping the rewards. We’re urging investors to put women and multicultural businesses under the risk expansion umbrella. You might not know about these spaces but put down a marker and see how things evolve. The hair-weaving industry is an example. Traditional investors don’t know anything about it, but artificial hair is a multibillion-dollar market. Categorizing something like this as risk expansion gives VCs a comfortable, familiar way to invest in businesses owned by women and people of color.

Another message we’re trying to get across is that there are extraordinary yield opportunities in investing in a female or multicultural founder. It takes tremendous grit and resilience for them just to get in front of a VC’s desk. That proves they can get things done, so an investment in their company has already been significantly derisked.

Stephanie Fowler: What advice do you have for female and multicultural entrepreneurs interacting with potential investors?

Carla Harris: Traditionally, a woman or person of color faces difficult obstacles, like prejudices or stereotypes, others often don’t face. You need to underscore your expertise, show how conversant you are about the industry and your competition—why you’re better than anyone else out there. Answer every question and try not to get emotional about questions that are microaggressions. Just jump right over them.

Learn more about Carla Harris here. Learn about the Morgan Stanley Multicultural Innovation Lab here.

Learn more about the work of Golden Seeds and how we propel women entrepreneurs.