Interview with Kathryn Cartini, Co-Founder and Partner, Chloe Capital

Chloe Capital invests in companies that have 20% or more ownership by female entrepreneurs. Half of the fund is dedicated to female entrepreneurs of color.

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Guest - Kathryn Cartini
Host - Carl Grant
Producer - Seth Grant

Transcript

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Carl Grant: 0:12

Welcome to Rainmakers. I'm here with Kathryn Cartini, founder and partner of Chloe capital. Welcome, Kate.

Kathryn Cartini: 0:20

Thanks so much for having me, Carl.

Carl Grant: 0:22

So Kate and I have known each other for a while now, I don't know how many years it's been, but we got to know each other when you were wearing one of your many hats. You wear a lot of hats, and we can talk about that you were the marketing person for Upstate venture connects, I believe when we met, and you were up there large and uncharged speaking on the podium. And and then we became friends as coolie sponsored that event. And then you've done all sorts of entrepreneurial things since then. And let's talk about some of them.

Kathryn Cartini: 0:55

Yes, absolutely. So you're right, I was with upstate venture Connect, working with the founder of trying out Martin babic. And was is my honor, I had left upstate New York and pursued my career in journalism, and then became a marketer, and opened up a little marketing firm. So when a family member fell, ill and I moved back home to upstate New York, I connected with Martin, and he had just had a successful IPO with his company. And he wanted to create a connected ecosystem in upstate New York that was similar to what he was seeing in Silicon Valley. And recognizing that I had that marketing experience and sales experience, he tapped me on the shoulder to assist him and growing upstate venture Connect, which is really just about connecting entrepreneurs to the resources they need to grow businesses, like trying to in upstate New York, and therefore create a bunch of jobs and make sure that all of the students that we graduate from our upstate New York universities don't have to leave us, they can stay right here and prosper.

Carl Grant: 2:01

And he did a great job with that I'm friends with him as well, knowing him back to when he first got the company started, believe it or not. And so he was our common connection there. And then you've gone off and let's talk about your current role. Four and a half years, you've been developing Chloe capital, this is a women focused venture fund. Yes. And these things are not easy to do. I did a small fund, while back. And I know how hard it is. So talk about the challenges and the relationships you've had to develop to do this.

Kathryn Cartini: 2:34

Yeah. So you're right. It's It's not an easy task for certain. But here is what I learned from my time at Upstate venture Connect, it really is all about relationships and business development. And no one does that better than you, Carl. So when we set out to create a movement to invest in women, all of our mentors said, it's not going to be easy, it's going to be expensive, it's going to be a long journey, etc, etc. And we took it on the chin, and we said, but if we can just get five people to support us, and then those five people told five more people and etc, etc, then we might have a shot at this. And that's exactly what we did. We started about four or five years ago. And it really was just a program to teach women how to invest. And we went to the Mohawk Mountain House, and it was just a beautiful retreat. And alongside us, we invited experts in the industry from portfolio and Ostia angels in Golden seeds. And we said, Please teach us what you know. And then we invited five women LED technology companies into the experience so they could learn alongside the investors. And at the end of the day, we ended up making an investment, and a woman from Ann Arbor, Michigan, who is a mother of five, and she had actually had her baby or fifth baby during the due diligence process. So she brought Lucy to the event. Still breastfeeding was breastfeeding in the back of the room when we announced her as the recipient of our first investment. And you know, what is a mom, CEO to do, but she just threw the blanket over Lucy. And you can see in the pictures, Lucy's little feet sticking out from underneath the blanket. And at that time, Elisa and I looked at each other and several members in the room said, you know, ladies, this is more than what you think it is, and what do you need to bring this experience to our city? And we looked at each other and we said, You know what, well, we need to raise more money. We need to have sponsors to go on tour. We certainly need to be connected with more amazing women like Kim gammas from meet bettino to invest in and they said, done, done and done. So you see Carl, that was the movement just sparking itself and it was all about getting some amazing people in the room. That I wanted to support what we were doing, and they wanted us to succeed.

Carl Grant: 5:05

That's great. So, I was surprised to learn when you and I caught up recently that you have not just fun focused on women, but half of your fund is focused on minority women.

Kathryn Cartini: 5:15

Yeah.

Carl Grant: 5:16

Talk a little bit about that.

Kathryn Cartini: 5:17

Yeah, absolutely. So uh, you know, again, this has been about four and a half, five years now. And our investment thesis, or shall I say our impact thesis is to invest in women LED technology companies. And that means at least one person who identifies as a female owning 20% of the company. So sorry, guys that emailed me on LinkedIn that say, I'm married, and my wife owns 50% of what I own, that is true. But in our case, that does not qualify it, you need to have 20% on the cap table. But in addition to that, we are recognizing through not only studies out there from pitchbook, and Cambridge associates, but now our own portfolio, that women LED technology companies with diverse leadership teams are performing better, they're generating more revenue, they're exiting a little bit faster, they're producing greater returns for investors. So not only is our impact thesis, the right thing to do, it's good business. And we now are, we have always said, wouldn't it be wonderful if we could really go out there and find amazing champions, and those champions, when we look back, we're 50% people of color. So we had it as an intention. And we are very pleased to have made that intention come to life. And now with the support of some amazing investors and the successful second close of our impact fund, we can really go out there and put that intention to good use. And we can be truly searching for bipac founders.

Carl Grant: 6:56

So what most people listening to this, don't realize they think of the venture fund business as glamorous, glorious business where you invest money. But you also have to raise money. That's the really hard part of this business. And so when you have a focus like that, where you're focusing on women and half minority women, what kind of limited partner base Do you raise from and how do you get to them?

Kathryn Cartini: 7:21

Yeah, that is a great point. So for us, even though we in before we started our impact fund, we had already been investing on special purpose vehicles, and already had six investments that were doing very well. So when we opened our $25 million impact fund, we were still considered first time fund managers, and we're women. So as much as people don't want to admit that it is more difficult for a woman or a minority to raise funding, it truly is. So we had a lot stacked against us, Carl, but again, we had developed what other people were calling a movement, and they were all willing to assist us in some way shape, or form, and invest in women to ask me so much more than writing a check again, it's really more about who do you know? And how can I help. So what we are looking for right now, since we are a little too small for institutional capital, is we love to surround ourselves with high net worth individuals or family offices. And we see that the family offices and individuals who come on board with us already have in their line cites the impact mission of their own. And so it's really just about them already aligning with the opportunity to invest in women and people of color. They come on board, and they support us wholeheartedly.

Carl Grant: 8:44

Let's talk about some of the other hats you wear. How many hats Do you wear today?

Kathryn Cartini: 8:49

Oh, I don't know, really, honestly, I'm really just spending time on two on two things, and then just helping others whenever I can. Okay, and so probably is probably the other hat that I'm wearing the most right now. And I gotta tell you, if if founders out there do not know or not embracing crowdfunding Republic has really taken the world by storm. It's a crowdfunding platform that allows you to raise up to $5 million from accredited and non accredited individuals. And they really do a stellar job at handling the marketing that we need in the digital age to get your opportunity in front of the masses.

Carl Grant: 9:27

Talk a little bit about how the crowdfunding process works, because I think relationships being very important in fundraising, people like to get deals referred to them by people they know angels like that. Venture Capitalists like that. Who are these crowdfunders and how do you establish that relationship?

Kathryn Cartini: 9:44

Absolutely. So it is a new dawn of fundraising. You're right. Whereas before when you're just starting out and raising preseed you had to connect with local angels in your town, right? And it was more of an affinity based on where you went to school or, again, who you knew. But mostly geographic with crowdfunding, it's about the experts at Republic performing the due diligence for you, since maybe you might just be dipping your toe into the investing arena, and you need someone to kick tires and learn from them. And then going out there and seeing who, what industry or what product or what service from your experience in business resonates with you. And there's where you're finding the affinity, right? It's like if you know about a certain topic, and you can really see, alright, this solution is really going to go the distance, then you're supporting it based on that, and the in the due diligence is already done for you and wrapped up in a bow, I can say that the marketing certainly plays a strong, a strong card in all of it. And that's why a platform like Republic is so stellar because they are amazing at digital marketing. But people do attract people. And it gives others the confidence to put down a little bit of a bet when they see that so many others have supported the company. So it's kind of like, catches on fire, wildfire is at the is at the same, but it catches on fire, when you see so many people put in little bets on crowdfunding, and then it you know, it all adds together. And then if you're a founder or even an investor, you may say, but no, I don't want all of those investors on my cap table. Well, that's not how it works. It's on a crowd safe. So all of the investors regardless of how small could be $100, you are now all bundled together, and you only see the investment in its entirety in one line on a cap table.

Carl Grant: 11:45

Alright, now I'm going to ask you in off the wall question, but I only because I know this about you, I've walked down the street with you in Saratoga Springs. Yeah, with your dog, you have a Dalmatian. And you know, nobody noticed me. Perhaps they noticed you. But everybody noticed your dog and your dog. I forget the dog's name, but I remember that it has its own Instagram page, or even monetizing it at one point. So how does the dog play into your business development?

Kathryn Cartini: 12:14

Oh, Angie. Alright, so my dirty little secret. My dog son checks ch e x is my best salesperson. Because everyone loves him. You're right. He's striking. He's friendly. And you know, I love living in Saratoga Springs, New York, because we're known for horse racing here. And there are a few months in the summer, particularly, where tons of people come in from all over the world, for the horse races. And walking up and down Broadway is like the equivalent of owning a sandwich shop and being like a sandwich costume. And, you know, we enjoy it, he enjoys it, but it's more than just business. We do a lot of community service where Carl, and you know, we're out there with the fire department in the parades and we're welcoming people to the town alongside the chamber. And he really enjoys it and I really enjoyed giving back because people adore him so much.

Carl Grant: 13:13

That's cute. So you've made some hard decisions regarding you know, developing a family and things like that you're very driven woman but I don't think everybody has to make that decision. You talked about funding the woman with five kids which amazing Yeah, I have five kids and I know what that's like and and you know, I don't know how I don't know how she was building a business and having a fifth kid it just seems nearly impossible but I guess it is possible. So for the young woman listening who's is like wow, you know, I want to I want to do what she does. What advice do you have for her?

Kathryn Cartini: 13:50

That is a har one because it is just so spe ialized. But you know, the adv ce that we got before we sta ted closing capital though it as difficult to swallow it was true. It is very difficult and just like anything, if you are going to go all in and be pas ionate about something that the more yes you say you have to say no to other things. So you kno before you do anything in lif, and it doesn't have to be ven ure it doesn't have to be sta ting a business. It could be rai ing a family, just know that the e are only so many hours in a d y, so many days in a week, so any weeks in a month. And you really have to commit to wha ever in your heart you are pas ionate about and understand tha you just can't do it all You will never be able to do at all there's no such thing as per ect and as much as we all wil try there really is no such thi g as balance in life. If you say yes to one thing, you will hav to say no to something els. And as long as you can be sec re within yourself to know tha the things that you are say ng No two are the things tha you were not the number one mos passionate about and be oka with that. Then in my book, you are doing the right thing you should never have any reg ets.

Carl Grant: 15:12

Katherine Kartini, co founder and partner of Chloe capital. Thank you so much. Great advice. appreciate you joining us.

Kathryn Cartini: 15:19

Thank you Carl.

Carl Grant: 15:21

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