Erika Cramer is a Managing Partner for How Women Invest, a gender lens venture firm investing in tech-enabled startups. She is a 25-year veteran investment banker in the financial services industry having focused on mergers and acquisitions within the asset management, wealth advisory and fintech solution sectors. Over the course of her career, she advised public and private financial services firms on over 52 transactions representing over $240 billion in assets under management in consolidations. She co-founded an investment banking boutique which was acquired by Raymond James Financial. She formed two registered broker dealers and served as Chief Compliance Officer for both entities.
A Latina, she is a diverse, experienced board director active with Prospanica and has served with Atlanta Life Insurance Company, OpenInvest (ESG fintech firm acquired by J.P. Morgan Chase), and Trips for Kids Marin.
Ms. Cramer is an active speaker and mentor for women in finance and leadership; she is a member of How Women Lead, the Athena Alliance, NACD, and 100 Women in Finance. Along with her husband, Ms. Cramer is engaged with their family office. She is the mother of two daughters, an advocate for individuals with intellectual disabilities, and can be found cycling the scenic routes of California and New York. Erika earned an MBA in Finance at Pace University and a Bachelor’s in Finance from West Virginia University.
Where do you find investments?
How Women Invest was birthed from How Women Lead, a professional network of 14,000 (and growing) ethnically diverse members whose mission is to disrupt inequitable systems and elevate women in leadership. Our current (and future) fund(s) are structured uniquely in that we have, and will continue to have, a model to manage a $10 million limited partnership vehicle for up to 249 accredited investors alongside a traditional venture fund for an unlimited number of qualified purchasers. This structure allows us to offer access and low minimums for exposing more women (and men) to the venture ecosystem. For the general partner and management company, it extends our research team to limited partners who generate diverse industry deal flow and subject matter expertise. Our LPs also attend accelerator/pitch events and connect us to other gender lens and industry specific venture firms with whom we collaborate on deal flow and co-invest. One component of the How Women Lead credo is “to be visible.” Our LPs are encouraged to write articles, attend events, and amplify our mission and vision. As such, we generate significant inbound female founder interest.
At what stages do you look to invest?
We ultimately seek to be the “go-to” place for female founders, especially women of color, to receive capital throughout their capital raising journey. Currently Fund I invests in domestic late stage seed, Series A, and, opportunistically, Series B in revenue generating, tech-enabled companies. Fund II is in formation and will be a pure domestic seed stage fund. We envision future funds to invest in later stages.
What types of investments and sectors are of interest, and what is your preferred structure?
We invest in convertible notes, preferred equity, secondaries, and SAFEs. For best opportunities to scale, we invest in US-based tech-enabled companies and don’t invest in companies that require FDA approval. Our current areas of interest include fintech, future of work, healthtech, edtech, femtech and energy infrastructure. Due to the current state of supply chains, we have a slight preference for businesses looking to build B2B over DTC.
Why are you focusing primarily on women and diverse founders?
I call this “the cycle of women and wealth”. Less than 2% of venture capital investments are made in female-founded companies. Part of the reason is because less than 11% of venture capital partners/decision makers are represented by women. The numbers for women of color are only a tiny fraction of those percentages. Women hire 6x more women, pay more equitably and design more diverse board rooms. Furthermore, women are more capital-efficient, generate more revenue per dollar of capital and return more to their investors. Capital allocation to female founded companies decline in growth stages and IPOs. Wealth creation occurs through corporate development and successful liquidity events. Without the foundation of gender lens venture investing, it creates a huge challenge to narrow the wealth gap between men and women. Importantly, female founders often tend to focus on services and solutions that ultimately have positive social, environmental and governance impact. As such, we seek passionate teams in businesses that are positioned with a competitive advantage in a sizeable market opportunity. We are purists in our definition of gender lens and do not invest in companies that have male/female founders. Sadly, we have heard from many female founders that they were told they should bring in a male CEO/partner in order to successfully raise capital.
How are you “Changing the Room?”
How Women Invest is a venture fund disrupting all the norms in venture, with a women-only fund management team, women-majority LP base, and funding women-led startups. Our first fund was oversubscribed in just eight months during the 2020 COVID pandemic, which showed us the significant pent-up demand from women to align their wealth and investments with their values.
Additionally, we’re centering women of color and economic access at our firm, because a simple gender-lens is not enough to truly drive the impact we want to see. As a Latina Managing Partner, I stand in a miniscule minority: in 2017 there were only eight Latina partner-level VCs in all the United States! We’re changing the room and the country. I’m proud to share that at first close of Fund I, 54% of our Fund I LPs identify as Women of Color, and 70% of our LPs identify as first-time investors. Our portfolios are being built with WOC leaders. On more than a few occasions, we are thanked by our LPs for their inclusion and access, and by female founders who are in awe of presenting to an all women deal team.
How Women Lead has a gifting arm that supports women and girls’ organizations solving critical problems in marginalized Bay Area communities. Our funds have designated a portion of profits as a donation to How Women Lead, a 501c3.
Our LP experience, along with the angel investing and board readiness programs conducted through How Women Lead, empower us to invest not only in How Women Invest funds, but directly in private companies and in other funds.