Solo venture capitalist Monique Woodard’s fund, Cake Ventures, seeks to invest in user-focused companies reflected in her “demographic change” theory.
Brendan Mainini
The Black founder-turned-investor will write seed and pre-seed checks, backed by investors including Bank of America and billionaire Melinda French Gates.
In March 2021, Monique Woodard closed part of the first fund of her new venture capital firm, Cake Ventures, and got down to business. Many firms point to technological changes as the lodestar of their portfolios; a smaller but growing number target underrepresented founders who may be overlooked by some of Silicon Valley’s traditional check writers.
Woodard, a veteran of startups and venture capital for two decades, was most interested in new businesses driving demographic change in a handful of very specific areas, three complementary “layers” of a pie: our aging population and longevity mindset; the greater purchasing power of women in society; and the shift to “majority-minority,” as Woodard put it, a “new majority” of technology early adopters from Asian, Black, and Latino backgrounds.
New companies that fit that thesis, according to Woodard, would serve customer bases that reflect those layers. Take Rares, a social investment site that allows for fractional ownership of collectives like sneakers, spanning Black, Latino, and Asian cultural influences; o Most Days, an app to establish healthy routines in areas such as sleep and depression, which is mostly used by women.
“It’s the lens through which I view companies,” Woodard said. Forbes– and a thesis, he claimed, that didn’t quite fit with an existing firm. “Even companies that don’t ‘look like’ demographic change companies on the surface have a layer of this under the hood.”
Now, after completing the final closing on Cake Ventures in November, San Francisco-based Woodard is announcing its first fund. A $17 million vehicle, the fund will focus on seed and seed investments, with the goal of an approximate $500,000 check. Woodard serves as the firm’s founding partner and managing director, but plans to hire a venture partner and junior investment staff later this year.
Cake will look to make around 25 total investments from his fund; Woodard has done 12 so far. The portfolio already includes companies such as Rares and Most Days, but also training startup Bright, household bill tracker Gerald, disability support company, and neurodivergence Joshin, among others. Although that status is not a prerequisite for investment, about 40% of its investments to date are led by female founders, Woodard said, and 40% by founders who identify as black, a natural consequence, added Woodard, of “changing who sits on the investment side of the table.”
The new fund is backed by limited partners including Bank of America, Cendana Ventures, Foundry Group, Gates’ Pivotal Ventures, Plexo Capital and Screendoor. (Woodard said more than 25% of committed LP dollars came from women investors.) At Pivotal, the investment arm of billionaire philanthropist Melinda French Gates, chief investment officer Erin Harkless Moore said Woodard was impressed while serving as a consultant and mentor for a TechStars accelerator. focused on longevity that Pivotal co-sponsored.
“Many more funds are now focusing on ‘diversity’, on diverse founders or diverse demographics,” said Harkless Moore. “Where Monique differs is that she goes a step further with the depth of her research and she looks at the type of products, services and technology these consumers need.” Woodard wrote a report on aging called the “Grey New World” in 2020, noted Harkless Moore, demonstrating his thinking on the ramifications of population aging. That led to an investment in Guaranteed, which is looking to use technology to revamp end-of-life care.
Despite that support, Woodard said raising Cake Ventures’ first fund was a challenging process, despite a career that included building and selling an ad network, launching a mobile shopping company, and stints as a Venture Partner. in 500 Startups, a Venture Scout at Lightspeed Venture Partners, and an ongoing advisory role with SoftBank Vision Fund’s Emerge startup accelerator.
Woodard planned to raise $20 million initially; he ultimately opted to close the fund and go on with less. “I’ve said before that raising a fund is doing venture capital the hard way. And raising a fund as a woman is like crawling through glass, and raising a fund as a black woman is like crawling through glass with no clothes on, and then fire ants come all over you,” she said. “So it was always going to be difficult.”
For startups also finding the current funding environment challenging, Woodard said he hadn’t seen a significant slowdown in entrepreneurs launching new businesses in his early-stage view. However, the valuations at which investors value such startups have continued to fall, he said.
And while many eyes in venture firms currently turn to artificial intelligence and generative AI applications (as perhaps they did before with cryptocurrencies and Web3), Woodard said he’s playing a different game. “Many of those technologies are important, great defining technologies,” he said. “But I think what people are forgetting, frankly, are the people.” The user base, he added, for such products is changing. Ignore it and you could end up building an empty room.
