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Meena Harris knows how to build. The lawyer and author grew her side hustle of making activist T-shirts into a behemoth of a brand, Phenomenal, which recently expanded from merchandising to media to entertainment. Now, she wants to invest in those who show that same scrappiness with her next, and literal, venture: Phenomenal Ventures.

The entrepreneur, who is the niece of U.S. Vice President Kamala Harris, is starting the venture firm with partner Helen Min, a former head of marketing at AngelList, Plaid and beyond. The duo met as early employees at Facebook, where they became close friends and eventually tech operators who shared notes on everything from grad school to angel investing. The idea for a joint VC firm materialized in 2021, months before the downturn began, Harris explained.

“We feel really confident in our ability to succeed, but also wanted to start modestly and just do the work, despite some of the uncertainty around the economy,” she said.

Phenomenal Ventures has already closed a debut early-stage-focused fund totaling $6 million, with investments from firms including 776, Tribe Capital, Slow Ventures and founders from tech companies including Dropbox, Quora and Pinterest. Around 38% of LPs are founders or former founders. Nearly half of the fund’s investors self-identify as women, and 12% as Black.

The new fund allows Phenomenal Ventures to participate in pre-seed to Series A rounds, averaging check sizes around $100,00 to $500,000. The firm additionally tapped Zabreen Khan as a partner, who started her investment track at Andreessen Horowitz and Lead Edge Capital.

The firm has invested in 13 companies so far, nine of which are built by underrepresented founders (although Min said they don’t have any specific diversity mandate or quota).

“Every company that Meena and I have worked for — as startups employees at Facebook, Slack, Dropbox, Uber, Plaid, Quora, AngelList, they are literally all by non-underrepresented founders — our networks very much reflect those companies and the networks we were a part of for so long, to say we’re going to turn [down] that deal flow that surfaces because of the network we’re a part of… I don’t think [that] super makes sense, especially not for fund one,” Min said. “Venture is all about leveraging the unique access that you have.”

The timing of the firm’s public launch is notable. The tech industry is going through a reset, as shown in public market struggles and sector-agnostic layoffs. Funding for female founders is dropping. “There are funds of all sizes still being raised, we know that there’s money out there that is still being deployed and raised, but not many of them are led by solo GPs — even fewer are led by women, let alone women of color, or people like us who are women of color and aren’t career venture capitalists,” Harris said.

The fundraising process for Phenomenal Ventures’ fund, per Min, took around a year. “I am very transparent about this and I wish more people were: we set out to raise a larger fund,” she said, adding that they closed the first half of the fund in the first three weeks of fundraising. Then, Min says, the slowdown froze LPs, impacting the fundraising process.

Eventually, Harris and Min decided that they would stop fundraising after their first close, focusing on making this a proof of concept fund that puts them in business. “There’s a real tradeoff between the time that we spend fundraising and the time that we can actually spend with deal flow and meeting founders and helping our portfolio companies, so we decided to call it,” Min added.

“We really feel confident in our ability to succeed but also really wanted to start modestly and just do the work…despite some of the uncertainty around the economy,” Harris said, later adding, “you can be fundraising forever, especially in terms of what the economy looks like.”

Harris said that Phenomenal Media and Phenomenal Ventures will operate as two separate legal entities. Optically, the brand overlap certainly helps with marketing; yet Phenomenal brand’s roots of being in the e-commerce space means that the firm often gets inbound pitches for physical goods. While Min says they never categorically say no to the DTC category — which has been through tumultuous times over the past few years — they tend to invest in what they know: which are software enterprise companies, fintech and future of commerce.

“I think that’s a big surprise to people because we are women, and then the Phenomenal brand and just sort of its history,” Min said. “But we’re really focused on things that will have venture-like returns.”

For Harris, the firm feels like the opportunity to have a “mission-driven impact” on the tech industry that she has been a part of for over 15 years. She’s eyeing the entire “value chain” of startups, with the first stop being venture.

“With venture, and doing it at this scale, you have the ability to make an impact with your LPs, GPs, founders or portfolio companies down to employee culture and the end users that they serve,” Harris said.

Phenomenal Ventures, built by Meena Harris and Helen Min, debuts by Natasha Mascarenhas originally published on TechCrunch

Source: New feed

2023-02-13T19:00:37+00:00
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