The Artemis Fund focuses on women founders in underserved communities

The Artemis Fund is a Houston-based firm built by three women with the goal of encouraging more women-led startups. The company launched in 2019 and has raised a $15 million initial fund, which closed earlier this year.

Diana Murakhovskaya, who launched the firm with Stephanie Campbell and Leslie Goldman, says that the three women met over a mutual interest in investing in startups, one that didn’t just write a check and walk away, but that was really involved in helping these companies grow and thrive.

“We launched the fund in 2019, and we were looking to raise a micro VC to invest in about 15 companies, and keep a concentrated portfolio where we can really help these companies,” she said. The LPs in the fund are split 50/50 between men and women with an equal capital share among them, she said.

The women recognized that female founders faced an up-hill battle when it came to getting funding. In fact, in 2019 Crunchbase research found that just 13% percent of VC money went to startups with at least one female founder with all female founding teams accounting for just 3% of that.

At the same time, as the women came together in the Houston investing scene, they couldn’t help but notice that it was mostly dominated by older white men. Murakhovskaya, whose background is engineering, connected with Campbell, who has an MBA and they wanted to know why more women weren’t getting involved.

“I said, ‘Where are all the women?’ […] And so we started doing these dinners to bring together women and asking them why they’re not investing, what they’re doing and, and these were all corporate women [who had the money to invest].”

What they found was that either women had never been invited to invest, or like them they were looking to do it, but found angel investing less than satisfying. About this time, they met Goldman, who was a lawyer, and was on the board at the Houston Angel Network. “She’s an active angel in about 50 companies and 11 funds and similarly had this thesis of shifting all of her investing to female founders at the time,” Murakhovskaya said.

The three women with distinctly different professional backgrounds decided to come together and the idea for The Artemis Fund began to take shape. “We thought it was the perfect [mix] — kind of what happens when an engineer, an MBA and a lawyer get together. So, we find that our backgrounds are unique, and that helps a lot of our portfolio companies in a lot of different ways,” she said.

That meant they wanted to be involved with the founders and help them grow the businesses. “And so that was one thing we wanted to make sure that differentiates us from the other female-focused VCs. We would invest nationally, we would lead or co-lead most of our rounds and really help the companies along the capital stack. And that meant running a much more concentrated portfolio.”

The fund focuses on startups with female founders, who are in large potential markets, but ones that conventional male-dominated VCs might not see the potential in. Among the portfolio companies is UNest, a company that helps families take advantage of tax-exempt college savings accounts to save money for their kids’ college education and Upgrade, a maker of custom wigs and extensions. These businesses checked each of these boxes of being run by a woman in a large market that had been mostly ignored by the traditional investment community.

Murakhovskaya says so far the firm has invested in 11 companies with plans to invest 4-5 more and then raise the next fund. She says while it’s about helping nurture and build these companies, it’s also about finding companies that continue to grow into their Series A, B and beyond, while delivering a good return for the company’s partners.

“This is not a charity or philanthropy. We really believe that women and diverse teams in particular will outperform, on top of bringing together a different set of companies and products and services that are just not being met for the consumers that they’re trying to serve.”