Five years ago when they were contemplating starting a new venture capital firm that would make a positive social impact, Jen Lee Koss, Courtney Leimkuhler and Elana Berkowitz realized quickly that they’d need to prove themselves before trying to raise a fund.
“Look, we’re not going to come out of the gate and raise a $35 million fund. We need to build a track record,” Leimkuhler recalled thinking.
Leimkuhler met Koss during their undergraduate studies at Harvard University, while Koss met Berkowitz during their graduate studies at Harvard Business School, later introducing her to Leimkuhler in 2018 as they began to form the idea of Springbank.
The trio pooled their money and invested as angels in more than 20 start-ups as the first step toward attracting LPs for an institutional venture fund. The next step was leveraging their combined network of family offices and high-net-worth individuals. The trio formed SPVs to invest in another “eight to 10” deals, in which they used a carry-only fee structure, forgoing a management fee to prove they could successfully invest at the earliest stages.
They appear to have impressed the LP world, as their firm Springbank Collective has closed on $35 million for its debut fund with backing from institutions including Bank of America, JP Morgan and AIG. The founders rang the closing bell at the New York Stock Exchange on June 21 to announce the close of their fund.
“There’s a huge opportunity to rethink the way that corporate America and the way the investment community have thought about solving gender equity,” Leimkuhler told Venture Capital Journal. “We want to think about mobilizing early-stage investment capital into businesses that are not necessarily founded by women but that are building things that will disproportionately affect women.”
Leimkuhler, who spent nine years at the NYSE, says that her corporate background and experience in M&A pairs well with Koss’s traditional investing background from the Ontario Teachers’ Pension Plan and Berkowitz’s public sector and social entrepreneurship experience gained during her time at the Federal Communications Commission and US Department of State. Springbank has, as Leimkuhler puts it, “a unique combination of skills and network well suited to our thesis area in particular.”
They officially founded New York-based Springbank in 2019 to invest in seed and early-stage companies primarily based in the US. The firm focuses on companies building what it calls “the infrastructure that can help close the gender gap.”
As the company website says, “We invest in the infrastructure serving the long-overlooked needs of women and working families. It’s a $1 trillion opportunity hiding in plain sight.”
The firm originally set out to raise $40 million for its debut fund but felt $35 million “was a pretty good place to land given the environment we’re in.”
The second half of its name signifies how Springbank continues to draw on the network its founders built for both capital and operating expertise.
“Collective really was us leaning into what we feel is our differentiator, which is that we have this incredible network of around 100 individuals and family offices that are mostly sitting operators,” Leimkuhler says. “We think of ourselves not as an angel group but as a syndicate of folks that have relevant expertise and a unifying perspective on the market.”
Springbank’s debut fund employs a 2.5 percent management fee and 20 percent carried interest and is backed by institutions as well as venture and impact investing funds including Union Square Ventures, Foundry Group, Anthemis, Lux Capital, First Close Partners, Gratitude Railroad and New Summit Investments. The firm has already completed 12 investments from the fund.
“We have a number of family offices and other impact investors, and some other venture funds,” Leimkuhler told VCJ. “We also have a large handful of individuals from our collective who converted for us, including our first large check into the fund.”
Where some feel that impact investing strategies sacrifice returns for social change, Leimkuhler says the two are intertwined.
“We feel that impact and profit are really aligned,” she told VCJ. “At the end of the day the only way the impact comes is if the business is really successful, capital efficient, profitable, can raise follow-on capital, and can eventually tap the public markets. If they can’t succeed in doing those things, then they won’t succeed in delivering the impact.”
Leimkuhler also stressed that, despite having a portfolio of over 70 percent female-led companies, the firm does not have a mandate to invest in female founders. She points to the firm’s investment in HR software platform Dandi as representative of the companies it looks to back.
“[Dandi] has an unbelievable capacity to show you your people data by demographic marker,” Leimkuhler told VCJ. “If you want to see if women who work remotely are getting promoted, you cannot see that with any of the HR tech platforms today, but you can with Dandi. As it scales, we’ll be able to build our workplaces better, build more inclusive cultures and workplaces where hopefully we’ll retain diverse talent where that’s been a challenge.”
Dandi does have one female co-founder alongside five male co-founders, but it was the company’s ability to create greater equity in the workplace that drove Springbank to co-lead its $3.81 million seed round in August 2022.
Other representative investments Leimkuhler mentioned include female leadership platform Chief, family-focused complex medical care service Wellthy and an unnamed company that uses artificial intelligence and machine learning to rate embryos used for in vitro fertilization (IVF).
Venture Capital Journal previously covered the close of Springbank’s fund based on a press release.