VCs and EMs and LPs, oh my! To help explain a few of those terms are co-founders and managing partners Sara Zulkosky (she/her) and Courtney Russell McCrea (she/her) of Recast Capital, a 100%-women led VC platform that supports and invests in EMs (aka emerging managers) with a focus on diverse partnerships. “The platform was created to drive returns and create substantive change in the VC industry,” Sara says.

So, how exactly does their platform work? “Well, there are three parts of the Recast platform,” she shares, “The core of the platform is a fund-of-funds that provides LPs (Limited Partners) diversified exposure to top-performing emerging managers. As strong complements to the fund-of-funds, there’s also a tuition-free, virtual educational program called the Enablement Program that includes learning and development for emerging venture managers. Lastly, there’s the Recast Accelerate, our latest program that supports 90+ women-led and nonbinary-led emerging managers in venture, including educational resources and capital to be leveraged in support of their fund backend operations.” More on that below, but first…

What’s an emerging manager, or EM?
COURTNEY: Recast defines emerging managers in venture as fund managers who are newly formed and have raised either Fund I, II, or III. They typically invest in early-stage startups due to their fund size.

What’s a VC?
COURTNEY: A venture capital firm raises capital from institutional investors like LPs (ex: individuals, family offices, endowments, foundations, pension funds, etc.) and in turn invests that capital into start-up companies that they believe have a potential to generate a large return and/or solve a specific issue within their sector. VC firms may specialize in certain areas of the market like health and wellness products and services, sustainability, biotech, and so much more.

Why does a startup company need this type of funding?
COURTNEY: There are several ways startups can finance their growth and raising venture capital is just one of them. One of the pros of working with a VC firm is that they usually have a network that they can leverage to help elevate a company’s profile and attract other investors, employees, or customers. They may also have deep industry expertise and/or functional areas (ex: go-to-market, engineering, etc.) to help scale the company more quickly. They can offer mentorship and may work closely with a startup founder to help them succeed. Some VCs are former startup founders themselves so they may be able to offer invaluable advice.

VCs receive shares of the company in which they’re investing; while this aligns incentives (if the company does well, then the investors and founders do well), giving away too much of a company can severely impact the financial outcome for the founders. This is why only those companies that believe they’ll generate very large exit outcomes should consider raising venture capital. If you can bootstrap the company yourself, all of the value created by the business is yours.

How are fund managers and firms who are working to bridge the diversity gap in VC getting attacked?
SARA: There have always been institutional barriers for and biases against underrepresented investors across the venture industry. For a long time, VC has been dominated by a homogeneous group of individuals, and a wide variety of unique managers and founders have gone unnoticed. There are a growing number of orgs out there focused on tackling these barriers head on, and we’re proud to consider ourselves one such organization. The fact of the matter is that the data shows that diverse led funds outperform; investment professionals with different lived experiences, perspectives, and networks are the same investment professionals that will see unique opportunities to drive returns and are best positioned to gain access to them.

Unfortunately, pendulums do swing. When there’s a focus by many on supporting this community, the few will look to break them down. We stand with those looking to change the makeup of who is a venture capitalist, and in doing so proving to the world that outsized returns do come from those who bring a unique or differentiated perspective to the industry. Still, like in any industry, some will want to hold firm to the old ways because it’s been successful in the past. With time these old ways will be proven to be misguided. There’s such a diverse community out there and with it, new opportunities that it’s time to reshape the current mold in venture capital.

Tell us more about Recast Accelerate and how it plans to help women-led funds in VC.
SARA: We are very excited to announce the first cohort of our Accelerate program. We received tons of applications from highly-qualified fund managers and we actually wound up selecting 36 instead of our initial 30 firms. These individuals will take part in our 12 week virtual program. Recast will offer educational components, executive coaching, access to our Enablement Program offerings including networking and community-building, and most importantly, a grant that these fund managers can put towards back of the house expenses like legal expenses, fund administration, technology stack, or audits, to allow managers to put existing capital into other areas of their firm.

And finally, what’s your advice to those venturing into the world of venture capital?
COURTNEY: We’ve collectively been in the private equity sector for many, many years now. It’s important to trust your gut (and then back it up with facts!), embrace your identity, and align yourself with others who share your same passions and goals. Not every investor will be a match but it’ll be well worth it when you find the right one(s). Networking is crucial in our industry; we really are in the business of people. Start getting yourself out there, connect with VCs and LPs on social media, attend events in your local area if you can. It’s never too early to start getting yourself known!