We were incredibly inspired by Mythili's determination to make change happen for her community, her willingness to take risks, and the compassion with which she leads the Neythri Futures Fund that has helped so many first-time investors make the leap. Mythili is also CEO & co-founder of Neythri.org, a sister organization to the fund whose mission is to foster, engage and advance a global community of South Asian professional women of all backgrounds and experiences who are committed to helping each other succeed.
We love the origin story of the Neythri Futures Fund, what was the turning point for you in founding your own fund? Was there a moment when you knew it was what you wanted to do?
The Neythri Futures Fund is a result of several experiences over the years that led to this idea. Timing played an important role and the time was ripe to create a moment like this. We have tremendous critical mass overall with South Asian women making waves in their respective fields. When I came to the U.S as an immigrant graduate student in the late eighties there was very little representation. As a woman in tech, as an engineer, I was constantly used to being the only woman in the room. I had grown up in a progressive household where I was always encouraged to assert myself and speak my mind. Yet when I was in corporate America, working in research labs that were predominantly white male-dominated, I would lose my voice. I experienced imposter syndrome, I wasn't sure if my ideas were smart or good enough to be shared amongst the louder, more assertive male colleagues who outnumbered me. Somewhere in the early part of my career, I lost the confidence I had growing up in India. I wish I'd had a platform like Neythri, where I could talk to like-minded folks, with experiences like mine and know that my thoughts were valid, and feel empowered to speak up.
When I became an entrepreneur in 2006, I realized that for all the disruption and innovation that venture capital seeks and bets on, there is almost none of it happening in the industry itself. Venture Capital is very homogenized, there is a certain demographic that dominates the industry, offering very few opportunities for others to break-in. I started my investing journey about fifteen years ago. It grew from my own frustration as an entrepreneur. As a female entrepreneur, as a woman of color in tech, there was no one like me that I came across. Representation makes a huge difference because venture is largely about pattern matching. Without a proven success pattern, investors just won’t invest. Women were few and far in between, and I didn’t match the patterns they had identified. In spite of my track record as an executive, I couldn't raise my series A.
I was determined to channel my frustration into creating an impact by becoming a check writer myself. I began my investing journey as an angel investor and invested exclusively in first-time female founders. It was through my experience as an investor that I realized how powerful it could be to bring women in the industry, especially first-time female investors, together. There was a huge untapped opportunity within the South Asian female community. Just within my own network, I knew plenty of incredible, trailblazing South Asian women who were successfully building products, services, and businesses, yet were not part of the venture ecosystem. I felt the time was ripe to change this status quo.
What are some of the challenges you’re facing as a first-time managing partner of a new fund?
Right off the bat, everyone wants to know what your track record is. This was my first experience launching and managing a venture fund, even though I had several years of experience as an angel investor investing my personal funds. However, I was coming into this with many years of reputable operator experience. The initial investors were people who knew me and had faith in my capability to execute. I was incredibly fortunate to have their trust and support. They believed not just in me, but in this mission and my passion to effect change. I've grown and learned a lot with the fund. One of my first challenges was building a team. Given that this is a small $10M fund, I was very determined to keep the overhead costs low, including committing my services pro bono. Understandably, for most, it wasn't possible to work on this full-time without a salary. Yet so many wanted to help and contribute part-time. So I started working with a group of part-time volunteers, which I quickly discovered was completely unscalable. It was a huge drain on my resources and my bandwidth because I was optimizing for everyone else's availability as well as training them on the job. There is no precedent for what we've done with the Neythri Futures Fund. There is no playbook out there. We were inventing on the fly. Building a core team was really my first big challenge.
You’ve grown the Neythri Futures Fund rapidly through your vast network, something many of us struggle with. Do you have any advice on building and maintaining a strong network?
As cliche as it sounds, I believe that to build a community-focused fund like this, with predominantly first-time investors, you have to be genuinely interested in people. You have to do things out of the ordinary. 75% of our investors are first-time investors. The youngest investor is just 25 and the oldest is over 70, a fifty-year age gap we are incredibly proud of. As a founder, to bring this diverse group together, you have to be willing to talk to people and listen to them. You need to take your time to answer questions and to educate. You have to be a people person. The combination of head and heart is important. A professional track record isn’t enough. You can't lose patience with first-time investors. They have a lot of questions, and you need to be there for them through the process. Fundamentally, you've got to enjoy talking with people.
How do you overcome the squeamishness of discussing money, raises, and investments to make women more active participants in their financial well-being? How can women foster more conversations about money and investments?
We can help women talk about money by creating forums for candid dialogue and education. We’ve done several angel investing 101 sessions and we were very upfront about the risks. This is a very high risk, investors can easily lose all their money. There were over a hundred women who came to my informational sessions for the fund. Many were excited at the idea but ultimately didn’t want to take on the risk, which is understandable. Now, every one of them wants to know when we're going to raise our next fund. So it's a process, women just need more opportunities to discuss and understand. When women see their peers successfully invest, ask for raises, and discuss money, their confidence will grow. Open and transparent dialogues will help normalize money conversations and make them easier when they arise.
What was your motivation in keeping the minimum entry point for Neythri lower than similar funds?
Accessibility. So many of the initial investors of the fund were very senior executives and operators, but they had never invested before. Several told me that they simply didn’t know how. In addition to these seasoned professionals, I also had many young professionals early in their careers who wanted to invest. Investing can be intimidating for first-timers. Even the most senior members weren’t going to write $100,000 checks easily, and young professionals simply don't have the funds to make those big investments. To me, setting the minimum entry point lower was about bringing these people together for the first time. Building our community. So keeping the barrier to entry low and accessible was extremely important. The strength of this community is the true value of this fund.
Despite all this progress, women are making in terms of equity and visibility in the workforce- in 2020 women received 2.3% of VC funding, down from 2.8% in 2019 (an all-time high). Why is that number so insurmountable? When will we see real change? What will help us get there?
I think the real change will happen when we change the table upstream, by having more female investors. Data has shown that having more women investors positively impacts funding to women entrepreneurs. As I mentioned earlier, the theory around pattern matching in venture capital is very real. If you don't fit a pattern, you won't get funding. In the absence of strong patterns of female entrepreneurs having successful exits, VCs are hesitant to invest. Of course, if you don't fund them in the beginning, it won't happen. If you don't have an ecosystem that allows female entrepreneurs to thrive, investors won't recognize that female entrepreneurs can be successful. It's a self-fulfilling prophecy at the end of the day. With more female investors, more women will get funded. It creates a virtuous cycle, and a new pattern to be matched.
How do you hope funds like Neythri will change the world for women?
I can already see this happening. In the last two weeks since we announced the official closing of the fund, I've gotten at least a dozen inbound inquiries from complete strangers, all women, from different parts of the country saying they want to use this as a playbook to create similar funds in their communities. There could be no better testimonial than that. It shows that not only have we moved the needle within the South Asian Women's community, but we’re inspiring change in other communities as well. We have an incredible diversity of investors. As I said earlier, 75% are first-time investors and they span an over fifty-year age gap. I’m deeply proud of the diversity of this community. We have everything from young employees just starting out to accomplished executives and operators, all of whom bring unique value to our portfolio companies. Now that we have this playbook, and have shown it can be done, it can be replicated by other fund managers in their own communities. I think that will affect change. That's how disruption really happens, in small but very tangible ways.