3 Ways VCs And Angel Investors Can Make Their Portfolios More Inclusive

Hello to Canada’s SaaS Community,

Studies routinely show that women build amazing companies that deliver for customers and shareholders. Yet women receive a tiny portion of VC funding. Groups like The Firehood aim to solve that problem by investing in women-led companies and helping build stronger connections for up-and-coming founders.

Key takeaways:

• Rather than only accept pitches in private meetings arranged via warm introduction, host publicly available pitch events at conferences where you can meet with more founders.
• Build your own community of founders with options for people who are ready for investment and those who aren’t, but might be in the future.
• If you’re looking to diversify your portfolio, you can always reach out to pre-vetted startups that The Firehood has already invested in.

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In a world where women-led companies only receive a tiny fraction of available VC funding and women founders routinely have their commitments questioned, The Firehood is blazing forward with actual cash and connections, not just pleasant words.

An active Angel- and Seed-stage investor, The Firehood has invested over $4 million into 20 women-led startups from Victoria to St. John’s through its in-house fund, called Phoenix Fire, and its 100+ angel investor community.

Speaking with SAAS NORTH, Danielle Graham, a co-founder of The Firehood alongside Claudette McGowan, explained how the team structured the organization for inclusive success—a model she hopes other VC funds will copy.

1. Go where founders are

Pitching a VC usually requires a warm introduction and a series of private meetings with Analysts before you meet actual decision makers. This isn’t how The Firehood does it.

Danielle said the Firehood’s “secret sauce” for great, diverse dealflow is attending other events and conferences like INNOVATEwest and SAAS NORTH.

And the group doesn’t just attend to network—they host pitch events inside the conference and commit capital that day. For example, The Firehood committed over $100,000 in investment at SAAS NORTH 2023.

“You have to say, ‘Where is that entrepreneurial talent and why isn’t it being unlocked?’” said Danielle. “And so [hosting pitch events at big conferences] is also part of the overall thesis of ‘How do we encourage and create a diverse tech ecosystem?’”

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2. Build a multi-pronged community layer

Beyond connecting at other events, Danielle said you have to build your own community to ensure consistent, diverse dealflow. In particular, it’s a way to keep in touch with founders who may not be ready for investment quite yet—but will be soon.

The Firehood builds this community in three distinct ways that overlap with one another:

1. Digitally: Through their newsletter, The Flame, and other social media-based connections.
2. Pitch events: The Firehood hosts their own pitch events monthly where founders can get in front of investors.
3. Investor readiness programs: Cohort-based programming to help women founders get ready for raising larger rounds to fuel growth.

“We hear every single women founder who wants to pitch us, so it’s a really open, inclusive model for earlier stage, later stage, or just individuals who want to connect into the tech ecosystem,” said Danielle. “And so that enables a starting point for further conversations, tapping them into our newsletter, connecting to our program partners, and seeing them then emerge in the next conference or the next year as an investee.”

3. Diversify how you fund startups

The VC model is fairly straightforward—cash for equity. But that doesn’t mean you can’t get creative.

The Firehood invests in three different ways:

1. Traditional VC investing through The Firehood’s Co-Founders’ fund, Phoenix Fire.
2. The Firehood angel network: Average angel cheque size is between $25,000 and $100,000, but all angels commit at least $10,000 per year deployed into startups, whether solo or in a syndicate.
3. Pitch competitions: Leveraging both angel and Phoenix Fire funds, Firehood pitch competitions are a marquee way to deploy capital into startups at events, whether their own or attending third-party conferences with their famous Firehood Angel Camp model.

The Firehood also has different investors each time, from both Phoenix Fire and their extended angel network. Danielle said this representation is not only important from an inclusion perspective, but it gives them a reason to encourage a founder to pitch multiple times, thus developing a deeper relationship with the team.

“A founder can pitch us at SAAS NORTH and then they can pitch us later at INNOVATEwest—and it could be entirely different angels who have a different perspective, who will also potentially invest,” said Danielle.

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Remember: it’s about the founders

Danielle hopes more VC funds will start showing up at conferences to invest in founders and build more inclusive communities. But in the meantime, she’s also happy for investors to piggyback off of The Firehood’s efforts.

If any investor wants to diversify their portfolios, Danielle said The Firehood has already done due diligence on every investment they make—and you can absolutely reach out to those founders for a conversation or ask Danielle for a warm intro.

“We want those companies to succeed,” said Danielle. “We want them to get funding, and we’re already investing if they’re in our portfolio for announcing them. So they now have an opportunity to get more co-investment, and we need that additional support to fuel their growth.”