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Illuminate Ventures today closed a $20 million fund to invest in early-stage business software startups.
Illuminate isn’t your typical Sand Hill Road venture firm. Its founder, Cindy Padnos, has recruited some top-notch women investors to help her fund promising cloud and software-as-a-service (SaaS) startups.
Given the relatively small number of women VCs, Silicon Valley has not been able to shed its reputation as a “glorified old boys club.” Padnos has spoken out about and wrote white papers on this issue. A recent Illuminate paper found that women entrepreneurs actually build more capital-efficient high-tech companies than their male counterparts.
Padnos has has been working in venture capital for over a decade as the former director at Outlook Ventures. Prior to that, she founded and ran Vivant, one of the first SaaS companies. She points out that she’s been investing in enterprise technology “long before the space was considered trendy.”
Illuminate’s team is dedicated to supporting female entrepreneurs, a bet that appears to have already paid off. Two of the firm’s most successful portfolio companies were started by women. Autodesk acquired game design platform WildPockets, and ad-tech startup Red Aril was an early acquisition target for Hearst Corporation.
Another unique aspect to this firm is its advisory board. Illuminate has recruited high-profile executives and operators, like Donna Dubinsky, the chief executive of Numenta and a former cofounder of Palm; and Sarah Friar, the chief financial officer at Square.
“We have a great list of experts to support our portfolio companies, and many of them are women,” said Padnos by phone. These advisers will occasionally take board seats at Illuminate’s startups. They will also lend a hand to the founders as they attempt to land their first major enterprise customers.
Padnos and her investment team, which also includes Rebecca Norlander and Sarah Cone, plan to fund North America-based cloud, software-as-a-service, big data, analytics, and enterprise mobility companies. Illuminate will typically invest up to $3 million in a series A or B round, and the firm reserves funding for follow-on investments.
It’s a small fund, but Padnos believes the firm has been able to punch above its weight as they take “strong positions early” and “invest like a traditional venture firm.” Unlike the 500 Startups model, for instance, Illuminate won’t just invest a small sum, step aside, and keep their fingers crossed for a home run. The firm will typically take board seats, closely advise the companies, and guide them to success.
Illuminate was formed in 2009, and closed its first $5 million proof of concept fund in 2011.