Haley Fradkin is an associate at Plum Alley Investments, based in New York. Prior to Plum Alley, she worked in finance at State Street and Morgan Stanley.
What attracted you to venture capital and working with startups?
I didn’t necessarily grow up dreaming to be a VC but I have always been interested in technology and building business. From a young age, I began learning these dynamics through the lens of the founder’s perspective and my father’s principles as an entrepreneur and self-taught investor. Over the years, I grew more and more passionate about innovation and the future.
When assessing my next career move, I looked for key elements required to drive positive change. I knew I wanted to support other risk takers and believed that empowering startup founders trying to improve the human experience would be a smart way to deploy capital given the great potential of their inventions and companies. After nearly a year of searching, I found my way to Plum Alley. The team decided to bring me on for 10 weeks to assess my ability to operate and grow the investment platform. From that day on, I was committed to earning a permanent seat at the table.
Why Plum Alley?
It was clear to me that Plum Alley was an intentional investor and transforming the experience for stakeholders. By leveraging the interconnected system of capital, they were accelerating the success of diverse companies by curating and activating a more diverse cap table. After my experience at larger financial institutions, I was attracted to a new model of private investing and believed in their unique approach toward portfolio construction in this asset class.
Plum Alley’s mission so closely aligns with my own intentions and lifestyle. I knew the company was future-focused and leveraging pooled capital for the purposes of helping people and the planet. Their investment strategy was furthering scientific and technological discoveries that had the potential to solve some of the most challenging problems of our time.
I couldn’t turn down opportunity to sit around a table with the Plum Alley team, all of whom have been trailblazers, decision makers and game changers in their own lives. They were uniquely positioned to move the needle in narrowing the gender gap while fueling the evolution of the broader technology ecosystem.
Talk me through Plum Alley's model.
Plum Alley is a private investment platform that utilizes its strategic members to help scale investments into portfolio companies. Our membership model provides access to individuals, family offices and corporations to build a custom and diverse portfolio of direct venture investments.
Our team identifies founders and companies building frontier technologies addressing areas in need of disruption including climate change, education, and healthcare, amongst others. Within our membership, we build syndicates to invest in Series A and B financing rounds and play an active role in supporting the early growth of these companies.
Beyond deal flow and investment opportunities, Plum Alley delivers continual thought leadership on next-generation technology alongside our ecosystem and corporate partners with deep domain expertise. We engage our members in experiences around AI, blockchain, cybersecurity, gene editing and beyond to foster ongoing thoughtful investments in innovation.
Based a number of historical and structural factors, most capital resides with men. How was Plum Alley able to attract such gender diversity in its investment members?
Our research-driven approach gives individuals the power of choice. We do things differently by treating the investment process as more than a transaction because we value our members and know they have much to offer beyond money. This model empowers them through education, access and engagement toward building a personalized portfolio. Plum Alley members are motivated to actively participate because they are supporting companies that are changing the world for the better.
Plum Alley’s model resonates with all audiences, beyond individual accredited investors. We do not exclude men or others from access but rather cultivate a diverse group of investors, in contrast to historic and existing funding patterns in this industry. We believe the next generation of Fortune 500 companies should reflect the diversity of the world around us.
These businesses are effectively shaping our future and should deliver products and services that appeal to a full range of users, especially women, as they control household spending. It is our job as investors to be proactive toward supporting forward-looking companies and our members agree that this is a good business decision.
What did you do during your 10 weeks that led to a full-time role?
I looked for ways to add material value to the investment committee before I was a formal part of it. I attended weekly meetups, listened to podcasts, and read every book, article and blog post I found relevant to Plum Alley’s investment strategy. I hustled outside the office each day to develop my own high-quality relationships and resources to bring deals to the table. In my first few weeks prior to an official job assignment, I surfaced two investment opportunities that resonated with our members and eventually became Plum Alley syndicates. I was lucky the team recognized my dedication early on and gave me the chance to continue sourcing compelling companies.
Did Plum Alley consider other alternative investment strategies like equity crowdfunding?
Plum Alley was founded in 2012 and continues to evolve to bring greater value and success for women investors and entrepreneurs. Plum Alley offered e-commerce and crowdfunding before it became a private investment platform. Today, we are designed as a solution for a broader base of investors to experience value beyond their investment dollars. We support companies that are revolutionizing industries and solving real world problems. Our strategy is focused on early stage venture because we are uniquely positioned to help establish and scale business models and facilitate substantial business development opportunities.
Especially at the early stage, you probably receive pitch materials from startups who are still in ideation as well as companies with a developed product and recurring revenue. What do you do when you encounter founders who really need that extra support?
Whether or not a founder is a current candidate for a Plum Alley syndicate investment, I listen closely to their pitch and provide support with material resources. After a thoughtful assessment of the opportunity, I offer candid and actionable feedback based on my own pattern recognition. I find my engagements through judging pitch competitions or hosting accelerator office hours to be highly valuable and productive. In each interaction with an early stage entrepreneur, I assure they walk away feeling empowered. I keep in close contact with these founders to observe their traction and offer ongoing encouragement and insights from an investors perspective. Additionally, when their companies are raising growth capital, they are motivated to offer Plum Alley an allocation to invest.
What are some companies in the Plum Alley portfolio that really excite you?
This summer we invested in Mammoth Biosciences - the first CRISPR-based diagnostic platform for disease detection. Dr. Jennifer Doudna and their team of pioneering scientists invented a gene-editing solution for molecular diagnosis with applications across healthcare, agriculture, manufacturing, forensics and their upcoming product release will be an at-home STD test. Before that, we invested in Aclima who just partnered with Google to map hyper-local air quality data around the world. We support a number of leading-edge biotech solutions like EpiBone using regenerative medicine, BioEclipse that’s developed a novel immuno-oncology cancer treatment, and Cordex a medical device to detect heart disease. I am thrilled by the promise of our syndicate companies and the founders I continue to meet every day.
Have you faced any challenges as a female investor?
As our job is to minimize challenges for other women investors and women entrepreneurs, significant barriers do exist. The data clearly shows that only 9% of US venture firms have women making investment decisions and less than 15% of venture dollars are deployed toward companies with a female founder. Despite this gender investment gap, businesses founded by women deliver more than twice as much revenue per dollar invested than those founded by men. Over the next decade, we will see a dramatic shift in the percentage of both women founders and funders. So when I personally experience resistance due to age or gender, I try to cease judgement early on through my professionalism and conviction about my own value as an investor. I know they will be sorry for passing up an opportunity to partner with me and Plum Alley.
What advice do you have for young women who want to enter VC - on the investing, operations, or platform side?
Prioritize relationships with coaches, mentors, and advisors to build your personal board of directors. Find ways to capitalize on your unique strengths and constantly to deliver value to others. If you focus on being a giver, people will gravitate towards you allowing you to grow your network, a resource that is as valuable as capital. Strive to acknowledge and break down your own biases. Be respectful and observant toward other perspectives and opinions. Push and challenge yourself each day and measure this growth overtime. Many bold women reading this are ready to take a seat at the table - stay relevant, principled, and in the game for the long-run.