Gender-Smart Investing Journeys: Tracy Gray, the 22 Fund

I started my professional life as an engineer on the Space Shuttle Program, and I noticed that I was always the only black person (and often woman) involved in pretty much everything I did. And when I got into venture capital, in 1999, I noticed that the vast majority of people coming in to pitch, getting capital, sending in their business plans were white men. So since then I've wanted to find the nexus between private capital and economic development to ensure that the wealth being created goes to a broader segment of the population.

In 2007, I started a venture fund to invest in women and people of colour in tech. I raised my seed capital, and then the recession happened. So I became a Senior Advisor for International Business and Marketing at the Mayor’s office. My primary focus was increasing exports in the United States; that was the Obama administration's number one job creation tool, because companies that export create jobs faster, are more successful, and they're more resilient, especially during the recession. 

I soon realised that companies who were exporting - the majority of which were minority-owned - had no access to capital. Most of the SMBs in LA at the time were women and minority-owned. I decided to launch an impact fund, but I didn't want it to be concessionary. I’m fundamentally against a trade-off between impact and returns. I wanted the investment strategy to create the impact: it took me about three years to come up with that strategy.

Lift Off

In 2018, after we got another seed funder, we launched The 22 Fund. Our strategy is to invest in companies to increase their export capacity. It's a growth rather than venture fund, and our mission is job creation in underserved communities. The sector is tech-based or tech-enabled manufacturing because those are the clean jobs of the future. And these are quality jobs, because manufacturing companies that export pay higher wages and they're more likely to have healthcare. 

The strategy was also chosen because it brings in people of colour (POC) businesses by default, but we are intentional about bringing in women-owned businesses. We don’t really have to search for them because they're in our networks: our network looks like us (the fund is 70% women at partner level). Trickle down economics actually works when you have women and POC who control where the money goes. 

You need more women, especially women of colour, to get more women entrepreneurs and business owners funded. You need more women fund managers, and more women at the LP level, making capital allocation decisions. Because the system is primarily white males, women aren’t receiving capital at the same rates they’re entering the ecosystem. 

Women as Investors

There is a lack of capital going to women-owned businesses, and a lack of women in venture. On the other side of the equation, women control most of the consumer discretionary spending around the world, and we're going through the largest transfer of wealth from men to women that we've ever seen. Yet very few women invest.  If they're investing they're passive investors through a 401k plan or retirement plan, or they have a wealth advisor that tells them where their money is going to go. 

Growing women's wealth is crucial to changing the world. And that's women at every economic level. There's plenty of initiatives trying to bring more women entrepreneurs and more women professionals, investors, like angel investors and wealth managers and fund managers. But no one is speaking to ordinary women all over the world about the power of their money. 

That's why we started We Are Enough - to educate women at every economic level how and why to invest in women-owned businesses or with a gender lens on the public markets. We're launching a three year campaign to activate 3 million women to invest 3% of whatever budget they want to find in women-owned businesses or with a gender lens. If we get an average of $1000, including women in frontier and emerging markets, we'll move $3 billion toward women in three years. By that time, we want to have put ourselves out of business: women will say "We got this. We don't need you educating us anymore."

Beyond Silos

The world of impact and philanthropy are so siloed around their areas of interest. Gender lens investing is in a kind of silo, and within that you’re starting to get these other buckets around climate change and gender-based violence. But gender lens investing, like racial equity investing, runs horizontally across all silos and areas. Gender lens investing helps equalise education, it changes the climate crisis, it deals with gendered violence. Investing with a gender lens impacts everything.

I'm hoping more people can start to make these connections - because the path to changing the world is through women and growing their wealth. Full stop.