VentureForward Blog Series: Investing in Inclusion

Note from NVCA: As part of NVCA’s VentureForward initiative, we launched this blog series in November 2017 for industry leaders to share their perspectives on why diversity and inclusion (D&I) are important for the future of VC, their firm’s activities and approach to D&I, and guidance for how we—as an industry—can drive meaningful change.

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To date, the series has focused on the perspectives of VCs. With this edition, we changed it up by shining a spotlight on an entrepreneur developing products/services that foster inclusion in the workplace and a VC firm that focuses on D&I and funding entrepreneurs disrupting this space. Jessica Strong of Flexable and Terri Glueck of Innovation Works (IW) share their thoughts in the interview below:

Investing in Inclusion

What is Flexable?

Tell us a bit about Flexable and how it works.

Jessica Strong (JS): Flexable provides on-demand pop-up childcare at workplaces; professional events like networking, trainings, and conferences; and personal events like weddings. We ensure that quality staff show up at the event with all of the toys and activities to keep kids safe and entertained; we have full liability insurance and we fit into whatever space is available, like an empty conference room. We’ve made the process easy for businesses that want to be as inclusive as possible. We are currently in Pittsburgh, but will be expanding to other cities soon.

How did you come up with the idea of Flexable?

JS: Priya Amin and I are both moms (she has two boys ages 7 and 4; I have three kids, 10, 7 and 3), and our work experience has run the entire gamut from professional/corporate managers of large staffs and budgets, to independent freelancers/consultants, to stay-at-home parents. We also both have husbands that work long, non-traditional hours. Flexable grew out of our personal frustrations with wanting or needing to attend professional events  but not having easily available childcare The business took off once we developed the idea of placing the childcare where the parent was actually going to be – which is at the event. This allows an extra layer of trust to be built into the process, knowing their child is down the hall with a trusted, vetted caregiver.

Jessica Strong and Priya Amin, founders of Flexable

What’s been the user feedback/response thus far?

JS: The response has been very positive, both in terms of press and social media reach (e.g., having parents share our posts with their companies to request childcare) and in terms of sales. Similar to how companies accept the need to provide vegetarian food options and handicap-accessible space, they are now open to increasing the ways in which they can accommodate even more attendees through childcare options.

We’ve also seen a huge interest in providing childcare at workplaces on days when school is closed – for example, the public schools in Pittsburgh are closed on Election Day, but that is not typically a “standard day off” for most parents. Because we can set up at the workplace, we’re allowing parents to save their limited vacation/PTO days for actual vacations! This is especially useful in industries where turnover is costly, or where there are time-limited spurts of all-hands-on-deck.

It is also interesting to see, in real time, the conversation around inclusivity, feminism, and childcare coming up in conversations where it previously wasn’t discussed. Having the ability to pick up your child from daycare and head straight to a professional event, because they are offering on-site childcare, relieves a huge amount of stress for parents.

A group of kids in a Flexable childcare program

Innovation Works: Pittsburgh’s Most Active Seed-stage Investor

Can you briefly describe Innovation Works’ investment strategy?

Terri Glueck (TG): Innovation Works (IW) is the most active seed-stage investor in Pittsburgh’s tech companies and one of the most active seed investors in the country. In addition to the seed fund, IW has two nationally ranked accelerator programs—AlphaLab (software) and AlphaLab Gear (hardware)—as well as a follow-on fund called Riverfront Ventures. The combination of risk capital, plenty of hands-on experience, and a robust network of additional mentors and resources provide Pittsburgh’s entrepreneurs with a successful means to start and scale their business. Our portfolio encompasses sectors such as software, robotics, medical devices, and related technologies.

Terri Glueck – Director, Community Development and Communications at Innovation Works

Tell us about IW’s focus on diversity and inclusion (both at your team level and at your portfolio company level)?

TG: IW has helped set the tone in Pittsburgh for the city’s focus on ‘inclusive innovation.’ We all know by now that leaders and teams that come from different backgrounds produce high-performance cultures that are more innovative, address emerging markets effectively, and are more customer focused. The IW board and team have worked for years on strategies that broaden our reach and include diverse founders. Roughly half our team is comprised of women and people of color, and our portfolio is roughly the same, with about half having founders who are female, people of color, or both. Because we work with companies at their formation stage, we have the opportunity to help our portfolio companies build positive cultures right from the start. IW has a director of HR & Inclusion who works directly with our portfolio to implement best practices to attract, motivate, and retain talent. Her job is to help IW and our companies perform at the highest standards.

Flexable and IW Join Forces

How does a company like Flexable fit into your strategy? What piqued your interest in the company?

TG: Flexable started out in our AlphaLab accelerator program. We felt they were tapping into a huge unmet need with a large and growing market. So many workers, especially with the rise of the gig economy, need childcare solutions that don’t currently exist, and Flexable was addressing this problem. At the same time, we realized that the long hours founders put into their businesses to launch their companies are often exacerbated by the numerous events for networking with investors, mentors, customers and other entrepreneurs. It is tricky for parents and caregivers to attend these events. Not only was Flexable a great company creating a great product, but they had a solution to a problem we were experiencing ourselves. We began using their services during our Demo Day, at some of our educational sessions, and other events open to the community so that parents could attend. Now that Flexable is focusing on companies and organizations that want to offer childcare at conferences, days off from school, and other opportunities when parents need unconventional childcare coverage, they’ve hit on a customer base and revenue model that is really taking off.

What’s been the role of IW in Flexable’s growth (beyond just financial capital)?

JS: Beyond investing financially, IW made the commitment very early on to having childcare available at every single event, from morning breakfast series, to thought-leader talks, to giant annual events like Demo Day. When we talk to other investors and potential companies and we are able to point to IW and say, “Innovation Works is already doing this because they recognize the need for ensuring inclusivity,” that makes a huge difference, because they are recognized as a leader in the Pittsburgh ecosystem.

Flexable childcare provider with a child in one of Flexable’s programs

Inclusivity in the Workplace: A Growing Sector?

Oftentimes, discussions on diversity and inclusion revolve around investment teams and portfolio company founders/teams. Flexable seems unique in that it’s providing a product/service to drive inclusivity throughout in the workplace. Is this a space that you see growing?

TG: Flexable has become a ubiquitous part of Pittsburgh’s efforts around inclusive innovation. Now other startup support organizations–and even the Mayor’s office–plan on offering and marketing the availability of free childcare at events because Flexable has helped set that expectation in our community. If we’re trying to lower all barriers so more of the community can participate and have access to resources for startups, providing childcare goes a long way to making the environment more open and welcoming to moms, dads, and caregivers. We know this is a growing space because we see how the concept has caught on in Pittsburgh and become a standard in the city for innovative organizations and progressive companies.

JS: Absolutely. The timing feels especially key here, between the conversations happening nationally around #metoo/harassment in the workplace, attracting and retaining millennial talent, and the “off-ramp” that many women feel after they have children. There has been so much research around how high-performing teams, companies that have the best long-term returns, and companies where employees rate the highest job satisfaction all have in common a commitment to inclusivity. Flexable provides one more way for companies to honor that commitment.

Priya Amin and Jessica Strong

What’s next for the company?

JS: We are planning to expand later this year after getting requests from parents and companies in eight other cities! We are in the process of finalizing some tech improvements to make our internal workflow easier and bringing on additional staff to help the company grow. We have secured contracts with several major Pittsburgh entities for workplace-based care, so that means we will also be hiring more caregivers soon!

Looking Broadly: Driving Progress for D&I in VC

What do you think have been important areas of progress to drive D&I in entrepreneurship/the VC industry? What are key areas that need improvement? Any recommendations for investors or entrepreneurs?

JS: One is having more women literally at the table during pitches for incubators and accelerators, to better judge the applicability/value of the proposed project or idea. A female friend of mine who designed a new type of bra to relieve the back pain associated with larger breasts has talked about how critical it is to have women in the room, because that just isn’t an issue that men would know much about. Seeing more women at pitches, as EIRs, and as funders has been really great.

I think there’s more that could be done to tie funding to D&I metrics. I recently had a conversation with a group of women entrepreneurs about something like the NFL’s “Rooney Rule” for funders, where they would ask each team applying for funding how many women and/or minorities they interviewed for key positions, mentoring, advisory board seats, etc. Not necessarily mandating that a company would have to hire a percentage, but simply increasing the diversity of the pipeline of applicants, which could have huge positive effects on the company.

TG: D&I have been a focus of the corporate world for years as a means to attract and retain top talent. Venture capital is late to the party. However, unlike the bureaucracy of large corporations, the venture world understands disruption, is nimble, and can adopt practices of inclusion quickly. Some of us work with companies as they are just starting out and can provide the guidance these emerging entrepreneurs need to create truly inclusive cultures at their companies. If the investment teams are diverse, then that will put D&I in the driver’s seat where decisions are made on the companies receiving investment, because diverse investment teams will recognize the opportunities in new markets, new products and new entrepreneurs. We see this happening in Pittsburgh, a town that’s a lot like the majority of the country. Perhaps this is a trend that will move from a community like ours to the West Coast, instead of the usual movement in the opposite direction.

Read the other posts from this series:

Greg Sands – Focus on Progress, Not Perfection

Lisa Lambert Diversity & Inclusion is a Growth Story

Maha Ibrahim  Canaan Forward: Diversity as an Asset

Carmichael Roberts Being Different

Kate Mitchell Time’s Up – We Need to Fix This

Ray Leach Adding an Organic Approach to Diversifying the Venture Capital Industry

Andy Schwab Diversity Breeds Diversity