Women can use their growing wealth and influence to build the world they desire through investing in new innovations and companies, believes Trish Costello, founder and CEO of fintech company Portfolia.
Smiling during a video call from her home in San Francisco, Trish Costello, founder and CEO of fintech company Portfolia, talks passionately about her digital mission. "We bring investing into the 21st century. Our goal is to create a global community of women investors who can back the companies and innovation they want.”
Women need to use their growing wealth and influence to build the world they desire, otherwise their wealth will have no power, she states. “If women want new innovations and companies in the world that specifically address their needs, they need to become investors.”
The firm manages venture capital (VC) funds investing in entrepreneurial companies “focused on areas of high returns and impact", explains Ms Costello, who has more than 30 years’ experience as a venture capitalist.
Her brand is especially associated with investing in women’s health, having launched “the first ever” venture capital fund focused on this area in 2018.
"We are the largest and single most active investor in women’s health now in the world,” adds Ms Costello. She is also co-founder and CEO emeritus of the Kauffman Fellows Program, a non-profit aimed at identifying, educating, mentoring and networking future venture capitalists.
Today, as part of its range of strategies, Portfolia manages five women's health funds, investing in private companies from seed to pre-IPO stage, providing solutions to various areas of women's health. These range from osteoporosis, heart health, menopause, sexual functioning, fertility, childbirth and birth control to all women's cancers. Largely neglected and under researched, “the menopause is now one of the largest fields of investment in women's health”, explains Mr Costello.
Returns opportunities in these areas are “almost unlimited”, she says, pointing out that many women’s healthcare needs have not yet been addressed.
In 2022, the performance of Portfolia funds focused on women’s health/longevity ranged from 5 per cent to 20 per cent gross IRR (internal rate of return).
The firm’s investments include multibillion dollar companies like Maven Clinic and Everly Health, but its core investments are start-ups. Bone Health Technologies, one of the company’s first investments, recently received approval from the U.S. Food and Drug Administration for its OsteoBoost Vibration Belt, a bone-stimulating device using Nasa-developed tech to help prevent osteoporosis. Another investment is Your Choice, the first male non-hormonal daily contraceptive pill now in human trials in London.
Women spend 25 per cent more time in “poor health” than men. Addressing the drivers of this gap – including lower effectiveness of treatments for women, worse care delivery, and lack of data – would not only improve the health and lives of millions of women, but could also boost the global economy by at least $1tn annually by 2040, according to McKinsey.
Customising investing experiences
Each of Portfolia’s 15 venture capital funds - managing a combined $65m in assets - aims at advancing innovation in a specific area of focus, led by a team of expert investment partners in that field, mostly women. Unlike many VC funds, often backing the 20- or 25-year-old engineer out of Stanford, “the Mark Zuckerbergs of this world”, more than 60 per cent of entrepreneurs which the firm backs are women, mainly in their 40s or 50s.
“These are experienced operators who have the networks and knowledge to build companies, and understand the market, which gives us better results,” claims Ms Costello. The VC money raised by women founders and co-founders in the US was only 23 per cent of all VC money in 2023, albeit rising versus 2022, according to a report from Pitchbook Data and Deloitte.
In addition to women’s health, the firm’s investment priorities include active ageing and longevity, food and agtech, sustainability and climate change, as well as backing “people of colour and marginalised communities.”
These investment themes strongly resonate with women. “Research shows women want to invest in areas they have a passion for, and feel will impact their lives,” she explains.
Women are creating wealth at a faster rate than any one time in history and faster than men. In the US alone, an unprecedented $30tn in assets will shift into the hands of women by 2030, according to McKinsey. "But none of the investment processes or systems have ever been built around women," says Ms Costello, adding her firm's “unique proposition is to customise investing experiences for women”.
The firm offers investing classes and educational events, networking opportunities with “other like-minded powerful women, thought leaders, influencers and entrepreneurs”, as well as participation opportunities in every stage of the cycle, allowing limited partners to join monthly pitch calls per fund. “Investors can be at the table when partners make their investment decisions, which is unique.”
The low minimum investment threshold set for these venture funds, just $10,000, is highly appealing to women. Ms Costello wants to make it “as simple as possible for women to dip their toe in and get started as an investor”.
Women are more likely to save and less likely to invest then men, according to research, while investing in venture capital is a “new concept” for them.
“Women want to invest in what they know, or when they have a passion, which also explains their higher performance.” Most investors in women's health funds are gynecologists, physiologists and cancer specialists.
Finding new investors is “one of our greatest challenges”, she says. They are mainly located through referrals of existing investors or through partnerships with women’s organisations and leadership groups. The firm also works with independent wealth managers and large private banks, helping them meet needs of women clients.
High-risk investment
While the platform is designed for women, currently 12 per cent of its investors are men interested in “unique investments that generate good returns”, she says.
“In San Francisco, you can drive down Sand Hill Road, and everybody's investing in AI companies, valuations are going through the roof, and investors know that,” she explains, referring to the arterial road in western Silicon Valley, California, famed for its concentration of venture capital firms.
Portfolia currently has 2,500 clients investing actively in funds, collectively owning $10bn of wealth. Its larger community of accredited investors, yet to invest in funds, own $95bn in wealth.
While there is growth potential for this asset class, venture capital is a high-risk investment, admits Ms Costello, with returns taking longer to materialise. Healthcare investments in particular are expected to take a longer time to maturity, as they must prove safety and efficacy, with many requiring FDA approval.
In this context, resilience of the team is key, she says. “Often, these firms may be the first of their kind to go through the whole regulatory process. Building companies take time and fortitude. For a lot of those companies there is not a roadmap yet, they are creating it.”
