Kimmy Paluch is the Founder and Managing Partner of Beta Boom, a pre-seed fund that invests in software companies serving the rising majority and provides a unique post-investment model that increases the likelihood of successful outcomes by providing daily tactical support and coaching from product, marketing, sales, and fundraising experts.
FWM: How is Beta Boom giving a boost to overlooked entrepreneurs?
Beta Boom’s focus is on the rising majority in the U.S., comprised of today’s ethnic minorities and women. Traditional venture capital has largely excluded these groups with just about 1% of venture dollars going to Black and LatinX led companies, roughly 14% to mixed-gender led companies and only 2.4% to all women-led companies. These low numbers fly in the face of logic as the data proves that diverse teams perform better by 36% increases in earnings and that women-led teams also provide higher returns on investment. We are unlocking this untapped potential by not only focusing on this group but, by extension, specifically on technologies that serve this demographic, which represents over $4.3T of spending power in the U.S. for Black, LatinX, and Asian consumers and 84% of spending power for women.
Beyond our investment, we leverage huge amounts of social capital and human resources to help our teams succeed. Additionally, we are able to discover under-the-radar opportunities, because we look beyond traditional hubs like Silicon Valley, and our investment process has been designed to reach and evaluate potential companies by measuring the potential of the team in a more holistic way instead of relying on superficial markers of pedigree, such as whether the founding team attended a top-tier university or worked at a Fortune 100 company.
FWM: Tell us about Beta Boom and how it does more than invest in start-ups.
From the outset, we recognized that money alone is not enough. Empirical data shows that the correlation to success from investment is connected more to the human and social capital that is invested. We have really leaned into this as a firm. The way that we close the many gaps in venture is by a combination of monetary investment, time, expertise and social capital. When we invest in companies, we surround them with a team of coaches and a bench of experts that work with them daily to build internal capacity, close access gaps, elevate operational efficiency and better navigate the biases that they face downstream. This combination of capital and a hands-on approach has been transformative. A key piece of this is our coaching methodology where we guide our founders versus telling them what to do. We see our platform as an enablement platform as no mentor or advisor has all the answers. We’ve found that our coaches have been able not only to help teams to perform better, but also to build founder confidence, boost flexibility, stimulate creativity and engender bigger objectives; all elements which are essential to navigating the twists and turns of the entrepreneurial journey.
FWM: What surprises you the most when working with start-ups?
The most surprising (and inspiring) thing about working with startups has always been the incredible resilience that founders can show. Starting and running your own company is one of the hardest things you can do, and it’s always incredible to see the lengths founders go to keep their ventures and dreams alive. It’s an incredible journey of belief and risk-taking to overcome a problem that is typically very personal. For us, we’ve always likened the journey to sports where you have to push yourself to physical and mental limits to overcome great challenges. In many ways, we’ve adapted our methodology from the great sports academies that surround budding athletes with a team of coaches to enable awe-inspiring achievements that test what we believe is possible. It is an emotional journey of strength but as I always say “we’re stronger than we think we are;” our founders prove this mantra almost every time.
FWM: Can you share a few success stories?
Our top-performing portfolio company is Fiveable, which is one of the world’s top social learning platforms. Fiveable currently provides interactive social learning for high school students taking Advanced Placement courses and exams. They’ve also recently expanded to support college preparatory programs. Last year Fiveable reached over 3M high school students out of the 4M students taking the AP exams.
Fiveable has won numerous awards and raised over $3.5M in seed funding from top investors including Serena Ventures (Serena Williams’ fund), BBG Ventures, SoGal Ventures, Matchstick Ventures, and Metrodora (Chelsea Clinton’s fund). Fiveable is led by an incredible, inspiring and diverse founding team, including Amanda DoAmaral, a former Teach For America teacher and Tán Ho, a startup marketer that has fostered remarkable community growth. They are based in Milwaukee, Wisconsin.
It’s been so fulfilling to be a part of their journey from just a few hundred students and the small founding team to where they are today.
FWM: Tell us about your pitch competitions.
We have had several pitch competitions throughout our company history. In 2020, we had our own portfolio companies that were going through a cohort-based program pitch against each other to win bragging rights and $10,000. We had two of our teams win: The List and Nodat. That same year, we also had our first Friends and Family Pitch Competition. The competition was targeted at very early stage companies across the U.S. that were led by women. Along with a $5,000 prize, the intention was to provide visibility to rising tech companies.
During 2021, we have teamed up with GET Cities and P33 Chicago through our New Pattern initiative to run monthly competitions for companies based in Chicago that are led by female, Latina or Black founders. Like the Friends and Family Pitch Competition, this series is intended to give early stage capital ($20,000 for the winner) and a platform to boost visibility of many companies across the Chicago region. Additionally, all finalists are supported through coaching, connections and a network of support that goes beyond the monetary winnings.
FWM: How is Beta Boom evolving?
Beta Boom is always evolving in many ways. At the core, we like to experiment a lot. We embrace and live the startup approach ourselves by questioning everything that is status quo and always asking ourselves what we can be doing better to continue to drive phenomenal returns, reach promising founders wherever they are, and support our existing portfolio companies.
Please share your social media handles/video
Twitter: @betaboom | @kimmypaluch
Instagram: @betaboom
