When it comes to increasing diversity in tech, the time to take action is…always. Given the scope of that goal, that means acting even if a particular opportunity happens to strike when you’re on vacation.
That was the case for Solv CEO and co-founder Heather Fernandez. It was late 2021, following a period of extraordinary growth, and the healthcare-booking platform was wrapping up fundraising for its Series C round. Everyone was ready for a well-deserved break. But what started as a celebratory call to investor and longtime friend Kara Norton of Upfront Ventures turned into an ambitious call to action.
Having discussed the longstanding issue of lack of diversity in tech for years, Norton and Fernandez decided to seize the moment through a different approach: re-open the round with the addition of a special purpose vehicle (SPV) designed specifically to add more women to the Solv cap table.
Knowing that more women (and specifically women of color) at the cap table would lead, in turn, to more investments in those same historically underrepresented populations, the SPV (dubbed internally “Project Captain Marvel”) set out to enable a diverse group of accredited investors to take part in a unique opportunity.
They tapped their networks, set some internal plans, and within 10 days, an all-female cohort of 75 investors had contributed $3.5 million to the SPV. Of that group, 60% were women of color, and about a third were first-time investors.
“When we started, we had no idea how much interest we would be able to generate. And we were, frankly, just incredibly shocked,” says Fernandez. “Because what really happens is when you start – when you ask the question, when you open the door to access – all of a sudden, all of these incredible women, who know other women who would love to be investors and get their first angel investment on the books – learn about it, and they all started pulling each other into this circle.”
Fernandez, who recently wrote about the SPV in TechCrunch, joined Greylock marketing partner Elisa Schreiber to discuss the process in detail and provide a playbook to others. Greylock has been partnered with Solv since 2017, and the firm led the company’s Series B.
Hi, everyone. Welcome to Greymatter. I’m Elisa Schreiber, I’m the marketing partner here at Greylock and we have a very special guest with us today: I am absolutely thrilled to introduce the Co-founder and CEO of Solv, Heather Fernandez.
Heather, welcome to Greymatter.
Thank you so much for having me Elisa. I’m excited to be here.
I’m really excited to have this conversation with you today.
Just to set the table, Greylock has partnered with Solv since 2017 and it’s been just an incredible story. It’s been incredible to watch your company as the medical booking platform has played just a really large part in transforming healthcare over the past few years.
You’ve been on the pod before, and today we’re going to unpack what was a pretty impactful decision that you made when you were raising your Series C. I think that many of the founders who listen to Greymatter will really appreciate hearing your strategy and approach, and I’m hoping that your story helps inspire other founders as they’re thinking about their own fundraising strategy.
But before we get started with that, I wanted to start with just setting the table. Can you tell us a little bit about Solv and just help everyone understand what your company does and who you serve?
Yeah, absolutely. So at Solv, the way we think about our purpose is to eliminate the stress around everyday healthcare. And what’s more stressful in the United States than our healthcare system?
The way we do that is pretty simple and straightforward and that is on the consumer side and through our app, we try and help consumers figure out where I should go for the problem I have, whether that’s digitally or down the block, when can I be seen and how much will it cost me?
Three questions that seem so simple, but are so incredibly hard in healthcare.
But the way we do that is not just by building a consumer app, it’s actually by building software for the innovators in the healthcare category and the innovative group where we have invested a lot of time and belief so strongly is urgent care. That software enables things like same day online booking, SMS-based communications, telehealth, all integrated or automated into their clinical workflows in order for them to provide a more consumer first healthcare experience. And so that’s the company that we’ve built and I’m proud to say that to date, we’ve helped over 50 million Americans experience a more consumer first healthcare through the product.
And how many clinics and hospital systems are using the platform. And what’s the impact for that set of customers?
The way that we think about it is in terms of national density. And so today, I’m super proud to say 150 million Americans are within five miles of a bookable, same day appointment right now. 80% of what’s booked through Solv is a same day appointment. And in a world where to get an appointment lasts anywhere from two to four weeks to actually get access to care, it’s a fairly remarkable stat.
And the way we think about ROI for the providers on our platform, frankly, is are we growing your business? And are we helping you engage in consumers in a more modern way that enables you to grow your practice? And that’s how we think about our success.
Well, on that point, you launched in 2016 and we’re lucky we’ve had basically a front row seat to your incredible growth since that time. You have been on our podcast before, you talked a little bit about some of the strategies and some of the growth that you were seeing, especially beginning in 2020 really, as a result of the COVID pandemic. And I know that, that’s shaped a lot of your strategy going forward.
Today, what I’m really excited about is to talk to you about a fundraise that you did back in 2021. You announced that you raised your $45 million Series C as a way to really accelerate that growth that you just described across your national network of providers.
The round of funding was led by our friends at Acrew Capital and Corner Ventures. And you’ve definitely put it to work, but you didn’t announce something as part of the raise in September. It is really a special initiative that you undertook. Will you tell us a little bit more about what came to be known internally as Project Captain Marvel?
I would love to share about it, Elisa, and because it was a really remarkable experience.
I have a good friend named Kara Nortman who’s at Upfront Ventures. She and I have known each other for 20 years. And one of the things that we’ve been talking about for those 20 years is How do you drive more diversity in tech?
We’ve both worked in tech for the bulk of our careers. We both are such believers in the power of tech to be transformative in people’s industries, in people’s lives. And yet, topics around enabling more diverse, underrepresented minorities, female founders – both on the investing side, as well as on the founder side – have still been somewhat elusive. Progress has been made. I’m an optimist and I’m a celebrator of forward progress, but I think a lot of us feel impatient.
And so really what happened was I called her when we closed our Series C (mostly so she could give me a pat on the back and say, “Good job, Heather.”) I was just about to go on vacation and she did say that, and she also said to me, “You know we’ve been talking about cap table diversity for a long time. You have incredible investors today. Why don’t you try and make some space on the cap table? And let’s create an all-female SPV right now and we’ll do it over the next couple of weeks. And if you say, yes, I’ll help you make it happen.”
As a founder, what we try to do – all of us – is raise money from great people who can help us build transformative companies. And the reality is, as a founder, you want that to be as easy and as quick of a process as possible. For a number of reasons, the most important of which is you want to get back to work. So we did that. We have an incredible cap table with Greylock, Benchmark and then Acrew and Corner. Theresia Gouw has been a real leader in terms of diversifying cap tables in her career as an investor.
And at the end of that, when we said, “Well, let’s do an SPV,” It was actually not something that I’d thought about because Special Purpose Vehicles (also known as SPVs) have been around for a long time. They’re used in all sorts of ways in more traditional investing.
However, I had not heard of an SPV just effectively being a group of people that you put in one vehicle focused on something like enabling cap table diversity, enabling a more diverse group of accredited investors to set in on an interesting investment opportunity. And I’m certain it’s happened, but it’s not commonplace and it should be.
“I’m an optimist and I’m a celebrator of forward progress, but I think a lot of us feel impatient.”
So how did you set about doing this? You and Kara have this mind meld and you say, “You know what, it’s really rare to get access to the kinds of investing opportunities that Solv could offer given the stage, your metrics, your growth, the strength of the company. How do we help democratize that access to women?” And particularly, I think women of color was a big part of the strategy, which I’d love for you to talk more about. How did you do it? It sounds like a lot of hard work.
First off, I actually said no to start because I was exhausted, if I’m being totally honest. And I thought, “Man, that sounds hard and I don’t have a playbook to follow.” We talked at the end of that weekend. I said, “Are you sure that you want to do this? Will you help me do this?” And as soon as she said, yes, we were off to the races.
The first thing that we did: our orientation was we wanted to enable women on Solv’s cap table. The vast majority of our buyers of our product and users of our product are women. So we wanted to enable women and we had a specific focus on women of color. As you think about access to interesting investing deals, access to cap tables, again, there has been movement, but women first and then women of color as our focus area.
And what we decided we would do is we would email or text all of the known female angel investors in our network and in doing so we would ask them, “One, are you interested in learning more about this? And if so, please add one person from your network focused on women of color in particular, or first-time investors to enable them to come and listen to the pitch and decide if they wanted to be involved.”
And frankly, we have no idea how much interest we would be able to generate. And we were, frankly, just incredibly shocked. Because what really happens is when you start – when you ask the question, when you open the door to access, all of a sudden, all of these incredible women who know other women who would love to be investors, and get their first angel investment on their books and learn about it – they all started pulling each other into this circle.
And so frankly, I owe Kara Nortman so much for encouraging me to do it. I owe my team so much because this came, remember, after we’d closed, after we decided we’re done. So for them, what it meant was another two weeks of cranking in order to do the pitch, set up the SPV, get all the allocations, and work with a third party.
And so as a result, we created a bit of a playbook just to normalize that one, this is possible. And two, frankly as founders, you have the opportunity to live your values through your cap table in a way. And so that’s what we did.
Another question this raises is what were the conversations like with your existing investors when you went to your board and said, “This is something I want to do.”?
It’s obviously going to take time. Your first reaction admittedly was, Wow, that sounds like a lot of work. So how did you think about the trade offs between yes, it’s a lot of work. It’s going to take a lot of focus. I actually just finalized this raise. So you didn’t quote unquote “need the money.”It was something you were doing to advance the mission and advance like just diversity and tech. So what were the conversations like with your existing investors and how did you get everyone’s buy in that this was the right thing to do.
That’s right. I will tell you it was not hard at all, again, because it’s a non-standard conversation. I wasn’t actually sure how they would react, but I have an incredible board, all of whom care a lot around driving innovation and diversity and new ideas in tech. So James Slavet from Greylock, Bill Gurley from Benchmark and Theresia Gouw from Acrew all on the board and they all said, “Go to it.” Of course I said, “I’m going to cap the amount of time.” I’m not going to let this slow the fundraise in any way,” because there’s obviously a lot of wanting to get the deal done. You want to get done, you want to close the financing, and move on.
And so I was clear on how we were going to execute with guardrails to make it happen. And then Theresia Gouw, I will tell you, she gave me a piece of advice because she’s someone who has done quite a lot in this category. And that was to reduce the minimum.
I’ll talk about this as part of the playbook, but typically with angel investments, what you see is a $25K minimum. Not always, there’s no rule, but I think it’s fairly standard that that’s the number. And her advice to me was get rid of that minimum. You’re creating the vehicle. Your objective is to enable more people who have not invested before to invest. And so reducing that friction to make that an easier thing for them to do benefits your objective and she was so right.
Also, John Kennedy from Corner Ventures, who was our newest add to the cap table and co-led the round, was pumped. And so the reality is my investors were like, “This is cool. Okay, go do it.” And so I just think that’s worth saying, because again, as a founder, you want to get it done, you want to do it right. You don’t want to mess anything up and they were all in. Back to you.
That’s fantastic. Yeah, no, I think it’s important because I think founders need to hear how you worked with your board and your existing investors to get everyone aligned that this was the right thing to do. And that this was the goal and this is how we were going to do it.
But to that end, the advice you got from Theresia around minimizing the buy in minimum, also the goal of that was to maximize the pool of available participants and in doing so that clearly also creates complexity around the amount of people who are working with the lawyers and the accountants and doing all the back office stuff.
So you mentioned that you partnered with Kara Nortman (mutual fan club over here as well), and that she was a big help in kind of getting this whole thing started. But I know there’s a lot of hands-on logistics as part of setting up the SPV, so I was hoping you could share how you approached that as a founder, and how you found the support and the right resources to make this notion a reality.
That’s right. The last thing that you want as a founder is more back office admin. So I would put this as a requirement, that you must identify the right external party or basically back office of your special purpose vehicle in order to execute this in a way that doesn’t overburden yourself or your team. In our case, we worked with the AQP Family Office. This is a relationship that Kara Nortman had: someone who was aligned with the objective of what we were trying to do around enabling more cap table diversity.
We sat down in advance of actually kicking this off to make sure that they were aligned on the work to be done, which of course is all of the admin, all of the paperwork, all of the filings that will happen ongoing. And we just want it to be crystal clear around what was expected on both sides before we said, “Go.”
In our case, it was a family office. Carta has a product that’s available for SPV, AngelList has a product, but I do think it’s incredibly important to identify that, frankly, or else your team will be very frustrated with you when you try and execute something like this.
You mentioned earlier too, when you were talking to your board that you really clearly articulated what your boundaries would be in terms of moving forward with this process. Can you tell a little bit more about how you set limits for this? How did that benefit the process to set those limits in advance?
I was coming off of a fundraise – off a stretch of working with and pitching institutional investors, and I was super eager to get back to work in the day-to-day of running Solv. And so the way we thought about it was we were going to reduce the minimum and therefore any dollar amount would be okay. And we wanted to complete this in two weeks.
So the way that we did that was we put a two week deadline on ourselves from kickoff. We created our first list of angel investors, asked them to invite other women in their network who are accredited investors. We set two Zoom meetings. And were available via email for back and forth in Q and A, but decided to restrict any one-on-one meetings as part of our core play. And then we established a clear go, no go date. And the reality is we lost a lot of people because we ran it under such a tight timeline, and that’s okay. For our objectives, diversify the cap table, bring in more first time investors, do this on a tight timetable so that we could get back to work because frankly, we didn’t anticipate doing this SPV when we started the fundraise, that was the right thing for us. And so that’s how we executed it and it ended up working out very well.
Did you set any limits in terms of the number of investors that you were going to allow to participate?
We didn’t at the start. We started getting a ton of interest, and we ended up capping it at 75, somewhat arbitrary. But at some point it became clear that the longer we let it go, the more people we would get and potentially we would risk our own timeframe. So 75 ended up being our number, which I don’t even think we’ve said this yet. We ended up raising three and a half million in this SPV. 60% of those were women of color, around a third of those were first time investors. It was really remarkable.
One thing, Elisa, worth sharing is when we did these Zoom meetings, it was so different than my institutional meetings because I was looking at users of the product. We call our user Mary, a mom of two kids. We think a lot around how she thinks about everyday healthcare for herself and her family. And I’m looking at these women who are nodding, not just at the vision, but at the business that we’ve created and it was just incredible.
Of the women who participated, are many of them also operators and working? So they’re working parents and so I would imagine that the product itself speaks to that demo as well? People who are busy, who are trying to provide for their families, but also have work and other constraints?
A very busy working mom, absolutely. Everyone from Kerry Washington, who I guess I don’t have to describe who she is, to Jen Tejada at PagerDuty and Katrina Lake, founder of Stitch Fix, and a number of active full-time operators, and the list goes on and on. And then an equally large and larger list of women who you wouldn’t actually recognize their names yet. They’ve been very successful in their career. They will continue to be successful. And frankly, we ended up being their first angel check. And that was just incredible.
You talked a little bit earlier about the decision to reduce the minimum and how that enabled you to open up the pool. I’d love to also hear a little bit about the process of how you got these angels who were interested and how you do the pitch meetings. Did you use any tools or any mechanisms to help vet people beyond just the Zoom calls and word of mouth introductions?
Well, obviously you have to be an accredited investor to participate, so that was one. Our first group of vetting was our personal networks. And so they’re vetted based on our many decades of experience working with incredible operators. And then frankly, they were the referral for the next group that we didn’t know yet. And that expansion of the network through those trusted relationships is really what led us to complete this SPV and so quickly.
You ask about tools and what good operator doesn’t love talking about tools. It’s really important to figure that out, actually. For us, for the applications, we use Google Forms, where you could submit how much you were interested in for an allocation if you were in. To process questions internally with our team, we use Slack. For the virtual road show, we use Zoom. To keep track of all of the prospects who then converted to investors, we use Airtable. Having your suite of tools available and at your fingertips was an important part of making this efficient for us, frankly, which is incredibly important.
And then how are you thinking about investor updates for this group of new investors, and what kinds of touch points will you have with them? And frankly, this may be just me projecting, but I can see a world where this group of first-time investors becomes a community in and of themselves. How are you helping foster that connection between the investors who participated in this?
Yes. This is an area that I’m still in progress. The reality is after you get backed from a fundraise, as you know, with all of your founders, you get right back to work. And so what we’ve done to date has really been organic between email updates, people texting on Twitter. It’s been a bit more of an organic expansion of my investor network.
What I aspire to do frankly, is to create more of a community. And whether that’s meetups periodically geographically because part of my personal objective is to create more founders and more investors. And cap table diversity diversifies wealth creation. I’ve said this before, prior to Solv, I was a long time executive at Trulia. And if not for being on that Trulia cap table, I wouldn’t have started Solv. And so creating a community that supports the creation of more diverse founders and investors is part of the objective. I don’t get an A plus on that one yet, we’re working on it.
Well, I’ll tell you what I’ve heard from you throughout this whole conversation, how much it was really a group of people that collaborated with you to make this SPV happen. I’d be happy to help you host a power breakfast or some other meet up with the investors that have joined the Solv cap table. I think it’d be fun to get everyone together.
Let’s do it. Covid made it hard as well, to be fair.
Yes, yes, yes.
We’re not the only ones. There are a couple others that I’ve heard of, what I aspire to is this to be more normalized as part of the process. So it’s not quite as frantic as our experience, but before us, Phoenix is a really interesting company where they committed, I think it was 10% of their cap table to Latinx investors. I’ve heard of a couple of other ones and I’m not 100% sure if they’ve closed, so I don’t want to name them. But I have heard this more and more. My great aspiration is recognition by founders and investors that this is an option. This is a viable option that you can think of as part of your overall financing process. That to me would be a huge win.
Well and that it’s doable and this is how you do it, right?
Yes, that’s right.
If you want to diversify your cap table and do it via an SPV, you had no playbook when you were doing it, let’s give people a playbook. What are the six things that people should focus on?
Well, we made so many mistakes and my hope is that this playbook is helpful to the next founder or investor who’s looking to use a SPV to diversify their cap table.
So first I would say commit to the plan upfront as part of your fundraise. Decide what you want to do, speak to your board about it, build it into your internal team’s plan, so it’s not a last-minute scramble as it was for us.
Number two, tap your networks. As founders and entrepreneurs, you have an incredible network already. So whatever the purpose of your SPV is, you likely already have the people in your network to help you get there. In my case, Kara Nortman from my network was an incredible driver and then tapping our first network of angel investors was an important part of our success.
Third, you need a back office success partner. Ours was AQP as I mentioned, Carta and AngelList are great options and I’m sure there are others, but line that up in advance.
Fourth for us, set limits. In our case, the limit was time. In your case, the limit might be dollar invested amount, it might be time, it might be number of investors, but establish what that is upfront to prevent the chaos that can ensue later on, if you end up being quite successful, actually.
And I think the last one – and this was one that specifically worked for us – is reduce the minimum. I was scared, but with the right tools, with the right success partner, with the right people in my network working to make this happen, reducing the minimum just opened up access to people who otherwise might be more intimidated or not actually be, have the financial capacity to write that bigger check. So as long as you have the back office and the tools set, it’s very possible to make that happen. So those would be my tips in my playbook.
“My great aspiration is recognition by founders and investors that this is an option. This is a viable option that you can think of as part of your overall financing process.”
It’s a great set of tips.
I just want to end on some broader perspective from you if you don’t mind because your story is so compelling. You’re a founder, you’re a mother, you’re a very busy person, a very active person. We’ve talked a lot about the structure that you put in place to ensure that you could continue to run your business and build your team and do all the things you needed to do for Solv while making space for this SPV. But it was still a tax on your time and on your energy to do this. So I think it would be helpful for our listeners to hear a little bit about why you did it.
What compelled you to focus some energy on realizing the SPV?
Elisa, I am just so aware of the incredible opportunity that I have as a founder. I have certain beliefs – that is, that diverse investors lead to diverse investments, which lead to diverse executives, and that has proven to be true in my own life. And I think it’s important to try and create more of that. So in my case, it was worth doing and I have the privilege to do it. And so as I look across leaders in business, I always have so much respect for those who use their platforms to push forward progress, whatever that might be, whether that’s running for office, whether that’s focusing on a particular cause or initiative. And this was my way of doing that. And so it was the right thing to do. I had the opportunity to do it. So of course I should do it.
Heather, this story is so inspiring. I remember when you first told me that you were doing this and my heart burst, it leapt out of my chest. I was so happy that you were taking your platform and your position and your influence in Silicon Valley to do something so meaningful for an entire group of women that would frankly not have had access to something like this in the past. So thank you.
And I think, secondly, the generosity you have in sharing the story with the broader venture-backed tech ecosystem and enabling and empowering other founders to now have a playbook is just, I’m incredibly grateful for it. I’m sure there’s many founders who listen to this podcast who are going to be incredibly grateful for your insights as well. So thank you for taking time out of your day, to share the story with us, to share your playbook with the broader ecosystem and for spending the time.
Thank you so much for giving me an opportunity to do it. The reality is it’s a little selfish. If more people have a playbook and are able to execute, driving more cap table diversity as a normal part of their raise, that will have been a huge success. So thank you 100 times. I love talking to you, Elisa.
I love talking to you too. Well, unfortunately though, this does wrap up this episode of Greymatter. Even though I could talk to you for hours.