S1EP02 - Call Me a Charity One More Time with Kiki Freedman

This is The Capital Flex. I'm Naseem Sayani. This show codifies the capital playbook because no founder should have to learn the hard way. We talk about what really happens behind closed doors, the bias, the breakthroughs, and the things no one says out loud. If you've ever walked into a room and felt the system wasn't built for you, you're in the right place. Welcome to the pod. Today my guest is Keke Friedman. She is this co-founder and CEO of Hey Jane, a safe and discreet telehealth platform for abortion support, medication abortion treatment. Uh, and to date, Hey Jane has raised $13 million in funding and now operates across 23 states. Michigan was the most recent state that was added. Kiki and I met 3 years ago when she was raising the Roe round for the company, and after years of following the company, which she may not know, I was tracking it very closely. I finally, finally had the opportunity to invest via the SPV. That was launched, and I have to believe the whole SPV was a crew of very avid pro-choice supporters who jumped in and said, in the midst of Dobbs, I'm gonna put my money to work and make sure this company can be as fervently active as it possibly can. So I am so excited that you are here with us today. Welcome. Thank you.

I'm very excited to be here.

So I would love for everyone listening for you to introduce yourself and tell us a bit more about the company and where you're at currently in growth. And fundraising and all the things.

Absolutely. So I'm Kiki Friedman, co-founder and CEO of Hey Jane. We are building the most accessible platform for sexual and reproductive healthcare. We have focused so far primarily on abortion care with the abortion pill. So essentially allowing people to access this critical medication directly to their home, conveniently, affordably, discreetly, and with full wraparound support throughout, before, during, and after their treatment. We launched about 4 years ago. You mentioned we're in 23 states now. We've served over 85,000 patients. And growing by the minute.

I love it. It's so critical right now to have these services, especially, especially in the political environment we're in. I really appreciate all of the work that your team is doing and the kind of support and access it's providing to women across this country in such a time of need and, and care deserts. It's really tremendous. So thank you. As you know, the core mission of the pod is to codify the experiences and the insights from the legendary fundraising experiences that so many female founders go through. Some of them amazing because you get the check and some of them, uh, not so amazing because there's some deeply unfortunate experiences that happen, especially to women in these environments and in this ecosystem. So how would you overall describe your fundraising experience? And if you had to pick 2 or 3 words, what would come to mind?

So overall, I would describe the experience as interesting, dynamic, and creative. Maybe we definitely have encountered some barriers that I think are perhaps exacerbated in our space given that it is unfortunately a politicized form of healthcare, even though it shouldn't be. But I do think are relatively common. So, you know, just experiencing funds who may be really interested but legally unable to invest due to LP conflict or, you know, vice clauses in their own fund documents, even if those aren't explicitly outlined. Encountering investors who maybe just don't wanna broach the subject with their LPs 'cause they're not sure how they feel about it and how they, how they might react. And then I think some of like the really common things you hear about all the time in women's health, that it's too niche, that it's too small a market, you know, et cetera. Um, but because it is so strongly mission-driven, I've been really grateful of how we've been able to accommodate our funding needs and just getting really passionate, mission-aligned, vision-aligned, um, supporters on board.

So tell us if you could pick one, maybe one, maybe the vice clauses is the place to go. Like tell us. For the audience, if they don't know, tell us a little bit more about what a vice clause is and maybe one of those experiences where that came up and how you handled it. Like, what was the way to resolve an experience where the vice clause was maybe the hurdle?

Totally. So vice clauses generally are prohibitions that VC funds may have in, uh, the terms they've gotten from their investors on how the money can be deployed. So you see this often apply to things like, you know, I don't know, maybe alcohol, gambling, drugs, you know, guns, I think is one that comes up often. We do also occasionally see abortion care thrown in there. You can imagine this being the case if for whatever reason the investor, large Catholic university system, Middle Eastern sovereign wealth fund, may not, you know, be on board with, with the mission. So these can be pretty tricky. I think I would say as a piece of advice to folks going out to fundraise, like try to find this out early. I think that oftentimes people in initial conversation, just especially if you're starting those conversations with more junior VC team members, like might not even be aware of these because they don't come up like that often. I know that I spent a lot of wasted time getting deeper and deeper into the process with some folks only to understand that there was this hard stop all along. Your time is the most valuable thing. Save it. Like find this out upfront if you think there's a possibility it could affect you.

Would they not bring it up upfront? Would it not come up in a first conversation? Did they not know themselves that the buy-sell clause was there?

Yeah, so it definitely rarely came up proactively, and often sometimes even I'd ask, like I knew at some point to prompt it. And they say, oh no, I don't think, like, no way. Like, we don't have that. We invest how we want to. But then I, you know, they'd follow, they'd say, I'll look into it, uh, follow up. And, you know, and, and found that they did have that constraint in place.

It's fascinating that they wouldn't know themselves, and then you're just in cycles of diligence and it comes up maybe at the last minute.

Totally. I will share one promising story around this though, which is we did have a fund that was you know, really bought into the mission, like really saw the vision, had strong conviction, and they actually were able to spin out an SPV, a special purpose vehicle, to allow certain LPs from their fund to invest who wanted to. So they had a restriction against doing it through their fund, um, but we were able to work on this SPV and that was awesome. It also allowed like a little bit more direct contact.

That's great. So they were, they were more creative about solving and working around the, the vice clause.

Yes.

Was the SPV something that they came up with or something that you suggested? Where did it come from?

Yeah, that was their idea. I really appreciated it and they proposed it. That's when it was one of our first, first raises. So I think I had been like initially familiar with the idea of an SPV, but not in that kind of setting, like a spinoff vehicle. So it was a great idea that they had.

Oh, that's great. That's great.

Quick pause. I wanna shout out the team behind this show, Smart Podcast Solutions. Women are out there building companies, deploying capital, shaping markets, but too often our insights stay siloed. Jess and her team at Smart Podcast Solutions change all of that. They take one recording and turn it into a strategic content engine that actually amplifies your voice and your influence. Not noise, but real reach. Working with Jess and her team let me stay focused on the work while they scaled the, the conversations that mattered. If you want your voice operating at the level of your vision, talk to Jess and her team at Smart Podcast Solutions.

Now your business also, you have, you have this interesting benefit of macro moments, uh, that have really worked to HeyGene's advantage. It's where the row round came from. Tell us a little bit about how those things came to be. Was it very organic that you thought about raising the round in that moment, or what was the organic or not organic strategy behind those moments?

Something that we have experienced is that a lot of our moments of growth come from macro conditions that frankly we wish didn't exist, like really sad external circumstances like the fall of Roe. But in those moments, we do know that with the restriction of access more broadly, we need to expand to help fill that gap. And so that often has precipitated the need for additional capital to support that growth. We do also, of course, see in those moments people are really engaged around the issue. So that does often dovetail nicely. So with the fall of Roe, we were seeing a really dramatic surge in demand. We knew we were going to need to hire quickly to meet it. And so we did what we called our Roe round, where we were able to raise that $6 million from some institutional VC, but largely just really passionate supporters of the cause, either from prior rounds or new fresh investors.

It's really incredible, right? 'Cause there are these moments a lot. These things happen quite often, but you don't often see founders leverage the moments quite the way Hey Jane has. Uh, do you think it's just worked better given the type of company you are, or do you think most founders have an opportunity to do something like this and maybe aren't acting on it?

Yeah, I think most founders have an opportunity. I think the way it plays out can be different. Like our business is so influenced by like headline news cycles. Of course you see fads in VC all the time though. Now of course everyone is an AI company, right? Because they know that's what's needed to raise. So, you know, I think there's a spectrum in timing your raises around these macro moments and then also creating relevance to them, even if they may not be as obvious.

Has it also then affected maybe what you call your rounds? Have you has it given you room to maybe not have to live within the construct that we feel stuck to?

Totally. This has been a big thing for me because we have raised so much of our funding from, you know, is it, we've never had a lead investor. We have only done syndicated rounds.

No kidding. I didn't realize that.

Yeah. Yes. So as a result of that, we have not been forced into this constraint of raising very large rounds in chunks that tie to a, what, you know, a Series A, Series B, et cetera. I think that that has been an approach that has worked well for us. It is more work in the moment, absolutely, to raise more small checks, but it does allow you to raise what you need when you need it, which, you know, saves yourself, your team, and your investors from over-dilution. You're able to raise with more information on how you will deploy that capital, and it, you know, allows for more autonomy in who you take on as investors, which ultimately leads to more mission support in the long term.

So this is interesting. So, because typically one of the things that VCs do is you're, you're looking at the board, you're understanding the board construct, you're always asking about lead investors because one of the concerns is who is stewarding the capital with the founder? Who is, who is the oversight on all of, all of the fund growth? So tell us a little bit more about how did those questions come up during your rounds? How have you addressed it, resolved it? What's been the response? On those questions because they can often derail diligence, right?

Totally. It does come up a lot. And I think it's just kind of feeling out the investors that absolutely need that to feel secure in making their own investment versus others who can get to conviction based off their own diligence. And so of course, just focusing on the ones who are most aligned with your raise model. You can still create momentum just by the nature of the capital that you've have committed. And, you know, like getting really great angel investors who have tons of experience in this space and can convey a similar level of, or at least some level, you know, of credibility.

Yeah.

Yeah. I know it's so, it's so interesting because like I mentioned, the, the foundation of the podcast is to get into the really hard stories, but the story of Hey Jane actually skews more, much more positive, right? There's been, it's been a different way to fundraise, which actually has a lot more, more strategic moments in it than maybe other founders have been able to lean into, which is actually quite fascinating.

I shouldn't sugarcoat it. Like, it has been hard.

I get that.

No, 100%.

This is not an easy life, right? And, but there's, there are a couple of companies that have been able to do things quite differently than the norm. Uh, and, uh, and a lot of founders don't often feel like they have the room to do that is the macro point from it, right?

Exactly right. I think it's finding the ways to make, to make room for it for yourself. Like, we know that this system was not built for us. Instead of trying to like hurdle yourself over this wall and play by the rules of the game that just was not always built for what you know should exist in the world and is gonna be a really big, good business. Trying to like go around the wall, you know, or make your own rules where you can, getting creative to just find ways that you can maybe turn those challenges into opportunities.

Yeah. Yeah. No, absolutely. What, what have been maybe one of the two, one or two of the more gendered moments? That you've had across that journey?

I think two come to mind. I'll share one first just because it's shorter and funny, and I think it's so common from talking to other female founders. But being on a pitch, typically with an older man, and seeing them go on mute, start going like this— I know this is a podcast, so I'm doing sort of a waving gesture— and then seeing like their wife or admin or the closest female to them just start lurking over their shoulder where they are like, ask, like, just they feel ill-equipped to understand the topic. And this is actually a point that I think is important. Making them feel really comfortable when they don't understand it is important. And like, we should, it's fair that they don't know everything about women's health coming into it. And it is sort of on us to provide that education, even though it gets frustrating and tedious. At the end of the day, it's what, it needs to happen. But when it is just like, there's almost this like, I cannot possibly understand or engage in this topic and therefore I must outsource the thinking around it. I don't know. It's like, it hits a little different. But something that has been, I think, more salient and interesting and something that I've just like spent a lot of time thinking about. There's a stereotype of VCs always saying, we're making investments to change the world, right? Like we are building the future. And something that we have definitely seen is curiosity around why this is not a charity. Why what we are doing is not, is not a non-for-profit venture.

No kidding. Did you get that question?

Yes. Yeah. Frequently. Sometimes more explicitly than others, but it has come up a lot. And I think there's this really interesting implication there that like by solving this particular type of problem, like solving a really hard problem for women's health, for some reason, it, like, it's almost not worth solving from a capital perspective in the same way, like that it shouldn't be incentivized in the same way and that it is somehow you know, just like a different bucket of other forms of business, let alone other forms of healthcare, which are all at the end of the day, very similar. I think there's reason to be skeptical about the intersection of business and healthcare, but what we are building is fundamentally accessible and very high quality. So the idea that that in particular is called out as something that perhaps shouldn't be a, you know, a, a business is really bizarre.

It's really strange that they would separate doing good from making money or women's health from making money, which is such a, it's a deep-seated notion on what we're willing to pay for or capitalize or earn profit from, which I don't, I don't, and I don't understand where, I mean, I have an idea on where that comes from, but it's, it's a really strange way to think about it. How, how did you resolve that with people when it came up?

It depends. Again, I'll go back to this principle of like, if people are holding beliefs that suggest really deep-seated assumptions that are clearly just not aligned with our vision, it's generally just worth moving on. I think that finding the advocates who get it from the beginning is the best way to achieve your goals with the least friction and time wasted, um, for a founder. Not to say it's not worth like, you know, make investments, your time investments strategically. If someone had that type of an opposition, I would present my viewpoint like I did here, but if it didn't click, Just move on.

Right, right. So the, the insight really is that it's not— reeducating is not the place to spend the time, but really close the conversation, go to people that are more aligned, and don't spin the wheels, right?

I think so, yeah. Or like providing perhaps the education, but not the persuasion. Like, make a clear argument for it, but if it's not jiving with their viewpoint of the world, you're probably not going to change their viewpoint of the world in a 30-minute meeting. Just move it along.

Do you have a perspective on why these gender differences happen in venture? Like, what's the, what's the crux of why these big differences exist?

Yeah, I have some that are more generous than others on this. You know, I'm not an investor, I never have been. My understanding is, you know, a big part of it is, you know, of course, managing risk relative to upside. There is inherently more risk in investing in something that you know less about. Knowing something, having a personal experience with something gives you a sort of intuitive understanding that will de-risk, you know, the business or an investment. So given, you know, this is changing, thank goodness, but slowly, um, but given that most investors are still male and haven't experienced these things personally, perhaps there is some something there. But of course, a lot of it is just rooted in gender assumptions about who could be a good leader. I think a counterpoint to the one I just made is we do often see women going out to raise for a women's health business struggling and then seeing a man start the same type of business and they are able to raise.

They raise a lot of money. Yeah, I've seen that a lot. It's unfortunate. Have you seen any bits and pieces of change happening on this? Are there any points of light? Totally.

Even since I started Hey Jane, the number of female-founded early-stage venture funds has really increased. It's so awesome to see. Women's health-focused funds really, really growing. Just knowledge and curiosity about the space from non-specialized funds. I do think it's cyclical, but you know, especially, you know, sort of 2022, like in the COVID post-COVID time, there was more, more appetite there. So it's great. I think what we still do need to see is that progress shift downstream to later investment stages. It is still really concentrated in smaller checks, but as those funds mature, And the fund managers become more seasoned in raising, you know, subsequent funds. Hopefully that, that will evolve.

Right, right. The other thing that I know many of us are working on is the, the expansion out to the, I would call the legacy funds so that they understand everything that we are talking about so that it's not just the echo chamber that's after it, right? We do, we actually have to bridge these lines and cross the divides. And so there's, there's an effort behind that. It just has to, in my opinion, has to all, has to move a lot faster.

Completely agree. Yeah. And I'm glad to hear that those conversations are happening.

Trying. We're trying. We're trying. Yeah.

It's really good work.

If you had the 3 like big must-do points of advice for female founders coming into the space now, or peers of yours, what, what would you tell them? What do you wish you knew before you jumped in?

I may sound redundant cuz I think I've referenced some of these principles already, but understand what you truly need. From an investor, how much capital, like genuinely what you are going to use it for, and then like double that amount. But then also what you're looking for in terms of the types of support they can provide. Of course, things like expertise and connections are very valuable, particularly at the very early stages. I would not underestimate the value of just having someone cheering you on, particularly founders who have done it before. They have been some of the most meaningful investors, just angels who came in and provided that ongoing, just like, support. So knowing what you're looking for in those investors and how much capital is necessary, and then finding creative ways to get it. Like, don't be stuck in the traditional path. Don't feel like you have to follow along in these set milestones. The second is definitely just know that your time is your most precious asset. Don't waste it. Like, screen out people, screen out investors at the beginning in those initial calls. Pick up on what the rejection points are as you start to get past— is always ask and try to get that information and then be very transparent about those in the initial call. So in our case, you know, understanding LP conflict, understanding risk appetite around regulatory, I will be incredibly vocal about those, what the risk are, risks are, how we mitigate them. Yeah. But I want it on the table upfront so that we don't waste time on diligence that's not gonna go anywhere.

Yeah. Yeah. No, those are great. Those are great. It's good ones to keep in mind cuz you'll just navigate faster, right? And not get stuck. One question before we get close to wrapping, 'cause you mentioned it a few times. I always get questions from founders on where, where to find the angel investors, uh, and how, how did that work for you? Where did you find these great angels that came in earlier, came in later? What was the process? Was it something special or was it a, what was the secret sauce for you on that?

Yeah, so I'm going to acknowledge that in that area, I think I had a lot of privilege 'cause I just finished my business school program and a lot of the initial seeds came from there. But what I definitely found was most of it came from getting a few really engaged, like hyper enthusiastic angels to start, and they introduce you to others. And even maybe like will propose forming an SPV or a roll-up vehicle and helping you organize their network to support a raise.

Got it. Okay. See, it, it is, it is close in networks, right? It's people you knew already, people who trusted your ability to build something and understood the cause, right? It wasn't cold calls.

I think I may have done some. They're harder. I think that in a really evocative topic like repro can be, some of them did work, especially, you know, if you're able to make a really pithy subject line or whatever it might be. But for the most part, it was getting a few really solid enthusiastic initial contacts and getting intros to intros to intros to intros.

Okay. Yeah, absolutely makes sense. So to close this out, what What can everyone do to help your business? What can the listeners do? What do you need most right now that all of us can help support for you and for Hey Jane?

Yeah, I think biggest thing, spread the word. Check us out at heyjane.com. Follow us on socials, Hey Jane Health. And then we have a really cool program called the Unwhisper Network where you could sign up and get regular updates on the reproductive health and abortion landscape. We're always sending out ways to engage in advocacy or other local work to drive the mission forward.

That's great. Everyone can go do that. Thank you so much, Kiki. This has been great. I think the takeaways are immense and you've had such a, a really interesting experience with the fundraising, uh, both on the positive side and, and the, and the trenches. So I, I really appreciate your thinking and your guidance. This has been great.

Thank you, Naseem Sayani. Great to be here.

Thanks for listening to The Capital Flex. If today's episode hit home, share it with the founder you love and follow me on LinkedIn for more.