SEATTLE, WA – We are thrilled to feature an exclusive interview with Kathleen Baxley, who joined Mastersfund as Chief Financial Officer in January 2024. From her early days studying English literature and math to her extensive experience in equity research, entrepreneurship, and financial consulting, Kathleen brings a unique and multifaceted perspective to Mastersfund. Read on to discover how her diverse background has shaped her commitment to supporting female founders.

Interview with Kathleen Baxley

Can you please tell us a bit about yourself, your studies, experience, and expertise?

Kathleen Baxley: I’ve had a lot of different experiences, including business development, equity research, starting a restaurant and a cashmere business, and more recently, advising other startups. While these roles may seem unrelated, they share a common thread – a curiosity around how businesses work and how they make money.

At Colgate, I studied English literature and math. I got my MBA at Stanford with a focus on entrepreneurship and finance. Realizing that I have a somewhat unusual combination of left brain and right brain skills, I looked for roles where I could use my math and business knowledge in a creative environment. That led me to magazine publishing. As circulation director for three magazines and researcher on targeted industries/markets for new business opportunities, I got a deep education in subscription economics and business models. After my time at Stanford, I followed my interest in the intersection of strategy and finance by becoming an equity research analyst for Oppenheimer, JP Morgan and Equinox Capital, with roles on both the sell-side and buy-side. I had the good fortune to cover the healthcare industry at a time when the industry was in flux as payors, users, providers, and the government were experimenting with new funding models and incentive structures. It was an exciting time and our institutional investors looked to us for guidance on the impact of changes in the political and social winds to company valuations.

After 15 years on Wall Street, my partner bought a hotel on Whidbey Island near Seattle, WA. We moved there to fix it up. It was a bit of a shock, as I shifted my focus from rounding to the nearest billion to watching every penny! But, I caught the entrepreneurial bug. I enjoyed starting this business on my own. Because it was cold and wet on the island, I launched a Cashmere business so I could be warm with style. At the same time, I began consulting with other female founders, helping them to model out their businesses.

What gets you up in the morning?

Kathleen: Working with other founders gave me so much joy that I chose to devote all my energy there. Lots of women were asking me to help with their finances and I discovered that this was way more fun for me than running just one business. So I became a fractional CFO for women-owned startups. There are obvious externally imposed hurdles for women that we all know about. But women have also been socialized to sabotage themselves. Frequently, they lack confidence because of low financial literacy. These were problems that I could help them solve. Over the years, I’ve helped hundreds of company owners how to estimate their cash needs in a world of massive uncertainty and how to find appropriate funding. Seeing my clients grow made me aware that I could do much more to help level the playing field and have a big impact in the female startup ecosystem. Satisfaction in their success and learning from their challenges still makes me excited to start each day.

Over the years, I grew increasingly aware that the existing VC model was not well suited to many businesses. They get crushed under the pressure of a hyper-growth model. I know there are plenty of reasons why businesses fail. I don’t want poor financial planning to be one of them.

Why Mastersfund? With all you’ve accomplished, many funds and companies would be eager to have you spend your time supporting them. Why do you choose to put your efforts in to support Mastersfund?

Kathleen: Gillian is a leader in the Seattle startup community, and we got to know one another over the years. I was honored by the opportunity to consult with her and Anne on the financial model for Mastersfund as they worked out the details of their non-dilutive redeemable notes. Together we developed a detailed model that helped clarify the fund’s strategy, understand success drivers, and identify performance metrics to optimize investor returns. As I got to know Anne and Gillian and watched them implement their innovative funding strategy, I saw the potential to expand on my advisory role by evaluating company finances in the due diligence process and eventually invested my own capital in it to help more women founders.

In January 2024, I assumed the role of CFO at Mastersfund, covering both day-to-day finance and the financial implications of long-term strategy. I look forward to building on the existing financial infrastructure to manage growth and mitigate risk as we scale up. We are automating many of our financial management tasks so that we can focus on fund strategy and the development needs of our portfolio companies. I have created screening tools that allow us to home in on potential portfolio companies that have the best prospects for note redemption and future equity positions. We have established strong due diligence protocols and are expanding our ability to monitor company performance and track investor returns.

The fund ticks off several boxes on my personal priority list – working with smart, diverse colleagues, expanding financial literacy for female founders, creating financial systems that can yield attractive returns to investors, and pushing my boundaries with new ways to solve problems. I feel like I’ve found a good fit with the fund’s people and mission.

What are you reading?

 Kathleen: I’ll give a shout-out for Medium.com. It’s a reliable source of insightful information that is relevant for my work-life and interests. Because I am constantly looking at new industries, investment ideas and ways to do things better, I frequently have questions about random unfamiliar topics.  It gives me different perspectives and helps me frame my thought process for further research.

What one thing do you want our readers to know about you?

Kathleen: I’ve been an avid puzzler my whole life. As a teenager I would compete with my older brother to see who could complete the NY Times crossword fastest. It was a highlight of my life to participate three times in the American Crossword Puzzle Tournament. I finished in the middle of the pack, but the mere act of competing made me feel like I had found my personal version of a Star Trek convention. Today, solving financial puzzles as the CFO at Mastersfund, I get to do what I love – helping women grow their businesses. The success of our portfolio is the best way to improve gender equity in investing.