PHYLLIS NEWHOUSE HAS THE information on 4 TV displays earlier than her desk in a glass workplace tower. By means of the window behind her, past the manicured gardens of a mansion as soon as owned by Tyler Perry, a haze hangs over downtown Atlanta. She’s going through the displays moderately than the skyline: Kabul has simply fallen to the Taliban, which is of curiosity to Newhouse not simply because she served for 22 years within the U.S. Military. She additionally runs a 6,500-person cybersafety agency, whose purchasers embrace the departments of Protection and State. “There’s much more cyber fallout than you’d count on,” she says gnomically.
Her firm, Xtreme Solutions, is busy making ready its purchasers for a possible surge in digital assaults. Newhouse can be on a Zoom name with three girls planning a management presentation by girls veterans to a gaggle of high-net-worth female entrepreneurs. In a second, she’ll look down at her cellphone to textual content the actor Viola Davis, a pal and enterprise associate. She is extraordinarily in her element–so calm that solely in hindsight would you name what she’s doing multitasking.
And Xtreme Options is hardly her solely gig. She’s the CEO of a enterprise referred to as Athena, which she took public this 12 months, making her one in all a only a few Black girls whose firms are traded on the New York Inventory Trade, and which not too long ago signed a merger deal that valued the corporate at $2 billion. She sits on the boards of 4 different firms, nonprofits, and organizations. She has managed greater than 20 investments in startups, together with Airbnb and Peloton, often by teams inside her community, typically teaming up with a significant enterprise capital agency. She’s an LP in two early-stage VC funds. She co-founded and runs a nonprofit group. She formally mentors 5 younger professionals.
But Newhouse is not merely a super-achiever with an A-list Rolodex. While you dig into her ventures, a mission emerges. The funding teams she manages largely comprise girls. The LPs? Run by girls. The nonprofit? Based with the intention of uplifting girls. And now she’s seeking to deploy the management talents she honed within the navy, her mentorship expertise, and her monetary acumen to attain one thing actually radical for girls, notably girls of shade, perennial outsiders on Wall Avenue and in boardrooms: Give them actual energy.
For Newhouse, it began with household. Private relationships, she’ll let you know, come first. Her childhood was one in all laborious work, navigating difficult relationships, and discovering her personal identification because the youngest woman of 11 youngsters. The ability of sisterhood was an immense early power, every sister a lot adored by younger Phyllis. Their households are a part of her inside circle–and she has 80 nieces and nephews.
That inside circle is dotted with highly effective feminine founders from the Girls Presidents’ Group (WPO), politicians, athletes, and Hollywood figures resembling Davis–the youngest actor (and solely Black actor) to win an Oscar, an Emmy, and a Tony Award; the 2 co-founded a nonprofit. Newhouse can be friends with tennis nice Serena Williams, who’s bummed she missed the possibility to spend money on Newhouse’s first public providing, and Stacey Abrams, the state’s Democratic energy dealer, who did get in.
And all that is Newhome’s second act, following a two-decade profession within the Military, which noticed her rise from non-public to Colin Powell’s alternative to begin a brand new command: the Military’s cyber espionage process power. The navy was her escape hatch, schooling, and management academy.
Newhouse’s defining ability is refined and uncommon: strolling into a fancy system she would not perceive and finding out it from all angles till she’s mastered it, as she has accomplished within the disparate realms of the navy, authorities contracting, and late-stage startup investing, a discipline virtually devoid of ladies of shade.
And it’s a notably esoteric, and controversial, monetary instrument that Newhouse is mastering now–the SPAC, or special-purpose acquisition firm. For the opportunists of Wall Avenue, a SPAC is a approach to money in on low rates of interest and flush buyers to again firms that want a lift. For Newhouse, it’s the lever she was searching for to elevate girls like herself. And he or she would haven’t only one SPAC, however a complete community of them.
“Phyllis is the toughest working, busiest particular person I do know. Each time I really feel like I am doing an excessive amount of, she’s doing extra.”–Serena Williams
THE HEARTH IS THE PLACE the place Newhouse discovered the power that animates her, and plenty of who’re near her. On any given day, her son would possibly come over and prepare dinner dinner. He is 24 now, and would not must be requested to help. That work ethic might have come from Phyllis’s father, a loving disciplinarian who labored on the railways and had a ingesting downside, who enforced Saturday laundry day and the bed-making schedule.
Newhouse was near her father, and essentially the most like him of all her siblings. The group included youngsters of her grandmother, who died in childbirth whereas Phyllis’s mom was giving delivery to her older sister. It wasn’t till age 28 that Phyllis realized what the older ladies knew: A few of them had been her aunts.
Dad referred to as her “little warrior.” He wasn’t in favor of her becoming a member of the navy, however the pull of sisterhood introduced her there. As a teen, visiting an older sister stationed at Pope Air Pressure Base, Phyllis was taken by the jumpsuits girls wore on the flight pad, and awed when her sister knowledgeable her they weren’t style: These had been the ladies who had been flying the large planes. “Wow, what the hell!” Newhouse remembers pondering. “I had by no means seen girls with that degree of command, and authority, and energy, and confidence. I used to be blown away.”
She enlisted in 1978, and by no means suffered the standard-issue tradition shock. “Have you ever ever washed pots and dishes for 11 children?” she asks. “It was a chunk of cake in contrast with the navy camp I used to be coming from.” An entrepreneurial streak emerged early: Fellow privates paid her to make their beds to cross inspection.
At the moment, Newhouse divides her 20 years of Military life into three phases. The primary: studying to construct an ideal profile. The establishment was in flux, changing to an all-volunteer power. She handed aptitude assessments to work in information safety; it was beneath the purview of White Home Communications, which gave her visions of a life in Washington. At Fort Stewart, Georgia, she continued to bust expectations. Listening to that girls do not get excellent 300-point scores on bodily aptitude assessments, she got down to ace them. She succeeded, each single 12 months.
Section two: shaping her profile as a frontrunner. “I did not need to be an excellent chief. I left that to different individuals,” Newhouse says. “I wished to be an ideal chief”–and this within the wake of the Tailhook sexual assault scandal and the controversy over girls within the navy. She was stationed in Stuttgart, Germany, and took assignments throughout Europe, together with NATO command in Belgium. She developed a community of mentors and coaches. She studied each normal and rating soldier she encountered. From the rotten ones, she outlined who she wouldn’t be. The leaders she admired, she stored shut.
In 1996, she started the ultimate leg: assuming precise management. She flew to Washington to interview with Normal Colin Powell for a publish that may oversee the nation’s cyber espionage–essentially, to construct a division linking the safety communications apparatuses of all branches of the U.S. navy. She says Powell advised her that she wasn’t essentially the most certified applicant, however he additionally suggested her to “by no means have a look at the qualifications on a paper. Take a look at the best potential in an individual and you’ll at all times get the very best particular person.” She obtained the job.
It was an entrepreneurial endeavor: standing up a brand new command, the staffing, the networking. Then got here her largest problem: plotting her exit from the navy. She began 24 months out, loads of time to do what she at all times did–learn the foundations of the sport earlier than you play. Her plan was to begin an organization. In each minute of free time, she’d interview entrepreneurs, notably veterans, about their challenges and their path to post-military success. “Technique, coaching, planning, focus, mission. That is all I’ve accomplished for 22 years,” she says.
She left her publish as a command sergeant main in 2000 and referred to as her cybersafety enterprise Xtreme Options. (The identify comes from navy slang for excessive; acing the bodily aptitude check could be “xtreme health.”) Failure was not an choice, but it surely lurked round each nook, in indicators Newhouse planted in her lavatory, on her nightstand, throughout her house: “FAILURE IS NOT AN OPTION.” “I had it as a continuing reminder. ‘What’s it, Phyllis, you are working for?’ ” she says. “And that was a profitable firm.”
She figured her Military cred would possibly assist win authorities and navy contracts for I.T. and cybersecurity work. She would rent as she signed every deal. She simply wanted the offers. And in that, she opted for boldness. On a spring day in April in 2001, Newhouse walked into AT&T’s headquarters on Peachtree Avenue in downtown Atlanta and requested on the foyer desk for a gathering. Fifteen minutes later, she had the ear of each a cybersecurity and a research-and-development rep. Inside hours, she had a contract and an pressing have to carry on six workers. “Individuals say, ‘You have to know anyone.’ Nah. I encourage to vary,” Newhouse says. “You have to get in every time you may.”
What her new companions at AT&T had no method of realizing was that her life exterior these doorways had crumbled. She’d left the one job she’d ever had. She was divorcing her husband, and about to turn out to be a single father or mother of her 2-year-old son. Failure was not an choice there both. “I may hear my dad’s voice, egging me on to combat good and be powerful and hunker down and get by way of it,” she says.
Inside a month, Newhouse had signed her first federal contract, a small cybersafety operation that may make use of greater than two dozen. Inside a 12 months, each it and AT&T had ramped up demand. By the 18-month mark, Xtreme Options was a 200-person firm. It grew by no less than 42 % for eight straight years, branching out into the automotive, banking, and retail industries. It landed on the Inc. 5000 for the primary time in 2013. The WPO lauded Newhouse for working one of many fastest-growing woman-founded firms within the nation. Ernst & Younger named her Expertise Entrepreneur of the Yr in 2017. At the moment, Xtreme has workers in 46 states, embedded in firms giant and small and in a number of authorities and navy operations; 31 % of the workers are veterans.
By 2020, and the onset of the Covid-19 pandemic, Newhouse had a robust community exterior of the cybersecurity world. She determined to take a while away from Xtreme Options to pursue her most audacious venture but.
“She’s gotten to the highest of her career, and she or he has a ladder again down for others to observe her.”–Larry Fitzgerald, Arizona Cardinals
OVER THE PAST YEAR, SPACs have gone from obscurity to the entrance of the enterprise part. This funky monetary concoction is actually a company entity with a lot of funding, and a (hopefully) sturdy management workforce, however no precise operations. Primarily, an organization that might make nice widgets, minus the widgets. The aim of a SPAC is to boost a bunch of cash by going public on a inventory alternate, at which period it has as much as two years to woo and merge with an ideal widget maker. If it would not, or buyers do not suppose the widgets are nice, they’ll get their a refund.
If this sounds just a little like a reverse-merger, or the blank-check firms that earned dangerous reputations within the 1980s for regularly defrauding buyers, that is as a result of it’s a blank-check firm, with a number of extra federal protections in place. However one side remains to be the identical: SPACs protect founders and firms from the in depth and sometimes-painful disclosure course of mandated by conventional IPOs. They’re additionally faster, which is helpful throughout a probably risky market. Say, a worldwide pandemic.
That side of the modern funding vehicle has motivated tons of of midsize and fast-growing firms in any other case content material to remain non-public to merge with a SPAC and–poof!–become public. This 12 months greater than 400 blank-check firms filed for IPOs within the U.S. as of August (on at some point 15 of them), up from 248 in all of 2020, in keeping with SPAC Analysis, a Chicago-based market-research agency. They now make up about 70 % of all IPOs, reviews Dealogic. Corporations resembling DraftKings, SoFi, and Hims have gone public through SPAC. The vogue has prolonged past Wall Avenue. Earlier this 12 months, Jay-Z launched a hashish SPAC (his title: chief visionary officer), and Shaquille O’Neal’s SPAC took WeWork public. Ciara and Paul Ryan have SPACs too.
In 2018, Newhouse had by no means heard of SPACs, however she started getting chilly calls from non-public fairness sorts throwing across the time period. Seems, they had been scouting for a cybersecurity firm to merge with. She Googled SPAC, with an eyebrow raised. However she appreciated what she noticed. “Who would not need to do that?” she thought. Newhouse obtained a dozen extra calls that week. None had been from girls.
So she requested her financial institution to seek for women-run SPACs that could possibly be potential companions. It discovered only one (Presently, solely three.2 % of SPACs have a feminine chair or CEO, according to SPAC Observe.) Newhouse referred to as an investor she’d met by way of the WPO, and so they stewed concerning the lack of ladies prepared to take a danger on this new monetary car. Newhouse set down her cellphone, each incensed and fascinated. “Dammit. I am going to do that,” she vowed. “I will be taught all the things I must be harmful.”
She wished girls to be a part of the motion this time. The increase in leveraged buyouts; the creation of hedge funds: Who benefited? Virtually totally prosperous males. “Girls present up 20 years late to the social gathering, and virtually all the things is gone. After which we get the leftovers,” Newhouse says. “If we understood the sport nicely sufficient to play it early on, then we get to determine when the social gathering ends.”
SPACs had been ideally suited to her function. Their open construction meant that she may affect the management composition of the businesses she created, and diversify firm boards throughout industries as her SPACs took them public. She may additionally empower a different slate of ladies to take a position. In brief, Newhouse may determine how the sport was played–and by whom. She would research the markets and create a SPAC herself.
She discovered quick. Over 60 days, she leaned on her community to grasp the language of Wall Avenue and the way IPOs and buying and selling labored. “It was like an MBA on steroids,” Newhouse says. She obtained on the cellphone with Isabelle Freidheim, co-founder of economic search-engine startup Magnifi and funding agency Starwood VC. Freidheim additionally lamented the shortage of ladies concerned. “When the hell can we begin?!” Newhouse mentioned.
Collectively, they created Athena Expertise Acquisition Corp., a SPAC with an all-woman board of impeccable credentials. It might embrace USA Community’s founder and former CEO Kay Koplovitz; ActOne Group founder Janice Howroyd, the primary Black girl to construct a billion-dollar enterprise; Judith Rodin, the primary girl president of an Ivy League college; and lawyer and former SEC commissioner Annette Nazareth.
Then Newhouse sought to usher in her buyers. She approached Stacey Abrams and laid out her imaginative and prescient for an organization funded and based solely by women–something totally new, to show it could possibly be accomplished, and to put a path for different girls to observe. Abrams was instantly enthused. “That chance was extremely essential to me,” Abrams says. “Black girls aren’t usually included within the extra refined monetary offers.”
It wasn’t misplaced on Newhouse that not all girls have capital hanging round to spend money on a risky-sounding deal. Democratizing funding was her subsequent problem.
“When she talks about shouldering up, it isn’t nearly girls linking arms. It is about standing subsequent to 1 one other and creating change collectively.”–Cate Luzio, founding father of Luminary
BY 2018, NEWHOUSE’S motivations had shifted. Her son had grown. Failure not lurked round corners. A 12 months earlier than, she’d attended an awards ceremony pairing honorees with superstar audio system for personal lunches and located herself at a desk with Viola Davis. They shared private tales and found commonalities not solely of their upbringings, but in addition of their targets of serving to girls on entrepreneurial paths. In 2019, they teamed as much as discovered ShoulderUp, a nonprofit aimed toward educating and empowering girls.
The best way Newhouse made an ally of Davis over lunch, simply as she gained a contract from AT&T on a chilly name, illuminates her charisma when she offers it flight. In her orderly house workplace, with little vegetation and books stacked simply so, Newhouse is measured and reserved. She just isn’t totally snug with publicity, although she’s a neighborhood superstar, pleasant with Atlanta’s mayor and energy set. However her cybersafety function, and a few of her navy previous, means she will’t disclose the scope of her counterterrorism work. Her firm’s dimension and its contracts are categorized. She would not have a Wikipedia web page.
When in her ingredient at Xtreme’s places of work, although, she is animated and ebullient. A youthful 59, Newhouse makes use of her deep voice intentionally, her gentle drawl fluid and comforting. Tall and commanding with a sensible pixie minimize, her attract is such that persons are shortly drawn into her circle, and she or he turns into directly a pal, an adviser, and, as Larry Fitzgerald of the Arizona Cardinals refers to her now, an aunt. He was so taken together with her magnificence when he encountered her at a 2019 Tremendous Bowl occasion in Atlanta that, he says, “I simply went proper as much as her.” He merely needed to know who she was.
Within the two years since its founding, ShoulderUp has morphed from an inspirational car right into a monetary one. Mentorship and financial-literacy initiatives assist younger girls, notably girls of shade, get into investing early. And ShoulderUp Ventures is creating funding alternatives often past the attain of individuals of shade by taking a small slice of an enormous pie–say, $5 million or $10 million out of a $300 million spherical of funding for an organization like Coinbase or Pinterest–and opening it as much as Newhouse’s community.
ShoulderUp doesn’t exclude males; they’re elementary to the trouble. It should invite younger girls school college students to its pre-IPO investing seminars, however sports activities stars like Fitzgerald could be there too, studying to vet offers themselves. A part of shouldering up is having a group of males to assist girls as they make offers, climb ladders, and chart programs.
Now that she’s taken her first SPAC public, Newhouse is placing it to work in keeping with her imaginative and prescient. In July, simply months after Newhouse rang the bell on the NYSE, Athena merged with the modern solar-energy outfit Heliogen. Newhouse and its founder, Invoice Gross, are assembling a various new board of administrators. “It isn’t only for equal alternative. It is truly higher for enterprise,” Gross says. “Phyllis has set that instance for me.” He says he knew merging with Athena was proper when he obtained a be aware from one in all Heliogen’s younger engineers saying the all-woman workforce excited and impressed her.
Newhouse’s two new SPACs, extensions of ShoulderUp, will concentrate on performs in leisure, sports activities, media, and cybersafety. Her work with the broader ShoulderUp group will entail management and investing programs, and, she hopes, a community of mini-SPACs that she will nurture and advise, moderately than helm. She desires to mentor, community with, and, hell, push younger girls in keeping with Powell’s dictum–that individuals with the best potential moderately than the very best résumés deserve management positions.
One in every of them is barely 20 years outdated. Maya Penn, founding father of Maya’s Concepts, a clothes firm she began at eight, is a ShoulderUp ambassador, bringing younger entrepreneurs into the fold. She additionally mentors and makes seed grants to younger girls founders. It is individuals like Penn whom Newhouse desires to see ring bells on inventory exchanges. “I would like to put collectively a SPAC of ladies beneath 30,” Newhouse says. “Why ought to Maya have to attend till she’s 50 to have that chance?”
As her pal and funding associate Nina Vaca, founding father of Pinnacle Group, places it, Newhouse is pushed by lifting others. “The locations her toes have walked, alongside celebrities, navy leaders–she could possibly be reaping that only for herself,” Vaca says. “However she has a plan to duplicate that success and convey it to others. That is her integrity and her management.”
Newhouse would not simply invite individuals to the desk. She learns find out how to construct the desk, after which teaches others to make their very own, after which a feast, and a household.
From the October 2021 difficulty of Inc. Journal