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Women Entrepreneurs Aim for Venture Capital
Dallas Ft. Worth TechBiz
By Alex Ramsey - 9/24/2001
If you are a woman looking for venture money, the statistics are not in your
favor. Last year, only 6 percent of venture money raised went to companies
headed by a female.
Yet, the positive economic impact of women within companies who go public, an
important exit strategy for venture-funded firms, is powerful and conclusive.
The stock price of companies whose executive team is at least half female is 23
percent higher than companies with no top-brass women. Earnings per share are
281 percent higher.
Regardless, women receive proportionally less funding than their male
counterparts. Understanding some of the reasons why can help women improve their
chances of winning venture support.
It’s important to remember the nature of venture capital, which is to provide
equity for fast growth, high revenue companies. Although women are creating
companies in record numbers, they typically start small businesses, rather than
those with the potential for billion-dollar revenue.
Sometimes, women are reluctant to give up control once they have achieved a
degree of success in starting a company, making it difficult to attract
investors. Fewer women are in executive offices, meaning there are fewer female
leadership candidates to lead startups.
Studies show women tend to be more conservative with other people’s money, while
men have less issues with risking capital. Women also are more likely to start
service firms, rather than the life science or technology companies loved by
venture capitalists. And then, there’s how women look, act and communicate.
Cultural issues do play a big role. Most venture capitalists are male, and they
rely heavily on the networks of mostly men that they know.
Closing gaps in networking is one reason the Forum for Women Entrepreneurs, a
San Francisco-based group with a Texas branch, is planning the Southwest’s first
women’s venture capital conference.
Next March, organizers will co-host Springboard, showcasing women-owned
companies to the venture community. One of the rare female venture capitalists,
Heather Gilker of Opus Ventures, believes with encouragement like this smaller
firms could become venture concepts.
Dallas venture capitalist Guy Hoffman of TL Ventures also supports FWE: “At the
end of the day, there’s clearly been a glass ceiling. Men have enjoyed a
good-old-boy network. That hasn’t existed for women.”
Besides tradition and culture, social graces also impact women, who must watch
how they communicate during meetings. What is perfectly acceptable among other
women is strange and uncomfortable to men. For example, women must be direct and
brief, mirroring more traditionally male behaviors.
Austin chief executive Ingrid Vanderveldt of 212 Studios has raised $7 million.
She was advised to cut her hair, wear glasses and dress differently.
“I was told to act like one of the guys, that I was different,” she says. “I
tried it for a while and was miserable. I stopped. If I try to be anything but
myself, it doesn’t work.”
Vanderveldt’s experience underscores the delicate balance women face in making
sure their idea is heard. They may have to adjust behavior, but not go so far
that they lose themselves.
Many women fear the investor road show. Overall, women are no better or worse at
such presentations than men. Men have certain issues to watch, and women have
others. Usually, women have to be sure they communicate facts precisely and keep
comments simple. Dressing conservatively is a good idea, but changing
personalities is not.
So what else can women — or anyone for that matter — do to enhance the chances
The first thing is to honestly assess whether or not a business idea is venture
fundable and to make sure the business plan is well-conceived. Next, it’s
important to build a network of professional advisers to review the business
plan and pitch as well as open doors.
Thinking strategically about every meeting helps. Women can expect to be
challenged in ways often unacceptable within polite society. Entrepreneurs who
learn it’s not personal are more likely to be successful as well as avoid the
wounds caused by hurt feelings.
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