Guest post by Alicia Robb, senior fellow, Kauffman Foundation
A new report published by Babson College highlights the persistent gender gap in venture capital funding. While the amount of early-stage investment in companies with a woman on the executive team has tripled from 5 percent to 15 percent in the last 15 years, we still see a very large gap overall. Notably in the report, 85 percent of all venture capital–funded businesses had no women on the executive team, and just 2.7 percent of venture capital-funded companies had a woman CEO. I applaud the following recommendations that were produced from the report:
- Showcase the successes of growth-oriented, venture capital–funded women entrepreneurs in order to change the social perception that only male entrepreneurs can be successful in venture capital funding
- Do more to seek out early-stage, women-led businesses, including those in all regions of the country
I want to highlight two fascinating programs that are doing what the Babson report suggests. One is well established and one is brand new.
Springboard Enterprises is a non-profit organization based in Washington, D.C. that helps growth-oriented women entrepreneurs prepare for and connect with investors, influencers and other innovators. Founded in 2000, Springboard “sources, coaches, showcases and supports women-led growth companies seeking equity capital for product development and expansions.” As of mid-year 2014, 556 women-led companies have participated in Springboard programs. More than 80 percent of these companies are still in business as independent or merged entities, and 11 Springboard firms have gone public, including firms such as
MergeLane is a new accelerator that discovers, accelerates and invests in exceptional women and the companies they run. Based in Boulder, Colo., it is accepting its first cohort for a February launch. Applications are due December 15. This unique model has a reduced residency requirement that enables entrepreneurs with family commitments to participate. While MergeLane requires entrepreneurs to be in person the first two weeks and last week of the 12-week program in Boulder, it complements that requirement with virtual mentoring and mentor connections in the companies' place of residence to ensure connection throughout the program. The curriculum targets both the most critical early-stage business issues, as well as topics specifically affecting women leaders. It also provides connections to high-value, gender- and industry-diverse mentors and investors throughout the entire program. It puts a strong focus on accelerating businesses and leaders and building great companies as compared to focusing on a one-off demo-day pitch.
The media need to do a better job highlighting successful programs that are helping to move the needle in the number of equity-backed ventures led by women and successful entrepreneurs who are women. Case in point, there was a great opinion piece in the local Boulder newspaper in response to comments made at a city council meeting in Boulder. Councilman Macon Cowles said Boulder's startup economy was attracting “highly paid white men to the city, and they were pricing out families and others.” He then followed up with the statement “I don't think that's what people want.” These kinds of statements are unacceptable.
Branding the startup community as a homogeneous group of rich, white men is not just offensive, it’s factually wrong, and it’s not going to attract the diversity needed to build a robust entrepreneurship pipeline. Yet, until we see more covers of Time magazine and the New York Times promoting women entrepreneurs, the public perception is going to remain fixed on men as the premier entrepreneurial role models.
This year something great happened in Boulder: In the timeframe of about three weeks, three women-led companies raised more than $7 million in equity financing. Prima-Temp (Lauren Costantini, CEO) raised $1.8 million, GridCraft (Lisa Reeves, CEO) raised $2.3 million and Rapt Media(Erika Trautman, CEO) raised $3.1 million. Given Boulder’s small population, these are incredible statistics. How is it possible that there was not a news story on three women-led companies raising equity financing in one town in less than one month?
Let’s start highlighting more women entrepreneurs. There are so many inspirational entrepreneurs out there who do not look like Mark Zuckerberg or Bill Gates, yet when we think of the epitome of entrepreneurship, the face is usually white and male.
We need to do more to raise the visibility of successful women and minority entrepreneurs. The current paradigm must change, and both men and women must work to make that happen. Diversity in entrepreneurship (and political leadership and corporate leadership and academic leadership…) could go a long way in making the world a better place for all of us.
