Financing High Growth Women-led businesses-5.1.16

1 © 2013 Ventureneer. All rights reserved.
Financing Can
Break the Glass
Ceiling For Women
Entrepreneurs
Geri Stengel
geri@ventureneer.com
212-362-3088
Updated May 1, 2016
Flickr background by Sarah G

Overview

Raising Money Is Hard, It Is Harder for Women
Source: Access to Capital
by High-Growth Women-
Owned Businesses: Cole
and Robb

What’s Holding Women Back?
• Women don’t ask
• Women don’t dream big
• Issues of control
• Women rely on reinvesting
profits
• Differences in credit scores,
growth potential of the
industry and size of firm
• Discrimination
Photo by stevendepolo via Flickr

Female-founded Firms Raise Less Equity Financing
• Angel and VCs
14.4% versus 3.6%
• Ask close friends
9.2% versus 1.8%
• Ask business acquaintances
13.5% versus 5.4%
Source: Access to Capital by High-Growth Women-Owned Businesses/ Inc. 5005000 Firms
Photo: Money by Aaron Patterson via Flickr

Ecosystem Organizations Ready Women to Compete

$1 Million Plus Women-Owned Businesses
• 171,842
• 12% of all $MM+ businesses
• Rate of change: 21%
• Rate of change nearly 5Xs greater
female vs male owned businesses
Source: 2007 and 2012 Census Data
SBA and U.S. Women’s Chamber of Commerce

Women of Color Are Being Left Behind
Source: #Project Diane by Digitalundivided
Photo: Sylwia Bartyzel via Stocksnap
• 18% of women are black
• 4% of women-led tech startups are black

Women-led Companies Perform
• Dow Jones
• First Round
• Kauffman
• SBA
Photo: Speed Quantified by
Cristeen Quezon via Flick

Venture Capital

Venture Capital: Still a Boy’s Club
% VC % VC Backed Led % VC Backed CEO
2015* 6% 18% 5%
2011-2013 6% 15% 3%
1999 10% 5% NA
Source: Babson Diana Report, PitchBook*
Photo: Businessmen by
Markus Spiske via Flickr

Is Change in the Wind for VC?

VC Funds Aimed at Women Led Companies Forming
• BBG Ventures
• Belle Capital USA
• Female Founders Fund
• Golden Seeds
• Intel Diversity Fund
• Sogal Ventures
• Women’s Venture Capital Fund
• And more
Photo: Sunset Formation by Steve Corey via Flickr

Not Welcomed? Women Change the Game
• Women venture capitalists leave big
firms to set up their own firms
• Dell and Google invest in funds
with diverse investment partners
Photo: Color Explosion by Simon Strandgaard via Flickr

Smaller Younger VCs Are Diverse
Source: The Information:
Future List

Changing the Ratio: Corporate Venture Capital
• 6% of VCs are women
• 17% of top 20 CVCs are women
Source: PitchBook and CB Insights
Photo: Will Morrow, HCA; Maclovia Zelaya, GE Ventures; Chris. Langford, Lowes Venture Capital;
Jonathan Drilling, Comcast Ventures and Geri Stengel Ventureneer courtesy of 3686

Angels

Girl Power
Source: Harness the Power of the Purse: Winning Women Investors
Photo : Future so bright by Scott Swigart via Flickr,
Women’s Investable Assets in U.S.
• $11.2 trillion
• 39% of wealth

Angel Investing: Not Just a Man’s Game
% Angels
Women
% Angel Backed
Women Led Co.
2014 26% 28%
2013 19% 20%
2012 22% 19%
2011 12% 13%
Source: Center for Venture Research
Photo: Month of the Dead* Shy Angel by
Michel Filion via Flickr

Only 3% of Accredited Investors Are Angels
Photo: Angel wings graffiti by Tim Herrick via Flickr

Crowdfunding

Innovative Co./Funders Not Using Innovations for Funding
Photo: Innovation by thinkpublic modified via Flickr

Rewards Crowdfunding: A Drop in the Funding Bucket
2015: $658 million
Source: Break New Ground: The Americas
Alternative Finance Benchmark Report

Women Outperform Men at Rewards Crowdfunding
Source: Separate studies by Berkeley and Kellogg, Hebrew University, NYU and Wharton

It’s Not About the Crowd. It’s About Your Community!
Source: Leaning In or Leaning On? Gender, Homophily, and Activism in Crowdfunding
NYU - Leonard N. Stern School of Business and University of Pennsylvania - Wharton School

Ladies, You’ve Got the Skills
• Vivid language*
• Inclusive language*
• Story teller
• Organized, diligent
• Marketer
• Realistic projections
• Aligns words with actions
• Integrity
• Good follow up
* Source: Berkley and Kellogg
Photo: Queen YUNA KIM via Flickr

Lesson Learned for a Successful Rewards Campaign
• Build your network before you need it
• Get organized
• Research
– Campaigns that worked + didn’t
– Rewards matter
– Platform for fit with your goals
• Tell a good story, include your ‘why’
• Communicate clearly
• Create a video
• Form a team
• Experiment, no one size fits all
• Show momentum
• Engage with customers
• Provide updates
• Be persistent

Investment Crowdfunding: Title II, Accredited Investor
• Centralizes
• Streamlines
• Simplifies
• Shortens process
Photo: Fund by Got Credit via Flickr

Investment Crowdfunding Is In Its Infancy
Venture Capital Angel Investments
$58.8 Billion
Offline $24 Billion
Crowdfunding $.6 Billion
Source: 2015 MoneyTree, 2014 Center for Venture Research and Break New Ground: The Americas Alternative Finance Benchmark
Report (2015 crowdfunding numbers)

Women Are Sitting on the Sidelines
• 36% of companies seeking
angel financing offline are
women led
• 18% of companies seeking
equity crowding are women led
Source: Center for Venture Research and Crowdnetic
Photo: Bench by Michael Swan via Flickr

What’s Holding Investment Crowdfunding Back?
• Confusion with rewards
crowdfunding
• A steep learning curve
• Misconceptions

Lesson Learned: for Successful Equity Campaign
• Build your network before you
need it
• Get organized
• Segment network, target
appropriately
• Communicate clearly
• Focus on solving a pain point
• Highlight the skills of the team
• Make a compelling video
• Emphasize traction: customers,
partners, media mentions, etc.
• Show momentum
• Reach out often using different
• Make the ask and ignore rejection
• Attend to details

Big Things Are Happening (and More Are in the Works)
• Success of syndicates
• AngelList + CSC Venture Capital =
CSC Upshot to invest in syndicates
• CircleUp + General Mills Fund
• Crowdfunder VC Index Fund
• Collaborative Fund creates
Collab+Consumer to invest
in CircleUp companies
• CircleUp alliance with J&J
• Portfolia alliance with Merck
• Angel Capital Association
gets it
• Portfolia Rising Tide Fund
Photo: Fireworks by Amir Kbah via Flickr

Investment Crowdfunding: Title IV, Reg A, Mini IPO
• Tier I
– $20 MM
– No state preemption
• Tier II
– $50 MM
– State preemption
– Greater financial
reporting + disclosure

Retail Investment Crowdfunding: Title III, Intrastate
• $1 M / $1-$2 MM
• More for small businesses
than high-growth startups

Title III and IV Allow Access to IRA Investments
• 401(k) and IRA accounts
– 43 million investors
– $14 trillion+

Questions

Articles: General Fundraising Articles
• Is Change In The Wind For Women Entrepreneurs Raising Capital?
• Get Backed: 10 Building Blocks for the Perfect Startup Pitch
• The 5 W’s (and How) of Equity Startup Financing
• 5 Common Mistakes Companies Make When Seeking Financing
• VC or Angel: Who Should You Go to for the Funding You Need?
• 9 Ways to Perfect Your Pitch and Investor Presentation
• How to Get The Attention Of Investors In-person And Online
• How To Ensure An Angel Or VC Is The Right Match For You
• 5 Things Angel Investors Are Looking For In Your Pitch
• 8 ways to ensure your pitch doesn’t land on deaf ears
• Book: Forget the Glass Ceiling: Build Your Business Without One
• RSS Feed with articles on finance: http://bit.ly/Finance4Biz

Articles: Raising Money From Venture Capital
• Getting An Assist Shortens Time To Raise Series C Funding
• How the VC Industry Is Becoming Women-Friendly
• Want Venture Capital? Here Are 10 Must-Haves
• 10 ways to catch a venture capitalist’s eye
• How One Woman Entrepreneur Raised Venture Capital Lickety-Split
• How To Transform An Industry And Raise The Venture Capital To Do It
• How To Carve Out A Niche And Raise $42 million in Venture Capital
• Advice From A Startup Queen
• How Can We Increase Venture Capital Investments in Women-led
Businesses?
• Women And Tech Combine To Revive Fashion Industry In NYC

Articles: Raising Money From Angels
• What Dating and Angel Investing Have In Common
• Diverse Angels Breed Innovative Companies
• College Gives Women Students the Wings of Angels
• Which Shark on “Shark Tank” Should You Swim With?
• 5 Powerful Ways to Use Your Purse to Help Women and Girls
• Angels Close the Gender Gap
• Women Entrepreneurs Get Their Game On With Angel Investors
• Angels Ignite Blazing Growth for Women Entrepreneurs, More Fuel
Needed
• Angels Change The Ratio For Women Entrepreneurs
• How To Find Angel Investors Outside Silicon Valley, NYC And Boston

Articles: Becoming an Angel Investor
• Diverse Angels Breed Innovative Companies
• College Gives Women Students the Wings of Angels
• 5 Powerful Ways to Use Your Purse to Help Women and Girls
• Angels Change The Ratio For Women Entrepreneurs
• The Power Of Women's Portfolio
• Is Investing In Women Entrepreneurs For You? 9 Questions To Ask If
You Want To Find Out
• How Women Angels And Entrepreneurs Are Beating Investment Odds
• Can Angels Help Women Shatter Glass Ceilings?
• Book: Impact With Wings: Stories to Inspire and Mobilize Women Angel
Investors and Entrepreneurs

Articles: Rewards-based Crowdfunding
• Time For Tea Series: Women and Crowdfunding
• Crowdfunding Is A Female Founder's Best Friend
• Why Crowdfunding Is so Successful for Women Entrepreneurs
• 8 Tips For Crowdfunding Success
• How to Ensure a Successful Crowdfunding Campaign

Articles: Investment Crowdfunding
• The Essential Guide to Investment Crowdfunding and the JOBS Act
• Equity Crowdfunding on Its Second Birthday: A Look Back and Ahead
• Equity Crowdfunding: Lessons From the Field
• Entrepreneurs Slow to Market Via Equity Crowdfunding Platforms
• 6 Common Misconceptions About Equity Crowdfunding
• Raising Capital With a Mini IPO Under Regulation A+: Is It Right for
Your Company?
• How to Ensure a Successful Crowdfunding Campaign
• How Crowdfunding Is Closing The Funding Gap
• What's Ellen Pao Got to Do With Crowdfunding?
• Equity Crowdfunding: Growing But Not Yet Of Age
• Research: Stand Out In the Crowd: How Women (and Men) Benefit From
Equity Crowdfunding
• Equity Crowdfunding Site Targets The Gigantic Untapped Consumer
Market

Financing High Growth Women-led businesses-5.1.16

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