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  Entrepreneurship Insights

August 2015

Welcome to the latest bulletin offering entrepreneurial insights from the Startup Owl. Enjoy and learn. This issue is mostly about female entrepreneurship (but see Julie's comment in her article).
Male on Female Founders
Disclaimer: I am male, so I tread lightly as I write this However, I can declare that my first and best startup was in partnership with a woman; I have worked with many women entrepreneurs. I have also encouraged several male founders to seek female co-founders.

I have been an MBA entrepreneurship teacher for the last six years and a student of startups for many more (my first startup was at 11). I'm an entrepreneur myself, and have mentored many venture founders. Here are five personal observations:
  • women frequently are better able to grasp the systemic interactions between the many disparate activities involved in starting a venture; neuroscientists say that women appear to make greater use of both hemispheres of the brain, and thus are good at integrating intuition and analysis;
  • one of the key characteristics of a successful founder is the tolerance of ambiguity; this human trait comes more easily to a woman because they are better at visualizing more factors at once, while men often prefer to single-mindedly 'go for broke'... literally;
  • it's overly simplistic, but female intuition tends to be less tainted by the ego, which dominates the male founder;
  • entrepreneurs of both sexes are motivated by achievement, more than affiliation or power; however, the woman may see achievement in the qualitative, more than/as well as, the quantitative;
  • remaining in the present and being open to possibility is tough, but the flight or fight mechanism may be more intense in men than women; more women than men practice mindfulness meditation, and those that do are likely to improve their focus and performance, while reducing stress.
I am not suggesting that either gender makes a better entrepreneur. I recommend bringing these five attributes to bear in a startup venture to enhance stability and success. Businesses with a woman on the executive team are more likely to have higher valuations at both first and last funding (64 percent higher and 49 percent higher, respectively), accoring to the Women Entrepreneurs 2014 report from the Diana Project, which engages in research activities, forums and scholarship focusing on women entrepreneurs and their growth (at Babson College).

Will Keyser, the Startup Owl

Funding & Support for Women Entrepreneurs
In the last 15 years, the number of small businesses started in the US has increased by 41 per cent, while the number of women-owned businesses increased by 59 per cent, or 1½ times the national average.

On the other hand, nearly one-third of the women surveyed in the Bank of America's 2014 Small Business Owner Report said they think they have less access to capital and new business opportunities than male small business owners do.

The numbers in this issue of Entrepreneurial Insights make pretty depressing reading for women entrepreneurs, but the scene is changing rapidly.
For instance, in August 2015, over 40 venture capital firms with more than $100 million under management wrote to President Obama, declaring, "We, the leaders of the venture capital industry and the NVCA Diversity Task Force, stand together in our commitment to advance opportunity for women and underrepresented minorities in the entrepreneurial ecosystem."
This is a strong talk, but will take a while to see concrete actions materializing. Meanwhile, there is a growing band of investors seeking to put money into female-led startups. Here is a list of organizations, both profit and nonprofit, which the Startup Owl has compiled:
  1. Amber Grant Foundation: began in 1998, launched in conjunction with the entrepreneurial community for women, set up to honor the memory of a special young woman who died at 19 years old.
  2. Astia Capital Runway: identifies investment-ready companies with women in positions of leadership and provides them access to capital and resources.
  3. Cartier Women's Initiative Awards: an international business plan competition created in 2006 by Cartier, the Women's Forum, McKinsey & Company and INSEAD business school to identify, support and encourage projects by women entrepreneurs.
  4. Count Me In: not-for-profit provider of resources, business education and community support for women entrepreneurs seeking to grow micro-businesses into million dollar enterprises.
  5. Eileen Fisher Women-Owned Business Grant: supports innovative, women-owned companies that are beyond the start-up phase and ready to expand their business and their potential for positive social and environmental impact.
  6. EY Entrepreneurial Winning Women: a national competition and executive leadership program that identifies a select group of high-potential women entrepreneurs whose businesses show real potential to scale-and then helps them do it.
  7. Female Founders Fund: invests in the exponential power of exceptional female talent, focused on e-commerce, media, platforms, advertising, web-enabled services.
  8. Golden Seeds: a discerning group of investors, seeking and funding high-potential, women-led businesses.
  9. Intel Diversity Fund: the largest venture capital fund ever created to focus on female and underrepresented minority entrepreneurs.
  10. Jump Fund: invests in women's capital in female-led companies with growth potential in order to generate a strong financial return and elevate the role of women in business.
  11. Moola Hoop: is a crowdfunding platform that helps women with small businesses reward themselves and their customers.
  12. Sara Blakely Foundation and Spanx Leg-Up: the Foundation is dedicated to helping women globally and locally through education and entrepreneurship; Leg Up® uses the Spanx catalog, and social media to support female entrepreneurs and their businesses/products.
  13. Pipeline Fellowship: works to increase diversity in the U.S. angel investing community and create capital for women social entrepreneurs.
  14. Plum Alley: is an early stage company. It began as a platform for highlighting the innovations and contributions women were making in tech and as entrepreneurs, that introduced crowdfunding in 2013.
  15. Sogal: a platform that empowers emerging entrepreneurs to succeed, and a community that unites global young founders to change the world.
  16. Springboard Enterprises: a highly-vetted expert network of innovators, investors and influencers who are dedicated to building high-growth technology-oriented companies led by women.
  17. The Refinery: fuels the growth of early stage companies with at least one woman in a leadership role. The Refinery provides the tools, resources and capital for smart women to build great companies.
  18. Tory Burch Foundation: has developed programs and initiatives that invest in the success and sustainability of women-owned small businesses.
  19. Women's Financial Fund: awards grants to new and existing businesses from $100 to $5,000.
  20. Women's Venture Fund: a nonprofit organization that helps women to establish thriving businesses in urban communities with funding and business development programs.
37 Angels activates the untapped capital and experience women can bring to investing in male and female-led ventures. When they started, 13% of angel investors were women.  They want that number to be 50%.  BELLE Capital is an early stage angel fund focused on building great companies in underserved capital markets across the USA. These are two outfits thatI learned about though my friendship with Anders Ferguson of Veris Capital, who specialize in gender lens investing, among other specialisms in sustainable wealth management.

A Guide to Women- and Minority-Owned Business Funding Opportunities, a report by US Senator Kirsten Gillibrand of New York is a useful guide to most of the Federal programs.

The Majority Report of the US Senate Committee on Small Business and Entrepreneurship, 21st Century Barriers to Women's Entrepreneurship, also is interesting reading. The report points out that while Government has never met its goal of awarding 5 percent of Federal contracts to women-owned businesses, if they did, women-owned businesses would have access to marketplace opportunities worth at least $4 billion each year. To bid on government contracts, you need a (free)  DUNS number, and to know your North American Industry Classification System ( NAICS) Code Number.

Thanks for reading this issue of Entrepreneurship Insights. If you have any comments or would like help with your startup, do write to me:

Will Keyser
a.k.a. The Startup Owl

In This Issue
Entrepreneurship is Gender Neutral
by Julie Fahnestock*

I hate the term "female entrepreneurship." We don't name entrepreneurial endeavors led by men, "male entrepreneurship." We just call it entrepreneurship.

Unintentionally or not, 'female entrepreneurship' implies a rare or "wow, women can start and lead businesses? Really? Since when?" distinction. The gap widens and widens as we separate the genders into distinct categories. I'm not the only one calling for us to crack the glass for equality on this ceiling.

Astia  does too. A San Fran-based nonprofit, Astia funds women-led ventures not because it's trendy, but because the ventures are highly innovative and high performance. They know that in the last 20 years, because of increased access to higher education and changing views of gender roles around the globe, women are more empowered to launch their own businesses and own organizations with big products for big markets. Astia identifies the world's top women leaders and connects them with angel investors for a shift of focus from our differences---a 1 percent biological difference---and social rules to a synergistic alliance among all business leaders.

"We are not interested in the overgeneralized, decades - long debate on how men and women intrinsically compare as a bifurcated set in terms of their business acumen and performance.  We're also not advocating a platform that companies should win investment because women are at the helm."

Astia's interests, however, are to identify companies who manage "their inclusivity quotient for high performance by engaging women and men at the top levels of high-growth organizations." They estimate only 10,000 women "supernovas" exist and will reach their pinnacle in their business leadership by 2020.

"The emergence of a robust marketplace for female entrepreneurial talent allows us then to side-step all the debates and discriminatory practices (intentional or not) that seek to identify some inherent difference in business women and business men that will somehow create a reliable order in a messy, social system influenced by centuries of potent gender rules," states Astia's white paper.

It's a theory backed by MIT research. Professor Thomas Malone says that smart teams consist of three components: The average of the social perceptiveness of the group members; the evenness of the conversational participation; the proportion of women in the group. He is quoted saying: "If a team includes more women, its collective intelligence rises."

High-performance, impact-driven entrepreneurship is gender-neutral. The more women and men partner together the more we will grow our economy and solve the world's most pressing problems--as entrepreneurs, as business leaders, working together in buildings ceilings do not exist.

* founder of B Storytelling, a content development company designed to popularize the good happening through business. Julie is an alumna of my
Numbers of Women Entrepreneurs
When you hear the word 'entrepreneur', what image does that evoke in your mind? It probably conjures up something very positive or something very negative, and most likely, it will have a gender connotation.

The number of businesses owned by women in the United States has increased 59% since 1997. Those 8.6 million firms are generating more than $1.3 trillion in revenue and employing nearly 7.8 million people, according to the 2013 State of Women-Owned Businesses Report from American Express.

There is no evidence for why this was happening, whether to do with government/tax incentives or, more likely in my opinion, there are changes in society propelling it. 

In the 2010 Census there are more women (50.8) than men (49.2) in the US, but the Government still puts women in a classification of 'minorities' when it comes to public policy incentives. Although the number of women-owned businesses continues to grow, the report said, they employ only 6% of the nation's workforce and generate just under 4% of business revenue.

According to the Kauffman Foundation, women only account for about 16 per cent of employers and make up only 10 per cent of founders of 'high growth' firms. Women founders are recipients of just 19% of angel funding. In 1999, the Diana Project found that fewer that 5% of all ventures receiving equity capital had women on their executive teams. 

However, according to CrunchBase in May 2015, women founders are on the increase: "In 2009, 9.5% startups had at least one woman founder, but by 2014 that rate had almost doubled to 18%."

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