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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

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Overview

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Raising Money Is Hard, It Is Harder for Women

Source: Access to Capital

by High-Growth Women-

Owned Businesses: Cole

and Robb

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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

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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. 5005000 Firms

Photo: Money by Aaron Patterson via Flickr

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Ecosystem Organizations Ready Women to Compete

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$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

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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

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Women-led Companies Perform

• Dow Jones

• First Round

• Kauffman

• SBA

Photo: Speed Quantified by

Cristeen Quezon via Flick

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Venture Capital

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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

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Is Change in the Wind for VC?

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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

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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

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Smaller Younger VCs Are Diverse

Source: The Information:

Future List

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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 3686

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Angels

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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

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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

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Only 3% of Accredited Investors Are Angels

Photo: Angel wings graffiti by Tim Herrick via Flickr

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Crowdfunding

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Innovative Co./Funders Not Using Innovations for Funding

Photo: Innovation by thinkpublic modified via Flickr

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Rewards Crowdfunding: A Drop in the Funding Bucket

2015: $658 million

Source: Break New Ground: The Americas

Alternative Finance Benchmark Report

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Women Outperform Men at Rewards Crowdfunding

Source: Separate studies by Berkeley and Kellogg, Hebrew University, NYU and Wharton

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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

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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

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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

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Investment Crowdfunding: Title II, Accredited Investor

• Centralizes

• Streamlines

• Simplifies

• Shortens process

Photo: Fund by Got Credit via Flickr

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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)

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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

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What’s Holding Investment Crowdfunding Back?

• Confusion with rewards

crowdfunding

• A steep learning curve

• Misconceptions

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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

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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

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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

Photo: Fund by Got Credit via Flickr

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Retail Investment Crowdfunding: Title III, Intrastate

• $1 M / $1-$2 MM

• More for small businesses

than high-growth startups

Photo: Fund by Got Credit via Flickr

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Title III and IV Allow Access to IRA Investments

• 401(k) and IRA accounts

– 43 million investors

– $14 trillion+

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The Force Will Be With Women Entrepreneurs With Your Help

Photo credit: © Lucasfilm Ltd. & TM. All Rights Reserved.

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Questions

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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

40 © 2013 Ventureneer. All rights reserved.

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

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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

42 © 2016 Ventureneer. All rights reserved.

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

43 © 2016 Ventureneer. All rights reserved.

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

44 © 2016 Ventureneer. All rights reserved.

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