CREATING THE VIRTUOUS CYCLE: CAPITAL FOR FEMALE-LED BUSINESSES 2


WSA Blog

 

 

This week EC and WSA VP of Entrepreneurship, Britt Danneman, shares her take on the other side of the entrepreneurship coin – early stage investing:

 

You’ve heard a lot from us in the WSA and in the media on female founders lately. We’re excited about the initiatives here on campus and we’re encouraged by the positive momentum in women-led companies both on and off campus. But we need to give equal attention to the other side of the entrepreneurship coin – early stage investing.

Marie Claire recently wrote an article about the network of awesome women founders in New York that have come out of HBS. These women are inspiring – and you should read their story if you haven’t yet – but the commentary on how they got funding (or struggled to do so) is less so.

As a woman at HBS who has spent time on the investing side and has entrepreneurial ambitions, the idea that female founders are mostly likely to find funding only within a small circle of investors is unsettling. The statistics are pretty compelling and not in my favor: women-led companies represent only a small portion of VC-backed startups (less than 7% in the tech industry and 4%-19% in the top Silicon Valley VC firms).

But there are investors across the country that are moving the needle for women entrepreneurs and the purpose of this post is to brag on their behalf.

Venture Capital Firms

  • First Round Capital.  FRC recently published its key investment findings after 10 years in the business. Number 1 is that companies with a female founder performed 63% better than companies with an all-male team.
  • Aspect Ventures.  Two of the most respected VCs in the Valley (HBS alum Jennifer Fonstad and GSB alum Theresia Gouw) raised a fund in May 2015. I can’t wait to see what they do.
  • Forerunner Ventures.  Kirsten Green and her firm have earned enormous respect for their work on commerce companies and I’m encouraged that VCs like her think the industry is changing.

Angel Investors/Groups

  • Jonathan Sposato.  In May 2015 Sposato announced to a Seattle investing conference that he is ”not going to invest in any company that does not have a female founder.” I’m still clapping.
  • Golden Seeds.  A network of 275+ women investing in women-led companies, Golden Seeds has invested in 65+ enterprises since 2005.
  • #Angels.*  A group of 6 early employees at Twitter launched an angel group in March 2015 and has been celebrated across the Valley. If you’re a founder, email these women.

We’ve seen ecosystems of founders and investors grow quickly out of big exits from prominent companies (e.g the PayPal Mafia) – I can’t wait to see a similar virtuous cycle driven by female leaders.
* (full disclosure I worked with #Angels and am a completely biased advocate for these women)

 


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