Women entrepreneurs: Who says we can’t

Cindy Padnos, Illuminate VenturesWhy are so few women in technology? Why is it that for every 10 men that I interview for my blog, I struggle to find one technology-oriented entrepreneur who is female? “Maybe women are more risk adverse,” says Deanna Bennett, a Boulder, Colorado woman entrepreneur who co-founded RentMonitor. “I don’t know,” she continues, “but I think it might be a nature vs. nurture issues. Just think about a group of girls and someone does something risky, and the other girls say, ‘like wow, why did you do that?’ And in a group of boys, if one does something risky and scrapes his knee, the others say, cool, do it again!”

Taryn Westberg, another woman entrepreneur who co-founded Glosite says, “Women need more help. Our brains work differently. We want to share the ups and downs and so we need a core group of supporters for when we go it alone.”

Natalie Baumgartner, clinical psychologist and entrepreneur with RoundPegg, thinks that the lack of stability makes it hard for women to become entrepreneurs. She explains, “They think about family. In graduate school, a lot of women are planning out when they are going to have kids. They have to. Instability is foreign territory.”

Background.  And if you look at women executives in the US, many studies have found that it takes a combination of aggressiveness and competitiveness. Some women maybe just choose to opt out of this life? Often the peak in the executive world coincides exactly when women are having families – in their 30s – and raising families – in their 40s. This is true in the academic as well as the corporate world. Right when you go for tenure, you may be choosing to have a family. It’s not that women can’t do both, but everyone recognizes that it takes a lot of energy and commitment to fulfill both roles well.

Babson’s Global Entrepreneurship Monitor 2006 Report on Women and Entrepreneurship puts it this way: “If men feel they know 40% of what they should know about their trade, they start a business. Women entrepreneurs prefer to know at least 98% of what there is to know about their trade. So fewer women start a business.” Maybe women are more risk averse; maybe women are not as prevalent in technology fields of study including computer science and IT; and maybe women don’t have the “love the hunt” and “eat what you kill” mentality that makes a good, competitive entrepreneur? Maybe women doubt themselves, or maybe men just care less. We know that women don’t ask. Really?

Looking at the issue on a global scale, the Global Entrepreneurship Monitor conducted a 2007 study on the role women play in business in 41 countries. These 41 countries studied make up 70% of the world’s population and 93% of global GDP. The results indicate that more women are entrepreneurs in lower income countries. You could say this might be due to necessity. Japan has a higher percentage of women entrepreneurs than men; the US has a pretty poor showing, coming in 16th on the list.

If horses can…  A role model for all of us who think that it might be a challenge to play in a man’s world might be Zenyatta, one of the most successful race horses in history, with a near-perfect record, having won 19 out of 20 races from 2007-2010. Zenyatta is also a mare, and her record makes her the most successful female racehorse of all time. Zenyatta is a big beautiful chestnut who Wmagazine described as running: “like no mare has run before, with sweeping moves and gargantuan strides; and she throws her ears up at the end of a race, as if to flaunt her effortless victory.” Her fans and owners were disappointed, and her jockey was crushed, when Zenyatta lost the Breeder’s Cup Classic by a nose in November, 2010 after starting dead last and roaring from 20 lengths behind with the crowd cheering her on.

Zenyatta’s loss maybe was tempered by a win from magnificent mare, Goldikova, who stormed to an historic victory in the Breeders’ Cup Mile, becoming the first horse to win a Breeders’ Cup race three times. She too raced against boys. Did the two mares plot this?

The next big thing.  I can’t wait to see the headlines someday for the New York Times, “The Spectacular Rise of Women-led Entrepreneurship.” Ok, so that hasn’t occurred yet, but there are significant voices out there telling us that we are well on our way.

Cindy Padnos is a venture capitalist with Illuminate Ventures in Silicon Valley. Her firm focuses on equity investing in women-led technology ventures. In a 2010 whitepaper, Cindy stated it boldly: “Women entrepreneurs are poised to lead the next wave of growth in global technology ventures.” The whitepaper concludes that women-led technology start-ups generate higher revenues per dollar of invested capital with lower failure rates than industry averages. Wow. Basically, Cindy’s research shows that women are more efficient, have fewer failures, have a higher growth rate of submitting patents, and start more companies than men. Of course, we women knew this already, but glad that the news is public so that men can digest it in private!

Cindy correlates some of the success of women entrepreneurs with the increasing number of women in leading technology-oriented degree programs. She cites Carnegie Mellon’s five-fold increase of women entering in its prestigious School of Computer Science program, from 7% to 38% over a five-year period.

Support for women entrepreneurs.  Numerous organizations have sprouted in the last 20 years to assist women entrepreneurs to create the kind of opportunity that Cindy Padnos notes. One example is Springboard Enterprises, a venture catalyst dedicated to nurturing and funding women-led high-growth businesses. Since January, 2000, Springboard has helped over 400 women-led companies raise $5 billion in equity financing, including 8 IPOs, and legions of high value M&As. 80% of Springboard companies are still in business, and they have created over 10,000 jobs.

Another is Astia, a not-for-profit global organization founded in 1999 in Silicon Valley to foster women entrepreneurs in high-tech, life sciences and clean tech. Since 2003, they have helped presenting companies raise $1 billion with 22 exits, including two IPOs.

Why do organizations dedicated to investing in women-led businesses even need to exist? One answer can be found in the gender makeup of funders. Although the numbers show some increase, today, women angels represent only 15% of the total angel population (up from 3% in 2000). This is slightly tempered by the fact that 25% of investors in angel groups are women. One prominent woman angel helping to raise these percentages is my dear friend, Catherine Mott, founder of BlueTree Allied Angels and Chairman of the Angel Capital Association.

However, the situation is really bad in the venture capital (VC) community. Only 7% of VC firms have women investment partners (although this number is above 10% in newer and smaller funds). Cindy Padnos found that among 50 of the most active VC firms, two-thirds, or 32, have not even one woman investing partner, and only three firms had more than one! The remarkable exceptions: women VC leaders, which includes such notables as Pat Cloherty (Patricof & Co. Ventures, Apax Partners, and now Delta Private Equity Partners), Jacqui Morby (TA Associates), Ann Winblad (a founder of Hummer Winblad Venture Partners), and Kathryn Gould (a founder of Foundation Capital).

The University of New Hampshire’s Center for Venture Research and others conducting research in this field have brought up the subject of “homophily,” that gender and other factors affects the decision of who invests in who. So, men invest in men, leaving women to find women investors who will listen to, and invest in, their story.

The bottom line is that of course women have been and continue to be a leading force in technology innovation and entrepreneurship! Think about Diane Green who founded VMware, Donna Dubinsky who led Palm and Handspring, Robin Chase founder of Zipcar, Caterina Fake, co-founder of Flickr and more recently of Hunch, Jessica Jackley of, Susan Strausberg of Edgar Online, and Mitchell Baker (yes, she’s a she) of Mozilla!

Support for women in technology.  One of the many organizations which focus on women in technology is the National Center for Women & Information Technology (NCWIT), led by Lucy Sanders. Among other valuable research, support and services, NCWIT offers a fantastic series of interviews with female entrepreneurs called “Entrepreneurial Heroes” which feature women founders of high-tech businesses.

Another organization is The Anita Borg Institute for Women and Technology, which was founded in 1997 by renowned computer scientist Anita Borg, PhD. And there are others if you look for them.

Lenore Blum, PhD, founder of Project Olympus at Carnegie Mellon University (and where I work as Embedded Entrepreneur), has spent most of her career encouraging women in the science, technology, engineering and mathematics (STEM) fields. Dr. Blum received her Ph.D. from MIT in 1968 (the famous year Princeton University first allowed women to enter their graduate program). At Carnegie Mellon, Dr. Blum founded Women@SCS to encourage women to enter computer science as a profession. And now Project Olympus, staffed by five women, actively encourages and supports women technology researchers and entrepreneurs.

Celebrate!  Cindy Padnos sees women entrepreneurs as the next big thing. An investor herself, with a focus on returns for her investors, she encourages other investors “to support strategies that enable high tech start-ups that are inclusive of women entrepreneurs.” Like the young women entrepreneurs featured on this blog. They are a sample from the next big thing – the young women who are leading the next generation of businesses founded (or co-founded) and run by women. And they are being heard.

Women New Venturists that I have profiled so far on this blog (five of the 16 companies) include: Lynsie Camuso (of ShowClix), Susan Koger (of Modcloth), Jess Trybus (of Etcetera Edutainment), Chris Koch (of GTECH), and Krista Paul (of Upcoming are others.

The women that I have interviewed so far are top-of-the-heap women who exude enthusiasm and savvy verve with every word. They talk fast and the interviews end early because they have to move on to other things – and quickly. Like any young entrepreneur, they are wearing multiple hats. I recall my days as CEO of a startup where I would announce “I am CEO of this company; hand me the toilet brush!” Most of the ideas that form the basis of their startups stem from their own personal experiences.

Many of them co-founded their companies with boyfriends or spouses. This is considered a no-no by many VCs and funders (most of them men). But these young women are not finding it a disadvantage; rather, they find it helpful to put all of their eggs in one basket, to really commit to their venture. To bring a new idea to market giving it all that they have.

Their young firms are finding traction in the marketplace because they all have one thing in common: they all solve a problem that the women founders and co-founders experienced in their lives and/or jobs. So they knew that there was a market because they understood the problem.

Many of the young women I feature have backgrounds in marketing and sales, so developing partnerships, landing early adopters, and developing go-to-market strategies is second nature to them. These women knew better than to get lost in the product development cycle that so many entrepreneurs fall into – fixating so much on the features and functionality of the product that they forget that this process should be customer-driven, à la Steven Blank and the lean startup movement.

In this blog, you will meet many women who are leading the charge of female entrepreneurship. These women are not intimidated, indecisive or unsure about starting their own businesses. They, and others like them, are opening the door for other young women entrepreneurs to follow. Because others will follow in their path.

So, who says we can’t?

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