Editor’s Note: Free-lance writer and communications executive Jennifer Tilden joins LTW’s lineup of Voices columnists with her ‘Breaking Glass’ column. As the title implies, Tilden will target people outside the ‘good old boy’ network, the issues they face and the opportunities they have as entrepreneurs. They are 52 percent of the population making 80 percent of the household purchasing decisions. In 2000, it was estimated that they owned 38 percent (or 9 million) of all US businesses. They are women. Hear them roar — roar onto the entrepreneurial fast-track that is.

Women-led firms are a rapidly growing piece of the entrepreneurial pie, but according to recent data, they are still, for the most part, an untapped market for the venture capital community. In statistics released by Venture One, only 6 percent of the $69 billion in venture capital invested in 2000 went to companies with a female CEO.

Why?

Recent studies and initiatives have attributed it two key factors: misperceptions about women-led firms and a need for better connections between female entrepreneurs and the venture capital community.

Springboard Enterprises, a “national, non-profit venture dedicated to increasing women’s participation in the equity capital markets as both entrepreneurs and investors” out of Washington, DC, hosts an annual venture capital forum series. Started in 2000, these forums provide a venue to connect women-owned high-growth businesses with equity funding by allowing selected companies to present their businesses in front of an audience of venture capitalists.

“There is a need for better networks and more mentors for women entrepreneurs” Springboard President Amy Millman tells Local Tech Wire. “You do business through who you know and you seek out what you know. What we found was that many investors simply didn’t know these (women owned) deal opportunities were out there.”

Dispelling the myths

Recently, The Kauffman Center for Entrepreneurial Leadership, in collaboration with The US Small Business Administration, the National Women’s Business Council, and several researchers from Boston University, the University of St. Thomas, Indiana University, the University of Missouri Kansas City and Harvard University began a multi-year multi-university project, the Diana Project, “dedicated to the study of women business owners and business growth activities”. The first study released focuses on eight myths surrounding women business owners and equity capital. Participants in Springboard’s Venture Capital Series were analyzed in the Diana Project initiative.

According to the data collected in the study, all of the myths identified were proven to be exactly that: myths.

The eight myths addressed are:

No. 1: Women don’t want to own high growth businesses.

No. 2: Women don’t have the right educational background to build large ventures.

No. 3: Women don’t have the right types of experience to build large ventures.

No. 4: Women are not in the network and lack the social contacts to build a credible venture.

No. 5: Women don’t have the financial savvy or resources to start high growth businesses.

No. 6: Women don’t submit business plans to equity providers.

No. 7: Women-owned ventures are in industries unattractive to venture capitalists.

No. 8: Women are not a force in the venture capital industry.

Some interesting facts uncovered debunking the eight myths are:

  • The average amount of funding sought by women-owned firms seeking venture capital was $10 million — well within the range of the average start-up investment for men-led ventures.
  • More than half the applicants estimated their target markets to be international in scope and averaging more than $15 million.
  • Of the Springboard applicants, 49 percent had graduate degrees and 18 percent of those were MBAs. 31 percent had graduate degrees in science and technology.
  • In a study still in progress, results show that the percentage of women in top management in public companies has steadily increased each year. As of 1996, 41 percent of companies going public that year had women in top management as compared with zero in 1988 and 27 percent in 1993.
  • Springboard applicants seeking venture capital reported using extensive formal and informal networks and contacting up to 30 potential investors and making 12 formal presentations.
  • One third of Springboard applicants had already raised an average seed investment of $325,000.
  • Since January of 2000, seven Springboard Venture Capital Forums have showcased 200 presenters. To date, these presenters have raised $650 million in equity capital.

Advice from local leaders

So, what are women supposed to do? Local female leaders have their own tips and advice for women entrepreneurs.

Kathy Twiddy, an attorney working with high-growth and technology clients at Kilpatrick Stockton advises women to “Find out what the valuable networking organizations would be for your business (for example, North Carolina Electronics and Information Technology Association’s Women In Science and Engineering program, Council for Entrepreneurial Development, National Association of Women Business Owners), and become actively involved in those organizations, not just as a bystander. “

Sallie Shuping Russell, General Partner at Intersouth Partners says “Find and build a mentor relationship based on trust — gender doesn’t matter. So much of the financial markets are based on who you know. Also, as a woman, be receptive to your intuition. Hone and nurture it as part of the decision making process”.

The results are in. Women leaders, in true entrepreneurial style, are seizing the moment, raising awareness and creating opportunities for themselves where they do not already exist. If perception is in fact reality, they recognize that perceptions can be changed and are working to that in order to make their reality what they want and need it to be. There’s an old saying that says “wishing does not make it so, but doing does”. To paraphrase the famous Nike slogan, these women are just doing it.

Ideas for story? Feedback? Jennifer Tilden can be contacted at entregirl@aol.com