Silicon Valley has long been accused of being a closed boys’ club. But today, women entrepreneurs are cracking it open, creating initiatives and opportunities in their wake.
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It’s a common charge — Silicon Valley is “a boys’ club.” However, it’s not just a spurious claim. A 2011 University of California, Davis, study, entitled “California Women Business Leaders,” shows that “women hold 1 in 9 of the top corporate spots” in the state’s 400 largest companies. And according to a report at SFGate: “Silicon Valley is the most male-dominated of any region. In last year's study, of the 113 firms in [the area], 42 had no women on the board of directors or in the top five highest-compensated positions.”
Not only are a relative handful of women entrepreneurs getting funded, but nationwide, women make up 12 percent of all venture capitalists at best. This is nothing new, claims business legend Kay Koplovitz, founder of USA Network and chairwoman of Springboard Enterprises, a nonprofit organization that helps women accelerate their path to equity markets.
Koplovitz remembers her epiphany — in the midst of the dot-com boom (when the number of women entrepreneurs surged), women-owned companies only got a mere 1.7 percent of the billions of funds invested in 1997. Curious, Koplovitz asked the VCs she knew, “Do you see women? Do you invest in them?” And she was frankly told, “No, we don’t see them.” She realized that women entrepreneurs weren’t being rejected, but rather weren’t visible in the first place. “There was a disconnect,” she recalls. “Women were just not in the game.”
Realizing she “needed to create an ecosystem friendly to women entrepreneurs,” Koplovitz co-founded Springboard Enterprises in 1999. The organization is dedicated to building women-led businesses by offering education, networking and other forms of support.
Like Koplovitz, Lauren Flanagan was an exception to the norm. Her WebWare company (one of the first software-as-a-service, or SaaS, firms) got funded in 2000. Inspired by that experience, Flanagan went on to start an angel fund, Phenomenelle. Today, her new early-stage angel fund, Belle Capital, “sees tons of deals [from women-owned businesses].” Flanagan adds, “but I can’t fund them all.”
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Both Koplovitz and Flanagan see a brighter future as more women go into science and engineering. They’ve recently noticed more women mixing with men on startup teams, and more women in the C-suite — and that gives them hope.
A place of their own
But it wasn’t always that way. That’s why Koplovitz started Springboard — since women weren’t allowed in the boys’ club, they needed a place to go. “It’s all about the building out of networks,” she says, “specifically about the human capital.” You don’t get funded by “cold calling,” Koplovitz says. “Someone has to bring you to the dance.” She predicts women-owned enterprises will become so prominent, “the guys are going to want to be in our club.”
And she notes that while Silicon Valley is slow to embrace women entrepreneurs, the current funding scene in top markets has seen a bit of an improvement. Koplovitz says women-owned businesses fare better in Boston and New York (the second- and third-ranking cities for VC funding overall) because the types of companies making deals — more biotech in Boston, and more digital media, fashion and consumer products in New York — are owned by women.
Flanagan notes that women control more than 50 percent of the wealth in America, yet make up less than 10 percent of early-stage investors. But she believes this will change as more women (the baby boomers, in particular) approach what Flanagan calls “Chapter 2” in their lives and become more interested in investing. She predicts this will help more women-led businesses get funded — not because women VCs give preference to women, but because investing in these businesses simply makes sense. “The biggest growth is in the female market,” she adds.
So far, Springboard has certainly made an impact. It has helped more than 500 women-led businesses get funded (to the tune of $5.5 billion), including 10 IPOs of household-name companies, like Zipcar, iRobot and Constant Contact. Eighty percent of those businesses are still in business today.
The power of human capital
Flanagan says she’s “hugely optimistic” and notes that help is coming from all quarters. Flanagan herself got funding help from the Dell Innovators Credit Fund, a new $100 million financing initiative. She was able to expand her Current Motor Company (which makes electric “super-scooters”) because of connections she made while attending last year’s Dell Women’s Entrepreneur Network (DWEN) conference in Brazil, which is the world’s third-largest market for scooters.
Attending DWEN worked for Koplovitz as well. At the first DWEN conference in 2010 in Shanghai, she made a connection that led to last spring’s launch of Springboard Enterprises in Australia.
Women need to “go out and aggressively build a network,” especially in their industry, Koplovitz advises. “You can’t underestimate the value of human capital,” she emphasizes. “The first time you meet [a potential investor] can’t be when you’re asking for funding.”
Flanagan says more women are graduating from college, getting advanced science degrees, starting businesses and accumulating wealth. She adds, “We now have the chance to make tectonic changes.”
Koplovitz is “wildly optimistic” about what she sees. “Entrepreneurs are undaunted by difficult conditions,” she says, “and millions are ready to take the risk. There’s an absolute feast of opportunities — more than has ever been [available] before.”