There’s a phrase I hear in the venture capital world all the time: “Invest from your network; invest in people you know.” I get it. There needs to be a huge amount of trust between investors and entrepreneurs and what better way to establish trust than by reaching out to people in your networks through referrals and existing relationships? The problem is: what if your networks aren’t diverse enough? How many talented founders are getting overlooked, simply because they’re operating outside of certain networks?
I grew up in New Orleans, one of the more diverse cities in America. I lived in multi-ethnic neighborhoods and attended diverse public schools growing up. I’m lucky to have a big, sprawling family with members that span the gender, race, and sexual orientation spectrum. However, I still face challenges in making sure my network is diverse enough. As I’ve advanced my career in the technology, entrepreneurship and investing space, it’s been more of a challenge to maintain the level of diversity that I was accustomed to in my childhood. This is a journey and I’m the first to admit that I have more work to do.
In a global, digital economy, there’s no question that diversity is critical to success. I think that as investors, we need to find more creative ways to reach outside of our existing networks to find deals. The next wave of innovation may come from overlooked talent in unexpected places. This will mean stepping outside of our comfort zones more often. Most of us in the entrepreneurship space are already used to being bold, taking risks and trying new things, so this shouldn’t be too much of a stretch.
There is still a need for groups that focus on moving the needle for certain demographics, but it’s important to keep in mind that you don’t have to identify directly with one of these categories to engage with these groups. Most are very inclusive of allies who want to be supportive of the diversity movement and who want to expand their networks. So, go to an event, or better yet, sponsor an event or offer to volunteer your time.
There’s still a lot of work to be done in achieving diversity in the entrepreneurship space and it’s everyone’s problem and everyone can and should be a part of the solution. I’ve been hearing from white men on our mailing list recently who are wondering if our movement is for them and are grappling with their role. The answer is simple: Yes — we all can play a role.
Start expanding your networks.
Step outside of your comfort zone.
Hire more diverse talent.
Fund diverse founders.
Fund organizations working towards diversity in entrepreneurship.
There are now 56 ways to list your gender on Facebook. We live in an era in which gender, race, sexuality, and ability are more fluid than ever before. Breaking down these boundaries is exciting and can help us to build a thriving, innovative future for all. Enough talk. Let’s start with our actions and our money. #FundingForAll.
Join our program this fall to learn more about making an impact by investing in women entrepreneurs of all colors.
Invest Outside Your NetworksElisa Miller2020-04-02T12:57:24+00:00
After a recent acquisition deal that freed up some of my time for new ventures, I thought a lot about where I want to put my focus and energy next. One idea emerged clear and strong: Invest in Women.
Multiple exposure shot of a young businesswoman superimposed over a city background at night
Why is this meaningful to me and why should it be important to all of us? By investing in women, we can make money, make an impact and create a better future for everyone.
A huge, untapped financial opportunity
The first goal of most investors is to make a financial return. The data shows that diverse teams perform better and yet, less than 10% of venture capital funding goes to companies with women on the founding teams. Even investors who are purely focused on financial gains, such as Kevin O’Leary from SharkTank admit that the data favors companies with female founders. Furthermore, women lead consumer spending and having their perspective on a founding team can be invaluable.
It’s projected that women will control 75% of discretionary spending around the world by 2028. (Boston Consulting Group)
I believe in diversifying our portfolio in the truest sense of the word. It’s time to transcend unconscious bias and build a portfolio that’s consciously inclusive of founders from different genders, races, sexual orientations, backgrounds and more.
Venture-backed, women-led tech firms bring in 12% higher revenue than male-owned tech firms. (Kauffman Foundation)
A lack of diversity in many of today’s high growth companies is creating culture problems that are having an adverse effect on the bottom line. We’ve all heard the stories about Uber, Zenefits, and the list goes on. We can address that proactively by building and investing in companies that focus on diverse, healthy, thriving cultures at all stages.
A chance to make a real impact
Technology is creating tectonic shifts in nearly every industry and the pace of change is accelerating. If we’re going to create a thriving world that’s just and peaceful for all, it’s critical that we have diverse voices at the table defining what we create next and determining our approach. Are we entrusting humanity only to white college men in hoodies? Shouldn’t we have all genders, races and cultures building the future together? Who would want to live in a world in which mothers and grandmothers did not also have a voice?
A woman multiplies the impact of an investment made in her future by extending benefits to the world around her, creating a better life for her family and building a strong community. (USAID)
Diverse teams create better products and user experiences. For instance, here is a recent story about a soap dispenser sensor that doesn’t recognize darker skin tones. Also, when women are not in the room, their needs are often overlooked and mistakes can be made that prove costly and in some cases, fatal. For decades, crash test dummies were only modeled after male bodies and more women were injured and killed in car accidents as a result.
As technology plays a more powerful role in healthcare, and as we add cyber enhancements to humans, what other mistakes will we make if we don’t have diverse perspectives in the innovation sector?
The thesis is simple: by investing in diverse teams now, we stand the best chance of building a prosperous and thriving future for all.
I was thrilled to have the opportunity to sit down with Joanne Wilson, one of the most prominent and prolific angel investors in the startup space to discuss how she’s championing women entrepreneurs through her podcast.
W2: What inspired you to start the Positively Gotham Gal podcast?
I have been writing a blog post every week called “Woman Entrepreneur of the week” for the past 6 years. It was time to tell the story of the countless women entrepreneurs out there in a new format.
W2: Why do you feel that it’s an important time to support women entrepreneurs?
The only way that we will see true gender equality is when more women become household names from growing companies that will either get sold, go public or make a difference in how we live our lives. When that happens it gives the next generation of young women the ability to look to role models and say “I can do that because she did” and never once believe that the world isn’t their oyster.
W2: What’s one of the most surprising things you’ve learned while creating the podcast?
I really enjoy chatting with people about their history, their insight, their businesses and more, so it is the perfect medium for me.
W2: As an investor, what’s one thing you’d like female founders to keep in mind when going out for funding?
When someone isn’t paying attention to your pitch and it is obvious that they could care less about your business, then pack your bags and leave the meeting. You want people to invest in you that are as excited about your business as you are. I have heard countless stories of women being treated in ways that are unacceptable and it is up to us to cut off that type of negative behavior and walk out of those meetings…and then of course spread the word. There wouldn’t be investors if there weren’t entrepreneurs. There should be respect on both sides of the table.
W2: What’s next for you and how can our community offer support?
I am always growing and changing. I’d be thrilled for people to tune into my podcast and read my blog. I care about the women entrepreneur community and I hope that the thoughts that I put out there resonate and make a difference.
On a recent NYC trip, I was delighted to have an opportunity to interview the brilliant and exuberant Meghan Cross from Red Bear Angels. As an active startup investor, she was generous in sharing her perspectives and fundraising tips with the Women 2.0 community.
W2: What was your path to becoming an investor and what inspired you to get involved with Red Bear Angels?
When I graduated from Cornell in 2008, I dove right into technology as a part of Skype’s public relations team. Bringing this Jetsons-like technology into the mainstream was a fascinating experience, but it wasn’t until working on the PR for Foursquare – in the beginning days of the Bloomberg-driven NYC startup boom – that I became completely enamored with early-stage venture. So much so that I joined a then even earlier stage company StyleCaster to help build the company’s marketing team. Through several inflection points many media startups faced during that time, our investors always approached conversations with that keen eye, pattern recognition, and unique perspective one could only obtain from investing as a profession. So once StyleCaster got to a point that it was ripe for acquisition, I decided to transition over to the investing side. While working as a NY-based representative for a large fund out west, I received word that a few Cornell alums were starting an angel group dedicated to harnessing the entrepreneurship of Cornell’s network. I knew I had to jump on the train. With investing and entrepreneurial day jobs of their own, they brought me on as the firm’s manager to kick Red Bear Angels into full gear. Fast forward 18 months, and thanks to the RBA Advisory Board – Deb Kemper, Sam Sezak, Thatcher Bell, Gus Warren, John Alexander, Harvey Kinzelberg, Drew Bagin, & Eric Young – we have invested $5.1M across a wide variety of 20 early-stage ventures founded or led by Cornelians with a group of 500+ members to support this growing network!
W2: How do you find the best startup deals?
It’s too early to determine which of our investments will be the best, as we’ve only been investing for sub-2 years, but our investment activity shows that it is much more common for Red Bear members to take to a company if it came recommended by other founders in our portfolio, our more active investors with deep ties to the Cornell entrepreneurship network, or investors with whom I have worked closely in the past.
W2: What are you looking for in a startup?
Proof of product market fit. There are plenty of great companies built on spec, but I prefer to work with the founders who have deep domain know-how and as a result understand the nuances of the fields they plan to shake up.
W2: What tips do you have for women who are looking to get more involved in the angel or venture investing space?
Build a diligence network and leverage it wisely. There is no better way to analyze a company than by listening to close contacts with relevant domain expertise reveal their candid thoughts, and then synthesize those thoughts into an investment thesis. For instance, any time I look at an investment opportunity in healthcare IT and infrastructure, I discuss it with my friends who are doctors to determine whether it’s a needed problem-solver, a nice to have, or a logistical nightmare to onboard and implement. And any time I’m looking at a new AdTech play, I’ll loop in publishers and Ad Ops specialists to determine how much they would realistically spend on a feature like this. Collecting these data points is key, but the practice of synthesizing these points in an actionable way is what will make you a great investor. I would give the same tip to both female or male investors.
For female investors, in particular, I would simply forget any gender difference, sit in the same posture as other men in the room, speak in the same pitch, and straight up do your job. You too can wear AllBirds and jeans to meetings. Act as if, and the playing field will level itself out. Pick a female mentee while you’re at it, as that’s how we can make sure we’re not evening the ratio purely for the sake of numbers!
W2: What advice do you have for female founders who are seeking funding?
Approach every meeting like a founder; not a female founder. Adjectives can either diffuse nouns or clarify them. “Female founder” fits the former. Instead, use a descriptor to carve out a niche for yourself: A verticalized niche – if backed up by passion and experience – communicates you’re a founder with relevant expertise. “SaaS” “FinTech” or “Ecommerce” founders are far more compelling than “Male Founders,” for instance.
If you’re still looking to use a descriptor as a way to connect with the person across the table, check out a bio for a philanthropic, alma-mater, or athletic-driven interest that you might have in common.
W2: What’s next for you and how can our community offer support?
We are dedicated to building a support network for Cornell entrepreneurs, so any time you happen to meet great Cornell alumni, students or researchers – whether they are founders, investors, or simply experts in their domain – please send them our way!
Meghan Cross, Red Bear Angels
As Managing Director, Meghan leads the operations and investment team at Red Bear Angels. She joined RBA with a decade of experience growing media & software companies in NY & SF. As an early Director at StyleCaster Inc., Meghan led the digital media conglomerate’s marketing team through the business’ exit to She Knows Media. Prior, Meghan was in PR, helping to build Skype and Foursquare into household names. She draws venture experience from working with Bowery Capital, Foundation Capital, Metamorphic Ventures, and StarVest Partners. She is the founder of Cross Venture Services LLC, a launch advisor to such commerce platforms as Sailo (TechStars ’15), Shareswell, and Thursday Boot Co. Meghan has appeared on CNN’s “The Situation Room” with Wolf Blitzer and NBC’s “The Today Show,” and has contributed to TechCrunch. Meghan received her B.S. in Fiber & Textile Science from Cornell University and M.B.A. from Columbia Business School, where she was also Steve Blank’s TA. She resides in New York City and serves on the junior boards of Lincoln Center and the Facing History Organization.
What you should know about fundraising for your startupElisa Miller2020-04-02T12:57:45+00:00