Center for Women & Wealth

According to “The Diana Report – Women Entrepreneurs 2014: Bridging the Gender Gap in Venture Capital,” only 2.7% of all venture capital-funded companies have a woman CEO, and 15% of all venture capital-funded companies have one woman on the executive team. Following its release, the report, which highlighted the challenges that women face acquiring capital, garnered global media coverage, interest from policymakers and over 1 billion views.

On June 5, 2019, Babson College’s Center for Women’s Entrepreneurial Leadership convened more than 250 investors, accelerators, policymakers, researchers, founders and other disrupters dedicated to changing the landscape of financing women entrepreneurs.

Four Considerations Before You Start to Sell Your Business

Four Considerations Before You Start to Sell Your Business

Here is what people were talking about:

The Pipeline Issue

Today, only a fraction of venture capital funding goes to women-led companies and people of color. What is contributing to this funding gap? The driver of the issue may stem from the supply side of capital, where there is a lack of investor diversification. If the goal is to get more funding to women and people of color, then women and people of color need to be on the investor side funding entrepreneurs.

Barriers to Entry

Why don’t we see more women and people of color on the investor side? Some barriers that prevent them from investing include:

  • Lack of Awareness: Many women are not familiar with angel investing. They don’t know other angels, and they don’t see deal flow.
  • Need for Education: Angel investing is risky, and many investors must overcome the fear of making a big investment into something new that has a high risk of failing. Resources and tools that will help investors learn about angel investing are needed.
  • Access to Investments: Many angel funds have high minimums and charge high fees, inhibiting individuals from getting into early-stage investing.

Rethinking the VC Model

The objective of many venture capital firms is to find unicorns. Instead of hunting unicorns, investors may want to look for zebras – high-growth companies that will make a return and help the ecosystem. Many entrepreneurs do not want to scale their business just to have to sell it. There is an opportunity for the industry to design funds and capital structures (for example, flex equity and royalty financing) that work for entrepreneurs while offering investors solid returns.

Tips for Pitching Success

  • Lead Like You Know the Game: Be confident that you have a great idea that should be funded.
  • Get Beyond “No” to “Yes”: You will get 99 “nos” before you get a “yes.” Keep going. Raising money is difficult.
  • Lead with Your Story: Focus on pitching your story and sharing your vision for your company’s future. Be dramatic.

Lasting Change

The industry will change when we have more examples of successful women-owned companies that catch the interest of venture capitalists. When investors see that they are missing opportunities by not investing in women, they will realize that they must change their networks to find and get in front of new entrepreneurs.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Compliance Notes:

Brown Brothers Harriman & Co. (“BBH”) may be used as a generic term to reference the company as a whole and/or its various subsidiaries generally. This material and any products or services may be issued or provided in multiple jurisdictions by duly authorized and regulated subsidiaries.

This material is for general information and reference purposes only and does not constitute legal, tax or investment advice and is not intended as an offer to sell, or a solicitation to buy securities, services or investment products.

Any reference to tax matters is not intended to be used, and may not be used, for purposes of avoiding penalties under the U.S. Internal Revenue Code, or other applicable tax regimes, or for promotion, marketing or recommendation to third parties.

All information has been obtained from sources believed to be reliable, but accuracy is not guaranteed, and reliance should not be placed on the information presented. This material may not be reproduced, copied or transmitted, or any of the content disclosed to third parties, without the permission of BBH.

All trademarks and service marks included are the property of BBH or their respective owners.

© Brown Brothers Harriman & Co. 2019. All rights reserved.

PB-02984-2019-06-26