Friends for 25 years, Hedy Ratner and Carol Dougal finish each other's sentences and trust one another completely. They're the women behind the Chicago-based Women's Business Development Center and have been fighting for women's economic empowerment for 20 years. Says Ratner, "When we started the center, it was an extension of our frustration that women still were not reaching parity and equity in the marketplace."
In 1986, Ratner and Dougal, then in their 40s, poured all their time and energy into the creation of a center that would provide women with the resources they need to pursue their entrepreneurial dreams. The battle was long and hard as they struggled for more than a year just to get funding. Says Dougal, "We faced challenges that were analogous to [those] that women were facing when trying to start their own businesses."
Now, the center has served more than 50,000 women; facilitated over $35 million in loans; impacted federal, state and local policies; and helped certify countless companies as Women's Business Enterprises. And though challenges such as gaining access to capital, debt equity, and business opportunities still exist, Ratner and Dougal are optimistic. Dougal says they are encouraged by the new women entrepreneurs in their 20s and 30s who "are dreaming big, just like the boys."
The duo continues to work with as much passion as ever. "It's exciting, because you wake up every morning [and] look at the opportunity for changing the role of women," says Ratner. "That's a big deal."--Sara Wilson
Cracking the Code
It's no secret: Women entrepreneurs get short shrift when it comes to venture investment. Even when venture dollars peaked in 2000, the typical venture-backed company was still run by--and financed by--men.
Little research has been done on this subject, and even less on its root causes, but the situation is starting to get the attention of civic and business leaders. Now, their efforts to correct the disparity are cracking open the door to venture capital financing for women entrepreneurs everywhere.
A landmark 2004 study by Growthink Research found that only 4.1 percent of venture dollars go to women-led companies. Since then, studies by other groups have shown similar results. "Depending on what study you read, you'll get 4 percent to 7 percent," says Nancy Sullivan, director of the Center for Women Entrepreneurs in Technology at Northwestern University in Evanston, Illinois. "The number is miniscule, what-ever study you read."
The Center for Women Entrepreneurs in Technology is one of several organizations to recognize and support the key role that women play in emerging businesses. Others include the Kauffman Foundation's Women and Minority initiative, and Springboard Enterprises, a nonprofit that works with women entrepreneurs seeking VC funding.
Amy Millman, president of Springboard Enterprises, says these efforts are already making a difference, as the number of women-led companies receiving venture funding is finally on the upswing. "It's not a tsunami," she says, "but relatively speaking, it is an amazing change." Context is key to understanding the problem and its solution, says Millman. "Women have been in the professional world with degrees and credibility in the technology field for only about 10 years." Since venture-backed companies tend to be tech-heavy, Millman is not surprised that women have historically been underrepresented.
One woman entrepreneur who has both raised capital and invested in early stage companies is Mary Baker Anderson. As president of consulting firm Calipa Partners in Seattle, she mentors women on how to get the attention of venture funds and angel investors. "The good old boy network is alive and well," says Anderson, adding that this network will remain largely closed to women as long as finance and business leaders harbor basic gender biases and stereotypes. "There aren't many role-model women, and the ones that [exist] are so busy being successful, they aren't giving back."
Nonetheless, the growing number of support organizations seems to confirm that women entrepreneurs are building "fundable" companies but simply lack the skills and the opportunities to pitch their businesses to qualified investors. Breaking into this historically male-dominated network requires women to think and act in ways that might be uncomfortable, suggests Millman of Springboard.
Fundraising success comes from telling investors what they want to hear-and investors want to hear about the money. "But you pitch what you're comfortable with, and women often pitch their product," Millman says. "If you're asking for $10 million, the investors wants you to be in their face, and [most] women can't do that--it's so against their grain." To help women make the right presentation, Springboard assigns a team of mentors to each client and takes her through a rigorous investment "boot camp."
The results can be amazing. Graduates of Springboard's boot camp have gone on to raise hundreds of millions of dollars. Star examples include Helen Greiner, co-founder and chairwoman of the board of iRobot, which makes the Roomba vacuum cleaner, and Deborah Manchester, president of Zula USA LLC, an educational content production company in Studio City, California. Manchester says the focus and confidence she gained at Springboard helped her raise over $7 million to start production of an educational TV show, The Zula Patrol, that now runs on PBS.
"It's a pretty incredible process," Manchester says of the Springboard boot camp. "It really helps you focus on what your message is--for the company and the investment. Over a six-month period, it was refined and further refined, so finally I could tell you everything within just 10 minutes."
Successes like Greiner's and Manchester's are paving the way for more women entrepreneurs. "The more we train women entrepreneurs and give them access to investors, the better off we're going to be," says Anderson. "There are groups all over the country now [helping women get financing]. There's a huge population of women who have a lot to contribute, and we have to figure out how to effectively allow them to do so. And there are a lot of people committed to that."--David Worrell