Can women get venture capital funding? The arguments on both
sides are equally persuasive.
Venture capitalists say they consider profit potential, not
gender, when looking for deals. But despite this apparent
neutrality, women only got an estimated 4 to 5 percent of the $38
billion invested in the United States in 1999.
"More women are being funded today, and there are a number
of highly qualified women seeking funding, but relative to the
total market, the numbers are small," says Willa Seldon,
general partner with San Francisco-based Viridian Capital, the
newest SBA-backed small-business investment company (SBIC)
targeting women entrepreneurs.
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But, Seldon adds, the numbers are improving. She attributes the
change to several factors: women entrepreneurs being
better-prepared to seek capital, more venture capitalists looking
to fund women and more women working at established venture
funds.
Sharon Hadary, executive director of the National Foundation for
Women Business Owners, views the discussion as a sign of how far
women have come. "When we first started, we worried about
issues like banking relationships, access to credit and
[convincing] banks that a woman-owned business is viable," she
points out.
Acknowledging that the market is still clearly under-served,
Hadary speculates that preparation is part of the problem. She
believes that while some women have the management teams and skills
financiers like to see, most don't.
Another obstacle is that most venture capitalists only look at
proposals recommended by people they know, and "a lot of
venture capitalists don't have women entrepreneurs in their
circles of friends," says Kay Koplovitz, CEO of New York
City's Koplovitz & Co., a media investment firm. She says
the percentage of women getting equity capital is anemic.
To ameliorate the negative fall-out from fighting the
good-old-boys network, Seldon says Viridian reviews every business
plan that comes its way, but only invests in less than 1 percent of
the proposals.
Another development that may help circumvent women's lack of
access to venture capital is the growing number of women angel
networks. There's no definitive list of these organizations,
but Koplovitz has found networks in cities like Seattle; Boston;
Washington, DC; and Cincinnati.
As more women entrepreneurs move into the ranks of investors,
the amount of venture funding available to women, as well as
women's overall chances of obtaining equity financing, should
increase.
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