Ivey Business Plan competition shows that investors like female businesses

Rick Spence captured the comments given at the Women Entrepreneurs of Canada conference (WEC, is run by Carrisa Reiniger) and one thought was that male investors do not get women's businesses and do not invest. I have personal experience that shows me that assumption is so 90's, but no long relevant in 2010. In fact, Loewen & Partners raised capital for the female led day care firm, Kids & Co, and it does not get more estrogen laden than that. I did notice at the time that the male investors did not even twitch an eyebrow at gender or business focus. After all, as one of the male fund managers said to me on my question about the relevance of gender, "Lululemon is one of the biggest Canadian private equity success stories out there and it is a female product company."
I wrote a letter to the National Post to comment because, honestly, it bothers me when entrepreneurs hid behind some "victim" stereotype instead of facing their brutal facts that they are not clicking with investors because their business is simply not sustainable. If these female entrepreneurs faced the brutal truth, they would be able to adapt all the sooner and go on to get the money they deserve.
For full article: http://bit.ly/whogetsvcmoneymore

Reluctant Partners, Feb. 1.

At the start-up stage, if you look at the Ivey Business Plan competition, for the past two out of three years, a female lead team won. This competition is judged by Bay Street's toughest investors. A female team that did not make it to the finals, Peer-FX, went on Dragons Den and won a deal. That female leader is still in business because she is good at what she does. I wrote an article at the time and asked her about being female in business. I was not surprised when she said it is just not part of her thinking.

Whether you have a uterus or testicles, investors want to know how much money you will make, when will they get their money back and will it be more than if they put it in a blue chip stock in the stock market? If you can show you can give that potential, you will attract investors. End of story.

Barbara Orser, professor at Carlton, has done research to back up these points and says only entrepreneurs who start robust, high potential businesses will get the money.

I do agree that it would be good for women to network and support each other more.

Jacoline Loewen, Loewen & Partners Inc., Toronto

Read more: http://www.nationalpost.com/opinion/story.html?id=2538961#email#ixzz0f9NoetUr 
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And how is the Canadian economy doing?

"When we see government stimulus end and the private sector to walk on its own two legs, I will feel a lot more confident," says David Rosenberg, Chief Economist & Strategist, Gluskin Sheff + Associates Inc.

David spoke at YPO Leadership conference and gave the strong message that he is looking for sustainability. For investors, the market is being driven by government stimulus. This is the reason he is a bear on the US equity market. Canada is different as it is financial and commodities only, so much less of a diverse market. Resources have driven up the value of the Canadian dollar.

Look for multinationals who can benefit from the weaker Canadian dollar - those with Chinese and Indian businesses.

Posted by Jacoline Loewen, author of Money Magnet. See Financial Post video interview.

What do you think of upfront fees?

The Private equity and Venture Capital Group has been running the longest discussion on Linkedin on the hot topic of paying up front fees for capital raises.
Here is one comment that caught my eye"

I've worked with the CEO's and BOD's of many companies in their efforts to raise series A, B, or C capital. The issue of upfront fees normally arises when efforts to raise angel or VC funds have been exhausted and companies reach out to the alternative capital markets. As we all know during the last 18 months the traditional sources of capital have become scarce.In the alternative capital markets, it is common practice for the investment finders to charge upfront fees and generally these are large sums before beginning any work.

That being said, I have recently, through close long-term contacts in the VC industry, been introduced to an investment capital finder who does a great job raising capital and unlike investment capital companies like Bain, Goldman and others who charge large upfront fees. Loewen & Partners does not. 

Rather they  take a strategic partnership approach with company CEO's who have a business model they think can be executed successfully by charging a modest monthly cost share during the capital raise period. They don't want to make money on the front end but rather taking a strategic partnership approach with their clients, money is made on the back end of the deal when the capital closes escrow.

Loewen & Partners' business model makes complete sense to me as a outsider and business person. They have some skin in the game utilizing staff to zero in on sources of capital that would be a good match with the entrepreneur's business model. And with the cost share model , the entrepreneur has skin in the game preventing him/her from window shopping for money and then just walking away when the capital sources are brought to the table to negotiate the terms sheet. 

In my opinion, If you can find a similar capital finder who will do a cost share approach during the raising period, rather than charge large up front fees, you will have a win/win approach in raising your capital needs.

Peter's Question

“If the company disappeared, would it be missed?”

This question was posed by the thoughtful Peter Barlas, a portfolio manager at KJ Harrison, a company that invests high net worth individuals’ money. Peter was taking us through his logic in picking companies for this next stretch of market which is going to have "S" curves with oil slicks galore. 

If you want to know his stock picks, which I thought to be shrewd, you can get hold of him at KJ Harrison.

Now, what about you, what companies would you miss? Philip Lieberman, KJ Harrison, told me he would miss Gillette, but not Crate & Barrel, which is why retailers are falling from favour currently. For me, Apple would be a big black hole; their podcast feature alone has changed the way I get information.

If you are considering attracting money to your business, Peter’s question is a good one to ask each and every day. Would your company be missed? If not, why not? What would be the much requested features? That could add to your valuation.

What happens to companies with private equity?

Financial Post's John Turley-Ewart discusses private equity with author and entrepreneur Jacoline Loewen.

Watch the video
http://www.youtube.com/watch?v=nnfT3110upo&feature=related