Issues Facing Women Raising Capital

It has been suggested that limited access to "old boy" networks and a male-dominated financial industry has posed challenges for women seeking growth capital. Those conditions partially explain why women gain just 6% of the $69 billion of venture capital available in the U.S.,” says Ilse Treurnicht. “Still, women don't make it easy on themselves, either. A passive style, conservative attitude and inability to "talk the language" are just some of the factors holding women back.”
The good news: perceptions are slowly changing and there is money available for solid, high-growth firms that can adequately communicate their promise to investors. If you are female, grow some thick skin and deal with the stereotypes early on in your conversations. Here are a few:
• Woman entrepreneurs do not want to grow their business as quickly as men do.
• Female entrepreneurs just don’t ‘get’ how to source funding.
• Lack of networks is one reason for women’s challenges. When women were asked about their networks, they listed various men’s names. When those men were asked about their networks, they did not mention the women.
Before you write to your local newspaper to complain about the above list, take a breath. Let's go to the facts to verify these issues. What is true are the statistics on male- versus female-run businesses which illustrate that female companies may grow at a slower clip, but they tend to have a higher survival rate.
Understand that, when it comes to accessing private equity, Fund Managers favour the growth versus survival factor. It’s only logical that when you go about raising capital, your pitch must be at growing the business, otherwise leave private equity to the more aggressive CEOs. Keep on doing your slow growth but do not expect private equity investors to invest.
Barbara Orser, professor at Carlton, reiterates that critical point, “Here’s the bottom line for women: only entrepreneurs who start robust, high-potential businesses - and communicate that promise - will get the money they need.” Smart women understand that thinking, and reassure investors by spending more time on illustrating their ambition when reaching out to the VCs.

Are Women Capable of It?

I am invited to talk about women in business frequently which is always a pleasure as each and every time I learn something new from the audience. I will be speaking at Ivey about women and finance next week which got me thinking...

Over the years I have seen that consumers can be categorized into thousands of groups and the same can be done with women in business. I learnt from a London School of Economics podcast that anthropologists are busy in the corporate world studying arch types or categories of people. The lecturer went on to write her findings about the behaviour of groups of bankers in a book.

Fascinating.

I am of the generation of working women who tried to blend in with the guys, pretending that our shoulder pads and bow ties would help. Since then, we have come a long way in the world of work. To keep on growing, we women need to keep talking about how we are doing and how we can learn from each other.

Have we lost our ability to talk openly about women in work?

I remember back several decades when The Phil Donahue talk show did a fiery series of audience discussions on whether women should work in the armed forces. I can still see the reddened faces of the women as they stood up, facing off against each other with all their stereotypes of what could go very, very wrong. At first, these ideas seemed to support why women should not put on camouflage uniform.

Back then, I was agreeing with the women against women in the armed forces.

But Phil Donahue's ability to bring out all the stereotypes and look at them one-by-one, picking apart the logic, succeeded in convincing me that women who wanted to do the job should get the opportunity. Look where they are today. I learnt then that talking about stereotypes was a useful exercise to do instead of shouting sexism (which my university training sadly encourgaged me to do).

So I thought I would address women and financing and hope you will agree it is a positive to look at the stereotypes investors may hold and how women can overcome these.

After all, I worked through my stereortypes of women in the armed forces and my brother is married to a former soldier and, man ,can she fish, shoot, hike and camp.

Also, as an aside, Phil Donahue lost his crown as top American talk show host to Oprah Winfrey. Now there's a woman who knows how to do business.

Cash is King for General Motors

Governments around the world are being sucked into GM's financial situation. As GM wolfes down government (your) money, government leaders are learning how hard it is to be investors. "As we await the likely General Motors bankruptcy," says Edward Harrison of the site Credit Writedowns. "I think it bears discussing how political this process has been and will continue to be."
"General Motors is a monster company employing a quarter million people worldwide. It sells $150 billion in cars – or at least it used to. It is not just a producer of vehicles. It is also a supplier. It has been through several joint ventures and has owned a number of foreign manufacturers, Isuzu and Opel being but two. In short, the company is a very big player, financially, economically and politically. Yet, somehow you get the impression that many in the financial media think we could just turn the lights out and go home. This is just not the best option." Watch Edward explain this further:

Presenting Your Company to Fund Managers

If you are a start-up, enjoy this web site. More Cartoons.

What would Marx Do?

When it comes to banking, many governments are now owners or part owners of their nation's banks. For retail banking (which has become a commodity) this may be a good development. Leave the higher risk financing to private equity and keep the meat and potato transactions for retail banking. It means that the people are not left drowning from this popped, speculative bubble while the bankers who created this situation are sitting on piles of bonus money.

Marx would approve of state ownership of retail banking. When you look at the losses to ordinary people's lives, Marx may have a point even if his personal grooming might have been "challenged".

It has become obvious now that the “old normal” was simply unsustainable. The “new normal” must be very different. It is far from clear that the industry and government recognise this grim truth. Here's a good article along this theme:

By Martin Wolfe:

Jacoline Loewen is a partner at Loewen & Partners, private equity for companies over $10M in revenue.