Women’s Funding and Women in Business with Geri Stengel
April 11, 2019
Language I/O Co-CEOs Heather Morgan Shoemaker and Kaarina Kvaavik know firsthand what it’s like to deal with gender bias and discrimination in the workplace. They experienced it while working for corporate America and they experienced it when they first started Language I/O and were looking for investors. Naturally, one issue that’s near and dear to both of their hearts is creating gender parity.
For years now, Language I/O has been following researcher and author Geri Stengel on social media. The author of “Forget the Glass Ceiling: Building Your Business Without One,” Stengel focuses much of her attention on women who are thriving in business. Stengel is a frequent Forbes contributor and founder of Ventureneer, a content marketing, market research and education company that works with companies like American Express, Dell and Intuit to provide branded research and content opportunities that generate visibility, thought leadership and brand loyalty.
Stengel is also involved in SheEO, an international collective of women who each contibute $1,100 to pool their resources to help fund women-owned business. We’ve always enjoyed Geri’s content and are grateful that she recently had a few minutes to chat with us about women in tech. Here’s what we learned from the woman who describes herself as, “A baby boomer with the heart and soul of a millennial.”
Q. How have you seen venture capital (VC) bias affect female entrepreneurs?
A. I came out of the corporate world and experienced much of the bias that is talked about now. I was in the corporate world in the 80s and 90s. Gratefully, things have improved since then but there still are a persistent problems. When I left corporate and started my own company, I thought things would be better. I became active in the National Association of Women Business Owners in New York City. In many ways the challenges women face as business owners are worse. However, because as an entrepreneur I have greater control over my destiny, I prefer the entrepreneurial world. As a researcher, started looking at the numbers. My company, Ventureneer, does the State of Women-Owned Businesses for American Express. It’s done work for Dell, the National Women Business Council. I also rely on other people’s research such as PitchBook.
Q. Can you highlight some of those key findings?
A. One thing that’s really critical is to have diverse leadership. The more diversity we have, the better companies perform. When referring to the percentage of venture capital female founders receive, most people use the 2 percent number. While that number is correct, it requires context. The 2 percent refers to all female founder teams, which aren’t diverse. In my opinion, the better number to use is 11 percent, which is the amount of venture capital companies that have at least one female founder have raised. In 2008, that number was seven percent. By 2018 the number rose to 11 percent.
Obviously, that number needs to be improved. If you look at earlier stage round such as angel/seed and Series A stage, numbers are improving faster.
Q. Why is that?
A. Generally, the early stage numbers are improving because there are more women involved in investment decision at the early stage. There are also so many female founders who have fabulous business ideas, great experience and are passionate about what they’re doing. Unfortunately, their ideas are often not understood by male VCs. Over time you will see improvement and I think that’s because everyone is writing about it and men are slowly but surely getting it.
VCs are starting to bring women onto their investment teams, but I think it’s going to be a good five years before you really see a big impact in the numbers.
Q. What is SheEO, how is it funded and why does it matter?
A. I’m an activator for SheEO, which provides interest free loans to women entrepreneurs. Few companies – only one percent – raise equity financing. The other 99 percent grow organically or use debt to grow.
Activators make a $1,100 contribution. Of that, $1,000 goes to the entrepreneur and is a chartable deduction. $100 goes to support infrastructure and overhead. We vote on the women who win the funding. The money goes into a kitty of about $500,000. Five winners divide up the kitty.
Q. What was appealing to you about this funding model?
A. It’s important for entrepreneurs to have access to debt and there’s nothing better than interest free debt. Kiva does that too, but it lends much smaller amounts of money. The other thing that’s really appealing to me about this funding model is that the entrepreneurs get to ask the activators for things they need—it could be advice; it could be introductions to the media or another company. That’s about as close as non-accredited investors can get to being an angel investor.
Q. What advice would you give to a woman founder who is seeking funding?
A. The advice would probably be the same for all entrepreneurs. You have to get used to receiving nos. It’s not personal and you have to build up that resiliency and grit and just keep on going.
Being resilient is really, really important.