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It’s become a common question: Why aren’t there more women in venture funded startups? I speak to venture backed startups all the time. Unfortunately, more often than not, I don’t see a single female on the executive team roster. Over time, I’ve developed a hypothesis. For some reason, in the rare occurrence when I speak to a female CEO, it’s felt to me that I’m much more likely to find another female face on the company roster. It got me curious: Is this true? Are there actually more female executives in female-CEO led companies than male-led companies? If so, there are a number of implications.
To answer this question, Christine and I have done some good ole fashioned data collecting. Unfortunately, this has been a much more time consuming task than we had expected, so we’ve only gone through the US portfolio of three VCs: Accel, my firm Bessemer, and Sequoia (210 companies in total).
Given the small sample size, and the hot-button nature of the subject, let me first disclose what this data set is *not*:
It is *not* statistically significant. There were only eight female CEOs in the sample set.
It is *not* a complete data set. 210 companies out of several thousand.
Christine and I originally pulled this data Sept-Oct 09, so some of it may already be out of date.
Also note: I only counted VP and higher level executives and I excluded companies that didn’t list their executives team on their website *and* didn’t have a LinkedIn profile for the company (i.e. I couldn’t get accurate data). I also excluded companies that only had one executive (the CEO) for the obvious reason they haven’t hired any executives.
Given all those caveats, why publish the data? I can’t help but think this is an interesting dataset to understand, and the initial results are intriguing enough that I think it is worth trying to get more data. That said, Christine and I just can’t do it ourselves. So this blog post is actually a plea for help: I’m posting the data set in Google Docs here. It’s read-only for everyone, but if you’re interested in contributing to the document, please email me and I’ll invite you.
Okay, okay. It’s not complete. You get it. So what did I find in the intial sample?
There were 1219 male executives (90% of sample) vs. 134 female executives (10% of sample).
3.8% of the CEOs were women (8 out of 210). (Which coincidentally, is around the percentage of women who are CEO of a Fortune 500 company – 3%.)
125 of the 210 companies (60%) did not have a single female on the executive team.
For the 134 female executives, the breakdown of the executive roles held by those women is (I thought this was interesting and not what I expected):
Now the money question: In male-led vs. female-led companies, if we exclude the CEOs in both cases, what percentage of the executive team is female on average?
If this turns out to be directionally correct, there are a number of repercussions. But in the absence of a more complete data set, I'm reserving judgment for now. If you're interested in helping flesh out the data set, please drop me a line!
Astia client, London-based, DegreeArt.com is an online marketplace the enables art lovers to acquire the works of new and emerging artists. Astia VP Europe, Evie Mulberry, shared a conversation with DegreeArt founders Isobel Beauchamp and Elinor Olisa to learn more about the story behind the business.
EM: What inspired you to found DegreeArt.com?
DA: We had identified that there was a need to break down the traditional barriers associated with buying, owning and collecting contemporary art. The Internet was the ideal vehicle to bridge the gap between emerging, talented artists and the art buying public.
EM: How do you find your "Artists of the Future"?
DA: We identify and recruit artists who not only posses artistic talent but crucially who, with our support, have the skills required to sustain a career as a practicing artist. This is essential to ensure their work will not only hold its value but represent a potential investment.
EM: DegreeArt.com is considered the UK leader in providing contemporary, affordable art by emerging artists. How did you establish this notoriety?
DA: By making art accessible. The art market is notoriously difficult to crack and we are immensely proud of the name we have established and our brand positioning. Identifying art that people not only want to own but which is created by promising artists has been crucial.
EM: Elinor, you recently stated that “not only is the emerging art market surviving, it has been experiencing considerably more attention than before the markets crashed”. What do you anticipate in 2010 as highlights for the market?
DA: Our top three predictions for the emerging art market in 2010 are:
1) There is an increased insistence from buyers for credible, quality art which is as strong technically as it is conceptually
2)We are seeing increasing numbers of first time buyers accessing art as a way to invest in something tangible and enjoyable
3) We are expecting to see a considerable move away from purely conceptual projects and a return to painting and sculpture at this year’s degree shows as artists look to create work that has wider commercial appeal
EM: You have now participated in Astia’s first European Doing it Right (May 2009), presented at the first Astia European Investor Forum (June 2009), and most recently attended London's Doing it Right programme (February 2-3). How has your participation been impactful for your business and as individuals?
DA: Astia has taken us out of our comfort zone, asking us to evaluate our business and to understand what needs to be done to realize the full potential of the company. Following the June programme, the February Astia days provided us with a valuable opportunity to look back at what we have achieved in the past 8 months and to focus on what we need to concentrate on going forward into 2010. As individuals it has undoubtedly given us a keenness to continue in our goals.
EM: Having participated within Astia's global community, how do you similarly provide a robust network and support for your artist community?
DA: Being an artist is often a solitary existence and the same is true for running your own business. As Astia does for its community, we provide artists with a support structure enabling them to draw on the experiences of others and to request advice enabling them to further their careers and gain greater confidence as the refine their practice.
EM: What is next for DegreeArt.com?
DA: We are working hard to monopolize on our successes of the past years and to ensure that the momentum is not lost. We are seeking to reach broader markets with as we grow the business and ensure that those who have previously felt excluded from the art world are provided with access to all that it has to offer.
You can follow the DegreeArt story, browse the art collection, and purchase your own favorites directly on their website: http://www.degreeart.com/
At the end of December, most papers in the UK run articles accounting everything that went on during the twelve months prior. Lazily scanning my Sunday paper, here came this snippet of an article entitled “The Double X Factor.” The first sentence caught my attention: “In terms of machismo, running a hedge fund is the closest the financial world gets to flying a fighter jet”, observed Christopher Swann on REUTERS Breakingviews.com. I almost gagged. Good Lord not another article on “Barbarians at Gates” or any of that 1980s Gordon Gekko palaver. If there is one thing that as a woman makes me want to smack someone in the face with my handbag is comparisons that create perspectives of the world from a male viewpoint, as if this single tunnel vision would encompass all humanity. Most women have no interest in piloting fighter jets or any other kind of speed artifacts. Excitement associated to risky actions, like speed, is not an enjoyable situation for all peoples. In fact, one could almost draw a direct correlation between adrenaline rushes caused by risky activities and testosterone levels. Against this backdrop, Bloomberg L.P. conducted a study showing that female hedge-fund managers outperformed their male counterparts between 2000 and 2009 – delivering 9% annually, against 5.8% for men. “Double X” funds did particularly well during the crisis, shedding only 9%, compared with the 19% lost by male-run funds in 2008. Bloomberg’s conclusion was that women tend to pursue “less extreme” strategies, and that they save on fees by trading less. In fact, female resilience looks particularly attractive given the industry’s high blow-out rate. Unfortunately for investors, Double X funds are hard to find: it is reckoned that women run just 3% of some 9,000 hedge funds.
Many women hesitate to launch their businesses because the word “entrepreneurship” is tainted by the media with “risk” connotations. These days, when getting fired from a job because of financial crises is more often than not on the regular menu, and being promoted as fast as your male counterparts or paid as much as they make is still not achieved, the thought of taking ownership of one’s professional life does not sound so risky anymore. Most women entrepreneurs that I meet launch their businesses because they feel capable of delivering their visions, want to be their own bosses and have a sense of higher accomplishment when they create product offerings that beat what is available in the market. They do it because they believe they can do it better than the SC Johnsons, the Nokias, or the Googles of this world. What they lack is how to raise funding.
In my 2010 objectives I have taken upon myself at Stradbroke to make it the year that I help some women finally get it together and go for it with their entrepreneurial plans to create big global companies, not just small to medium sized businesses that they can run on the side of bringing up babies. I am talking about the Single Ladies (With or Without The Ring On It) that will go for it for real, to build global successes and not just vehicles that they can run from home to earn the extra cash for the household.
When the barriers went down in media broadcasting, the Oprahs (Winfrey), the Ellens (Degeneres) and the Tinas (Fey ) took the top. Daytime television is what brings the dollar bacon to the networks because this is the primetime spot for the viewers who hold the purchasing power of most households. The night airwaves are too competitive and hence more fragmented. The music industry is also crowning the new revenue earning queen bees – Madonna, Beyonce, Lady Gaga, whilst the little fairies like Taylor Swift are sweeping all the awards back to the hive. The barriers in these industries were monolithic for decades. Nowadays, they’re finally down.
Oprah, Ellen and Tina took the helm of their projects and became producers, creating their own production companies and hence controlling their own product - Oprah now has an “end-to-end solution” because she finally owns her own network. Silicon Valley needs to back more female entrepreneurs because it needs to create an ecosystem of synergies, rather than a myriad of businesses driven by the same dynamics. If women in television and music can create multimillion dollar successes, there must be women capable of delivering the same value in other entrepreneurial ventures that have to do with technology, the sciences or commerce.
The reason why there are no more women-driven technology businesses shares the same answer as to why there are no more women film directors. In both industries, for a project to be put together as an attractive venture to be funded can take years. Moreover, for a funded project to yield financial success can take years as well. In television and in the music industries the acid test is performed on smaller vehicles: a pilot or a single song. Audience focus groups, gigs in small venues, a million cushioned tests to assess if something is going to be a flop or a hit or is worth the money to fund an entire series or an album and world tour. The assets created by startups or the film industry are enormous labours of love that can bring boxoffice results of hundreds of millions or come in below investment and lose money for everybody.
There are not that many women in technology and not that many others directing films because the money people do not trust them and do not buy into their ideas. Funding is still a people’s business of handshakes, lunches, hunches, and connecting with the other person. It is a business of obsessive follow-ups and throwing rejections over one’s shoulder and keeping on going. If this shocks you, please go to the Internet and try to find for me which woman film director has been nominated for an Oscar since the beginning of the awards or who got Best Picture. The answer is two times has the Oscar gone to female nominees in these categories: Best Picture to Jane Campion “The Piano” (1990) and Best Director to Sophia Coppola for “Lost In Translation” (2004). The rest are all men. This is the oddest, most bizarre situation ever to be analysed. Weird as it may be, it is a reality that hits you in the face. This past May, during the Cannes Film Festival, Jane Campion dared to speak openly about what we all keep behind doors: that “the studio system is kind of an old boys’ system and it’s difficult for them to trust women to be capable.” Why is this so?
Taking creative and unproven projects to fruition requires one to be almost “obsessed” with them. It is not about being “driven” but actually being absorbed by it. Genetically, women cannot become absorbed in some self-delusions because we are programmed by our DNA to take care of other people under our care and not be too self-focused. We also take rejections personally. In Campion’s words, “I think women don’t grow up with the harsh world of criticism that men grow up with, we are more sensitively treated, and when you first experience the world of film-making you have to develop a very tough skin.”
If you want investors to trust you, show them that determination, that vision of “get it or bust.” It is okay to be obsessed with achieving success for your project. It is okay to chase people on and on and on until they agree to meet you. I have seen films being funded because of this never-ending chasing. I raised money in the middle of the 2000 dot-bomb after all VCs in Europe rejected us (except for 3i who backed me also in other ventures afterwards) . The Skype founders had almost 50 investor meetings in London and only Index Ventures believed in them and their business. The film “Slumdog Millionaire” almost went straight to video if it weren’t for its producers who fought with tooth and nails to get rid of the original investors (Warner Independent) and found new ones. More female businesses will be backed if the women behind them “go against nature” and take their fund-raising like a crusade.
If you are reading this and wonder how you are going to get these skills and find within yourself this passion and self-belief, join Astia. This is precisely the kind of know-how that we are all here to share with you and instill in your business.
It's another big week here at Astia with our 8th annual Investor Forum this Thursday, January 14th in San Francisco. This exciting event gives 33 life science, clean tech, consumer and enterprise companies from the Astia Doing It Right program the opportunity to present to the investor community. We are proud of this year’s group and know that the investors who will be in attendance are anticipating the event - already three of the companies have secured funding and another three are in due diligence as a results of participating in the Astia program.
In addition to the presentations by our high-growth companies, there will also be a presentation by the Non Profit Global Health Research Foundation which was selected as a pro bono client by the Astia community for its innovative approach to health care in poor countries.
The Investor Forum is scheduled from 12pm-8pm - continuing into the evening to allow for the Angel community to fully engage. Tickets are still available here: http://www.astia.org/content/view/1439/1156/
As always, the Forum will be an exceptional opportunity to network with entrepreneurs, VCs, angel investors, Corporate VCs and senior execs of emerging companies.
Welcome to 2010! We like it better than 2009 already.
Why?
Already this year, three Astia clients secured funding in the last two weeks, two more are in due diligence, we have an Investor Forum on January 14 with over 100 investors confirmed, Moss Adams renewed its sponsorship of Astia for a 4th Year, and the Astia Advisor community continues to deliver on the promise of working with our clients to shortcut their pathways to success (if you are an Astia client, add your comments to this post about your team of Advisors).
And there is more happening inside of Astia...
Astia NYC welcomes four new interns (3 MBAs + 1 Ph.D.) this semester from Columbia and NYU Stern. We look forward to everyone getting to know them throughout the year.
Carolyn Simnett Branco (Columbia Business School ’11): Carolyn joins us for the Spring Semester to focus on Astia’s business development efforts and new client services. Formerly with Google in California and Buenos Aires and UBS Investment Bank, Carolyn brings a passion for entrepreneurship and deep digital media and technology experience.
Eileen Puklin Faucher, PhD: Eileen will serve as our resident Life Sciences expert moving forward our Life Science initiatives on the East Coast. Eileen has worked with Columbia University's Office of Technology Ventures and with Lux Capital Management and has held a variety of scientific research roles, including with the ËTH in Zürich, Switzerland. In addition to her work with Astia, Eileen currently conducts experiments as a postdoctoral research scientist at Columbia.
Avanti Paranjpye (NYU Stern ’11): Avanti is focusing her applied mathematics and publishing background on finance, entrepreneurship and innovation at NYU Stern. She has received several academic and research awards and looks forward to a career in strategic business development upon graduation.
Together, Stephanie and Avanti will be focused on client management. Their work will be to ensure Astia companies derive measurable impact from our community.
We are thrilled to have such talent available to us and delighted to have them on board. Please join us as we welcome them to Astia!
Oh, and do let us know what you got for Christmas and how your 2010 is shaping up.
This past week, New York celebrated the largest entrepreneurship movement throughout the state: New York Entrepreneur Week (NYEW). Within the heart of the Big Apple, hundreds crammed into classrooms at Columbia Business School (and thousands watched live online) to hear from NYC’s leading entrepreneurs, venture capitalists, angel investors, industry leaders, technology press and more.
The lively discussion touched on a variety of topics, including how to restore liquidity to the U.S. markets, prominent sources of funding outside of the traditional venture capital / angel investment /high net worth individuals, and the role of tax credits. Yet some of the more interesting ideas grew from issues the panelists are tackling right now within their businesses. Here are a few highlights.
(1) Unlocking the value of intellectual property can be one the strongest ways to trigger innovation. JiNan Glasgow, founder and CEO of Neopatents, believes that everyone has the power to create – and her work globally has focused on transforming ideas into reality and creating positive impact from them. Creating commercially valuable assets from ideas through intellectual property and entrepreneurial activity is the number one way to impact the economy. Patents and trademarks are the most highly valued intellectual property types, whose value can be leveraged if businesses know how to do it right. Strategic development requires answers, not just data, to inform investment and business decision-making. JiNan works with companies of all sizes – from start-ups to publicly traded companies – to leverage patent information to stimulate and accelerate innovation and to monetize the value of intellectual property to fundraise and grow the enterprise.
JiNan shared that many large public company have dozens of patents “sitting on the shelf” which can be used to test and develop new business lines, especially in an economic downturn when excess resources can be inexpensively deployed in new ways and start-up costs continue to reduce. Companies often find that that strength of such intellectual property secures investment from trusted sources which then enables a new company to grow on its own, often freed from the traditional timeline and pace of the founding company. Such opportunities often create further investment to combine efforts with emerging companies who have additional R&D, which accounts for a variety of early-stage acquisitions.
(2) Innovation will continue to prosper if illiquid markets can be accessed. Adam Oliveri, Managing Director at SecondMarket, shared with the panel the benefits of secondary markets. The steady decline in IPO activity over the last 10 years and the dramatic rise and then sudden fall of M&A activity has left a market void for company exits attractive to investors. Increasing regulatory and administrative burdens also encourage companies to stay private longer, which challenges liquidity outlets. SecondMarket exists to give buyers and sellers a private secure marketplace to effect transactions -- subject to state and federal securities laws -- while providing a robust set of data, analytics and valuation tools instantly accessible online.
(3) What is the most surprising trend affecting cross-border transactions between the United States and Mexico? Luis Antonio Marquez, Director General of the Mexican Private Equity Association, commented that U.S. venture capital firms have been investing south of the border both directly into private equity and venture capital funds and directly within Mexican enterprises. Mexico’s strong innovation and technology programs allow foreign investors to receive last mile grants when partnering with Mexican manufacturers, further stimulating investment. Mexico also encourages commercialization of pre-approved intellectual property – such as patents -- and will use foreign investment, technology and human resources to do so. For aspiring entrepreneurs, some of the strongest innovation can actually be found within the government and its research programs, which allow people to commercialize its pre-approved patents. Last and mostly interestingly, Mr. Marquez reminded us that the U.S. enjoys a Hispanic population of greater than 40 million people which represent the same GDP as Mexico. Savvy states such as Arizona and New Mexico are creating Hispanic Entrepreneurship Programs that provide training, resources, and capital to new businesses within the respective states and across the border leveraging Mexican commercial resources. As the segment of the population continues to grow, we can expect the cross-border development between the U.S. and Mexico to equally prosper.
SV: Marrone Bio has distinguished itself as a company looking to drive innovation in the agricultural market, with a strong technology presence such as an eLearning course on biopesticides. How did Marrone identify the need for a mobile application and what was the development process like?
PM: It is a given that we are innovators in R&D. But our Board, with some IT VCs, thought the sales and marketing side of ag pesticides was not very innovative. They challenged us to be innovative in sales and marketing too! So we developed and launched the first ever online biopesticide course for our customers (pest control advisors) to get 2 credit hours of continuing education units and gain more knowledge and awareness of biopesticides and our products. We have been talking to customers and noticed they are using smart phones more and more. They like the apps on the iphone to use out in the field.
SV: The iPhone application is very exciting and modern, what can we expect to see from Marrone Bio in 2010?
PM: We have more practical ag apps on the drawing board and a second module for our biopesticide university online.
SV: As the CEO and Founder of Marrone Bio, can you give us a background on the company’s origins, what it set out to achieve and how it developed?
PM: I started the company in 2006 to continue what I started at my previous companies - to discover, develop and market effective and environmentally responsible natural products for pest, weed and plant disease management. This time, however, we are putting more products into development in parallel so that we will have a more diverse and larger pipeline to ramp up revenues faster. We now have two products on the market, a product waiting approval at the EPA for controlling invasive zebra and quagga mussels and 4 more in development.
SV: This fall, Marrone Bio was recognized as a New California 100 Innovative Business by Golden Capital Network and Hamilton Lane. What are some of Marrone Bio's best practices for creating a culture of innovation?
PM: We hire people who can think out of the box, ask a lot of questions and know what they don't know because my experience is that innovation is suppressed when scientists are too insecure to admit when they don't know something. Also, it is normal that after a time everyone gets set in their ways so we try to challenge employees to think of different ways to solve problems and overcome obstacles. Mistakes are tolerated if the situation is analyzed, lessons learned and the same mistake is not repeated.
SV: Can you give us an overview on your company’s philosophy and how Marrone Bio is leading the pack on sustainable agriculture?
PM: Global food production with need to double to keep up with increasing population. To do this, food must be produced in the most sustainable manner possible. We think natural pest management products like ours are a major part of the future food system by providing providing better yields and quality while keeping the environment and people safer, reducing pesticide residues, and preventing pests from developing resistance. We have the largest biopesticide pipeline and are the only company discovering extracts of microorganisms and plants that kill insects, weeds, nematodes, and plant diseases. Our focus is on innovation - providing novel, greener solutions to unmet needs.
SV: Having worked with Astia since 2006, and being awarded the Innovator Award for Clean Tech in 2008, what have you found the value of the Astia program and network to be?
PM: Astia helped me hone my pitch to investors, introduced me to a fabulous network of talented women entrepreneurs with the same problems and issues that I have, and provided visibility to a fledging company.
Now the money question: In male-led vs. female-led companies, if we exclude the CEOs in both cases, what percentage of the executive 
If this turns out to be directionally correct, there are a number of repercussions. But in the absence of a more complete data set, I'm reserving judgment for now. If you're interested in helping flesh out the data set, please drop me a line!
