Natalie Wood, ThoughtNet: Lessons for Women Sourcing Venture Part II

Video interview with Natalie Wood, TheThought Net , which is a Thought Leadership Consulting Firm located in San Francisco, CA. They help companies build their brand to become effective market leaders and corporate social citizens via thought leadership programs that leverage new trends. She founded and built, Inc. 1998 – 2001 an online business and financial services portal for women-owned businesses that served the small business market. She was also Business Director, Technology West Coast at The Economist Intelligence Unit from 2008 to 2010. Natalie can be found at TheThoughtNet & Twitter @thoughtnetinfo

Transcript follows & video below. This is Part II of the interview.  You can view Part I here.

What qualities do you think women entrepreneurs need specifically for sourcing venture?

Qualities are that they need to have an understanding of what type of funding that they need to get from a venture & they also have to understand what they have to give up. Because anyone that gets venture knows: there is an old saying ‘You can either have a small piece of a big pie’ (which is what a vc is all about) or ‘You can have a big piece of a small pie'(which is more about getting angel funding & doing your own thing) but you’re not going to have that big of a pie!

Natalie Wood

That would be the most critical point there?

And you have to let go because a lot of vcs after a year or two, if you don’t have the experience to run a large corporation they will shift you. You have to realize that that is part of what you are getting into.

Natalie Wood

As you know my background is in the online dating industry and I am very interested in the chemistry between entrepreneurs & venture capitalists. There may possibly be an opportunity there through further investigation, to help women to access venture more easily? What have you observed or do you sense is the best chemistry for a woman entrepreneur to match with a VC?

Just like dating, women really need to know, just like a man, what a venture capitalist, wants, what are they looking for?   Which is different for each venture capital company, they have a profile. Just like men, we have our facebook profiles , each vc has their own profile, like a dating profile. Because you can say ‘I’m only into playing tennis & I like hiking’. Well vcs say ‘We’re only into the telecom business & we only like companies who can go up to $50Billion or $8Billion or whatever the number is. So you really need to understand the dating profile of the VC & get involved with them based on are they a match for your profile? Instead of just throwing it out to the wind.

Natalie Wood

So it has to be an authentic match is what you are saying & you have to try & research that beforehand?

Oh my gosh, you’re kinda dumb if you don’t. If you want to go out on a date with somebody, or get married to someone or have a relationship, you’ve got to go out on dates & you need to do your research. Are they a fit? Check, check, check. Does it fit with what I’m looking for?

Natalie Wood

And obviously you have only been on one side of the table as an entrepreneur, like myself. What do you think the vcs want in the chemistry they want?

Well they usually have a chemistry of the type of person that they want to see & usually that has to do with somebody if its a person that’s starting a company theres a different chemistry than with somebody who is running a large corporation. And so somebody who is the entrepreneur, they want them to be a person who is creative & understands that market & where it’s going & is a part of that creative process.

It is said that women entrepreneurs need to take more risks & be more bold in pitching their startups. Do you think this is the major issue holding women back from sourcing venture?

Well sure just like anything, if you want to take it back to your dating metaphor again, it can be scarey especially like me when I got started, you don’t know what you don’t know. And so how can you go out & try to get involved with vcs when you’re saying ‘Hi I’ve got this idea’ & they’re saying ‘Ok send us your business plan & if we like the business plan then maybe we’ll talk to you?’ Oh my gosh I must have rewritten my business plan about 50 times at least. So getting that relationship, you really need to understand the key things that you need to engage a vc. So you’re selling yourself, your team, your idea & you’re also selling your target market that you’re going after & if there is a match on that, they like your target market then you have a shot at getting in with an idea. But it needs to be something that they see as sustainable.

It depends on the woman & there are certain women who are not big risk takers. There are women who are younger than I am & they’ve come up in a different paradigm than I have. For them taking that risk if they’re in their 20’s is not as frightening because they haven’t had any failures to speak of. And they also may not have as much invested, maybe they’re not married, they don’t have children, they don’t have a mortgage payment? So when you start adding years & other effects, its not only yourself, that you have other people who will suffer if the risk doesn’t turn out, it makes you think! And that goes for men & women.

Natalie Wood

And also obviously I’m unusual, because most women would want to feel secure rather than take more risks than when they were young? So that makes sense.

It does make sense. But there’s one caveat to that & that is that true entrepreneurial spirit is always coming up with new ideas. So there are people that are just true entrepreneurs & can’t not not do it, double negative. You can’t not do it, in your spirit you have this idea & you have to do it.

Natalie Wood

So what you’re saying is some of us are driven that way?

Some of us are driven and you have to temper it with you have a husband, you have children, you have a mortgage, you have things. However there are great supportive husbands who say ‘I believe in you let’s take the chance!’ and you need to do your homework.

Natalie Wood

How could women leverage their already innate strengths to be more accepted & successful in the venture capital game? Because many people say because of women’s natural predisposition that often eliminates them. But I’m thinking that that looks at the problems rather than our strengths & so I wondered if you’ve got any ideas about how women can leverage those strengths?

Women are good at researching & so I think they can usually can come up with & understand who might be a good match for them. Also women are great consensus takers & so if we can go out & tap into other women who have made it, we can alleviate some of the issues & problems that we’re going to have to face trying to do it all on our own. And there are different women’s organizations like FWE Forum for Women Entrepreneurs & Executives & Bay Area women’s business groups & National women’s business groups. It’s important to get involved locally with women, you could even start your own group. Recently I’ve been part of starting a new group called WeCEO’s, Women CEOs & its just a very small group of us women who have all started our own businesses, all of us this is our 3rd business. Some of them are doing different things, obviously people are different, we have different backgrounds. So what we do is get together & talk & share information relating to asking questions & helping each other to get ideas on how to solve problems or get ideas on things we can do. It’s hard to do something in a vacuum by yourself & I would say that any CEO or entrepreneur who’s starting a business, there is a bit of a lonely feeling in that you are on your own. And you have to come up with & be a creator because entrepreneurs are really creators. You have to create the team, you have to enrol people to understand the idea, you have to get whatever software or programming done & you need to create the sales & marketing. And so in order to be able to put all of that cohesively together you need a touchstone, you need someone outside of yourself that’s done this before. Connecting with other women entrepreneurs & other men entrepreneurs, not just women, creating a way for you to have mentors for yourself & to network with other people who’ve been through this process is extremely important. You’re still going to go through mistakes because you learn more by making mistakes than you do by having success.

Natalie Wood

Thank you so much, I so appreciate your wealth of experience & background that you’ve brought to share with us today.

Natalie Wood, ThoughtNet: Lessons for Women Sourcing Venture

Natalie Wood is CEO of The Thought Net which is a Thought Leadership Consulting Firm located in San Francisco, CA.  They help companies build their brand to become effective market leaders and corporate social citizens via thought leadership programs that leverage new trends.  She founded and built, Inc. 1998 – 2001 an online business and financial services portal for women-owned businesses that served the small business market.  She was also Business Director, Technology West Coast at The Economist Intelligence Unit from 2008 to 2010. Natalie can be found at TheThoughtNet & Twitter @thoughtnetinfo.

Transcript follows & video below. This is Part I of the interview. You can view Part II here.

You have already contributed greatly & broken the ground for women startups with your past startup Could you briefly tell me about your vision for that company and the services that you were offering women entrepreneurs & startups?

Sure I got the idea for back in 1995 & it took me a good 4 years to get the company funded, both private angel investors & venture funding. Through that experience I really realized & learned about what it takes to get venture funding. Also how hard it is when you have a new idea around new technology & you’re approaching a new market. I was going after women business owners who were starting or wanting to grow their businesses. At that time on the internet there really weren’t that many women online and so I was trying to show a growth pattern of women actually coming online & using the internet to buy products, to do business & came up with this idea around MizBiz which was a community site that helped women get information – we had an online advisor group. We had business products, web hosting & we were starting community events & classes.

Natalie Wood

You were so ahead of your time, remarkable.

Oh my goodness, it was a lot of work! I went through 3 different development teams. I got angel investing along the way. I put all of my money & time into it & finally around 1998-1999 I got my financial guru who came from one of the top 8 large financial companies who said ‘You’ve done a great job here, you just haven’t really got heard!’ And so he helped me going out with the rest of my team, engineers & marketing people, to go out & get venture funding. I would say that part of the process of getting venture funded is that you really have to understand & learn a new language. Because you have to go out & present financials & an idea & with most venture companies they call it the ‘aspirin syndrome’ they want you to provide an aspirin to a pain point. And if there isn’t a market that already exists (its good to have competition) you have to show what’s happening how is that market going to accept your solution & how are you going to grow that over time? The biggest thing is that you can’t be defensive or you can’t just shut down. I got the opportunity over a period of time to do terrible presentations to VCs & get totally rejected & then you pick yourself up by the bootstraps & say ‘Ok let’s give it another try.

Natalie Wood

You learn from every attempt I imagine?

Oh totally & finally you get to this place where you get a thick skin & people will come at you with very difficult questions ‘Why do you think that this is even gonna make it?? This idea doesn’t seem like it has any merit to me, blah, blah, blah. And here you are this is your baby whether you’re a man or woman. This is your idea, your baby, you’ve nurtured it and its like removing yourself in a way to say ‘Well here’s why & here’s the financials and here’s the reasoning & just remain kind of in a zen-like state. That’s important because anyone who’s going to invest in you, they want to see that you can comport yourself in a manner that’s going to be calm & rational. And they don’t want people who are going to be extremely emotional. What I’ve also learned is that there are businesses that you may not want to get venture funded.

Natalie Wood

I understand that you are now running a new startup The Thought Bank. Could you briefly tell me what you’re doing there?

Yes, well I’m pretty excited about this, it is my third business & its a Thought Leadership Consulting company. After MizBiz business I went back into the corporate world & worked at different jobs and one of my last jobs was at The Economist Intelligence Unit doing Thought Leadership Consulting. So we did a lot of research mostly for larger companies around ideas that help the market & help business people, more of a business to business environment. I’m now doing that on my own & I’ve got a team that I’ve pulled together & we’re doing Thought Leadership Consulting. I’m really trying to create Thought Leadership Initiatives to help companies take a look at how they can help their market & their customers & creating content around that & using social media to create a distribution channel in some new media fashions. So it’s pretty exciting because it actually ties back into lead generation.

Natalie Wood

And again you’re a bit way ahead of the rest of the pack too? But hopefully this time you won’t have to be a sacrifice to that.

Yeah right I don‘t want to be a sacrificial lamb.  And I’m not going after VC funding.

Natalie Wood

What personal lessons being a woman entrepreneur have you taken out of your successes &/or failures as a result of your experience?

I would say that one of the biggest ones is that you need to learn about what paradigms you live in. When I say that I mean that we all live and think in paradigms, it’s the kind of structure about how you operate in the world. One of the paradigms that I used to live in is that I thought that doctor equaled man. And whether or not you know it, you can say gosh I’ve got a lot of doctors that are women & yet I still thought doctor equaled man. How I relate this idea is that in my decision making process I would always want to do some sort of consensus taking, and get a second opinion. Yet even if I really felt strongly about something, I would defer to somebody who I thought knew more than I did & would take their opinion & let go of what I thought was the right thing to do. My paradigm was thinking that was the only way to manage the decision making process. As you go through building your business one of the most important things you have to realize is that you need to trust your own experience & your own gut. Having been through this, I now think and operate differently.  I collect feedback, kind of like how Obama manages his administration, trust in my knowledge and then make my decision. But what I’m going to do is make the decision based on my own experience! And it’s important to say to yourself, OK go ahead & do it!  So doctor can equal woman. You can rely upon yourself & say yes and believe that well I might just have the best opinion here! It’s not always easy & you don’t always see it because being in a paradigm, until you get out of that paradigm you don’t even know you are in it!

Natalie Wood

Thankyou, Great wisdom. Now what do you think are the possibilities for women sourcing venture because obviously there have been some changes since MizBiz days? You may have been ahead of your time? Although women startups still only account for about 8 to 10% of startups that successfully source venture there has been a lot of press & organizations helping to change the general awareness about women entrepreneurs particularly in the last year. So what do you think the opportunities are now?

Well I think there are more & more opportunities for women to source venture capital. And I think that women have to understand what that means to their business. I have been going to lots of different events that have been hosted by law firms that are looking to get more women as clients who are starting new businesses. That’s exciting! Part of that get out & get funding, women need to realize whether they are they a match for venture funding? Is your company a match?

They want businesses to grow exponentially & to have this huge target. So you really have to understand if you are a woman going out for venture funding, do you fit into what a venture capitalist is looking for? And there are different options You can go for traditional vc funding if you can fit your business model into what they’re looking for. Another is that you can take a look at alternative types of funding. There are funds who will fund you for the business but not expect to get a huge return. So you can have a business that grows at a healthy rate and maybe all you need is initial angel funding or you might want to try some of the new funds that are out there.

Natalie Wood

And also you’ve got the debt based model?

Yes you’ve got the debt based funding & in this climate right now you’re going to have to put up a house for collateral or something because you’re going to have to have money to get money. Bottom line is that there was an article a couple of months ago in The Atlantic monthly ‘The End of Men’ about women are starting businesses more & more & there are going to be a lot more women rising in the ranks of business but also starting their own businesses. So it is happening, it is coming, there is a shift & a transition that is taking place. And I think women are now over 50% of the graduating classes from law school & as women start entering more & more into these different areas they’re going to start getting more venture funding.

Natalie Wood

So what you’re saying is that its definitely different than your MizBiz days?

Oh my gosh yes. It was rare when women got funded and you really had to have a company that had a buying customer audience that could go into the Billions.

Natalie Wood