Why Women are Funded Less than Men? This is a talk I gave @Women Startup Labs in the valley which is a summary of a year long project video interviewing vcs, angels & women founders on the shortfall in funding for women.
Video interview with Levo League Founders, Caroline Ghosn & Amanda Pouchot. Levo League is a technology startup dedicated to accelerating career development of young professional women. They have raised $1.25m in their initial round of funding. Founded in 2011 Levo League’s mission is to help young professional women to thrive in the workplace without compromising their identities as women. Caroline Ghosn is Co-Founder and CEO who spent three + years at McKinsey & Company, where she was immersed in projects spanning from Cleantech to philanthropy. Caroline met Levo League Co-Founder Amanda Pouchot on the first day of the job, where the two were the youngest in their respective assignments and frequently the only women. Amanda Pouchot is Co-Founder and CIO of The Levo League, an innovative online community designed to guide Gen Y professional women through modern career challenges and development.
Transcript follows & video below
Its a fabulous startup that you’ve got going! Do you want to tell me a bit about the story behind the startup?
Absolutely, my name is Caroline Ghosn & I’m CoFounder & CEO of the Levo League. We really are creating the generation defining career community for women. That came out of a personal experience, coming into the workforce during the recession. We’re really creating a product that addresses the needs that we had ourselves & that our bar generation has based on the research.Caroline Ghosn
So I led up our investment round & we actually haven’t taken venture funding. We raised an angel round with very carefully chosen investors from the beginning. What really set us apart & worked for us, was being very cognizant of the kinds of thought partners that we wanted to invite to our round. So upfront before it became about a specific person, we sat down & thought to ourselves ok how many investors do we want to be involved? What are the different skill sets & backgrounds of those people? Do we want a media expert? Do we want a women’s community expert? Do we want a technologist? And who are the people that not only have the skill sets but are extremely passionate about the same approach that we have for our own company? And we reached out to those specific people & we shared our motivation with them. And we were very careful to share our end state vision as well as the ways we thought that we were going to go there in a very tactical way. It’s really tough because when you’re starting a company, it’s chicken & egg. You’re not going to know 100% what’s going to happen at the point of your angel rounds. But you have to know enough about what success means for you to be able to get people bought into the journey. So it was a delicate balance of buying people into the broader vision with a tactical way to get there knowing that full disclosure that tactical way is going to shift depending on audience feedback, depending on the circumstances that arise. It was that journey & that dialogue that worked best for us, when we were engaging with individual angel investors.Caroline Ghosn
That sounds very sane & a fabulous strategy. And I think will probably work better for you in the long run as a company. You obviously were leading the investment round, but I was wondering how it was for you Amanda during that process? What part of the startup do you take responsibility for?
Definitely I’m Amanda Pouchot & I’m CoFounder & I oversee our product & content strategy. I’m actually titled Chief Innovation Officer leading innovation. It’s great because one of the really important things about finding a CoFounder is making sure that you have someone who you can trust & a lot of times it’s a blind trust. Because you have to divide & conquer. You can’t both do everything, you have to trust the other person is working just as hard as you. So when looking for a CoFounder it’s really important that you have the same work ethic. That is the most important thing, that you are both putting your heart & soul into this product. You’re going to have disagreements, that’s how the best things happen is when you don’t agree about something. You come together & you find the best solution. My role is really about making sure we have the best solution to the problems we’re trying to attack. One of the strengths for both of us is that tackle problems in different ways but we’re very able to work together & come together & create the best possible solution.Amanda Pouchot
I’m wondering too if not the most important thing is that you would share the same values, even more than the work ethic? Obviously you are both on the same page & you’ve brought your individual talents together & that’s awesome because it’s much more powerful than one person can accomplish. But I think that above the work ethic? Would you agree with that?
Absolutely, I think that to really function as a team where the whole is greater than the sum of it’s parts, you have to have that blind trust as Amanda was saying. I really believe that’s where work value is & we view work ethic as one of the main components of those values. But there are obviously interpersonal values, there are obviously professional values & all those things together, I think once you match those. I really believe that if you have the will to learn something, you’re going to learn it. So a more successful relationship long term is not necessarily a relationship where everybody’s skills are diametrically opposed in the most complementary way possible & everything’s hunky dory. It’s about the mindset because the evolution of that relationship is going to be dependent on the values of those two people over time.Caroline Ghosn
You’ve obviously thought about this quite a bit. It’s fabulous, it’s really great information to share with other women & female entrepreneurs! I did hear that you have some fabulous women behind you in your investment rounds. Do you want to briefly share who they are? And how that was meeting those mentors?
Sure, absolutely. We’re very fortunate that we found real sponsors throughout our angel round. I think that was the biggest surprise for us. You don’t really come into a round especially as a first time entrepreneur & expect that you’re going to find those people you could actually call your mentors that you can text message with questions, who will video chat you if they’re across the world & you need help. We’re very fortunate that we had women like Gina Bianchini . We have someone like Sheryl Sandberg basically sponsor us & be behind us. Or someone like Susan Lyne on the East Coast or someone like Fran Hauser. Yesterday we were on a panel @facebook & Clara Shih, Hearsay Social is an incredible example said ‘You need to take time to take a step back when you’re starting a company & celebrate what you’ve accomplished. Because it’s a series of sprints that look like a marathon from the outside & sometimes you lose sight of what’s happening when you’re in it.’ And I really, really feel that way about these incredible people. I think back to 6 months ago, when I didn’t know any of these people & how much of an influence they are in my life today & it’s incredible. I really believe in cultivating those relationships & it goes back to the idea of thought partnership. Engaging as thought partners is the best thing that we can do.Carolyn Ghosn
Would you have any advice for women that might be in the same place you were 6 months ago looking to find that financing & the right thought mentors to work with?
Yes lots & lots of advice. I think the most important thing is to really think through your business broadly & to dream big enough. That’s what we’ve found is that you’re really only constrained by how big you can dream. Really understand, yes my dreams are this big but then I applied steps on how to get there & goals & break it down into phases. Or break it down into OK we’ve gotta get this first & then we can go there. Also test: testing, testing, testing: that’s been one of our strongest things that we’ve been told to do is take what we’ve learnt from our users, from our community & really discover what others want. Then be able to take that information back & say ok we know this will work because we’ve tested it. I think this gives us a lot of credibility when we speak with investors, advisors & mentors who want to get involved.Amanda Pouchot
Caroline do you have any advice?
Absolutely I think that the fact that we’re able to relate to each other so well (which I see women do so often in personal settings) is a big, big strength when it comes to involving investors. At the end of the day investors are people who are taking a risk to stand alongside you. Approaching them with humility & always keeping them in the loop & having them feel part of a team, I think is something that needs to be done from the beginning. You set a tone at the beginning of the company that sets a standard for that culture for the investors. One of my mentors actually told me at the beginning of the round when I was a little nervous about speaking to some of these people: “Everybody is a person. The person you’re facing is a person too. Try to think about what is it about what you’re doing that resonates with their lives? What is it about your business that you think is going to inspire them? Because it’s different for each person. Figure out what that is & really talk about that. In the process of doing that you need to understand, the person across the table from you. You need to be really empathetic to them. In order to do that you’ve got to be humble because if you’re filling up the room, there’s no space for them.Carolyn Ghosn
So one of the things that I learnt from video interviewing vcs, angels & women founders was that a lot of vcs said that a lot of men actually don’t use that technique. They act like superstars & over extend themselves & talk so big that probably a lot of it is puffed up & is not actually substantial. So this is a really different technique but then I can see that you girls are really starting to explore, being pioneers, along with a lot of other female entrepreneurs pioneering new ways of going about this rather than recreating the old ways that men traditionally have led the storm. So congratulations to both of you & you are both so inspiring so I’m sure that your platform will inspire many people to come.
Thank you so muchCarolyn Ghosn
This interview was reposted on Women2.0 & TheNextWomen
Guest post by Mary Hodder, napsterization on the lack of women entrepreneurs & possible solutions. Mary Hodder is a veteran Silicon Valley technologist, most recently founding Wellness Mobile, and prior to that as VP Products at Apisiphere, a geolocation mobile company building an enterprise platform for mobile developers. While at Apisphere, she oversaw development of 12 mobile location products and the platform. Prior to that, she founded Dabble.com, a social search site for web video. Mary has worked with large and small organizations as Product Developer / information architect / interaction designer on search, web, gaming, open source software, photo sharing, blog aggregation, media distribution products. Her research includes creating a 100p survey of current new media research and development for New Media for the American Press Inst. She has been on the board of several mission-related organizations including Attention Trust and One Web Day. She blogs at Napsterization and was an original author at bIPlog (the first UC Berkeley Graduate School of Journalism blog, on intellectual property, security and privacy), has a Masters from School of Information at UCB, 2004 and a BA from Sarah Lawrence College. Prior to her masters, she was at Adobe Systems for 5 years.
Video interview with Margit Wennmachers, Partner Andreessen Horowitz. She has over 20 years of marketing technology experience, and co-founded and ran The OutCast Agency, an award-winning communications firm with offices in New York City and San Francisco. Under her leadership, the firm grew from two employees to a multi-million dollar business. At OutCast, Margit oversaw client work as well as the firms business operations. OutCast’s most notable clients including Amazon, Bloom Energy, EMC, Facebook, Netflix, Nike, Salesforce.com, Yahoo!, and a host of venture-backed start-ups and venture capital firms. She entered technology marketing over twenty years ago when she joined the European office of a Silicon-Valley based start-up. In 1991, Margit relocated to San Francisco. Before founding OutCast Communications she spent 4 years with Hill & Knowlton/WPP owned Blanc & Otus, at the time one of Silicon Valley’s most successful and prestigious high-tech communications firms whose clients included the IBM Olympics, Sybase, and VeriSign. She was a member of the executive management team there. Margit was born and raised in Germany. She has lived and worked in Germany, Spain and the U.S. She is fluent in English, German, Spanish, and French. Margit is on the board of the World Affairs Council. You can find Margit on Twitter @wennmachers
Transcript follows & video below
Which themes do you like to invest, what is your sweet spot?
Well the firm likes to make big bets. We’re looking for an entrepreneur that has a somewhat radical idea & who goes after a big market. Within that we are what’s called stage agnostic, so we will write a check for as little as $10,000 all the way up to $100m. We invest at all stages. In some cases it is a young entrepreneur who is out of school or not even out of school who has a big idea. And we feel that he or she has the guts to pull it off & it’s a big market & we’ll put some money in. At the venture stage we will make $3m to $12m investment & someone will go on the board. Then we do a lot of growth stage investments. I’ll give you an example Groupon, Skype, Zynga, facebook, Twitter are all growth stage investments that we’ve done. We like everything that’s related to computer science so where intellectual computer IP is core to the business. Within that it is consumer tech like a Zynga games company but it’s also deep enterprise like some of our stealth investments that do networking or storage or cloud services. So it runs the gamut. What we don’t do is clean tech or transportation or space elevators or algae.Margit Wennmachers
Best to stick with what you know really, isn’t it? Then you have success. What do you look for in women entrepreneurs & startups that indicate interest to you in investing in their businesses?
I think it’s basically the same thing. It’s absolutely the same thing. We don’t make a difference. In some cases women have more of a knack for design & that kind of sensibility. So that often comes out which is nice to see.Margit Wennmachers
I heard someone say that if a woman had designed facebook it would have been much prettier.
It might not have been IBMish blue.Margit Wennmachers
I’m joking. I think it was a joke that made the rounds.
Yes I think the women entrepreneurs that we would look for fit the exact same mold as the men.Margit Wennmachers
So no bias there, fantastic.
Advice for pitching for venture is often correlated with dating. What sort of chemistry makes for a good match & is a success for both entrepreneur & venture capitalist?
I’m not sure it is like dating & if it were like dating I might not be able to kiss & tell. There is something to be said about the chemistry. The first thing we look for is success factors. Is that entrepreneur, does she have a strong vision & a real backbone to go after a big idea? I think the things we get most disappointed about is when we think the entrepreneur doesn’t have an idea that’s big enough. Sometimes you optimize for ‘Oh I could sell this to Google, Yahoo or whatever’ & those are not the kind of things we like to invest in. We like to invest in men & women who have a big idea & want to go after it. Then chemistry, we have a point of view that a good entrepreneur will know what she wants to do & what she wants to accomplish with the business. She will build the product & the competitive set much better than we do. So we try to be super respectful of the entrepreneur & get involved when they want us to. Be super, super helfpful oftentimes at the tactical level. But really respect the entrepreneur’s vision. I think that ends up creating a good chemistry. Entrepreneurs have a lot of pressure on them already. They have big things to accomplish. You don’t want a venture capitalist who’s up in your shorts all day long telling you what to do & over coaching you.Margit Wennmachers
In your experience are there many women entrepreneurs that are unsuccessful in sourcing venture? We already know that the percentages of women who are successful are very low.
Yeah I can’t speak for other businesses but when it comes to tech there is a uniqueness when it comes to the technology business. That is that the company & the product end up being very, very closely related. If you look at Apple or all the big companies, the product & the company are almost one. Now what that says often times the technical entrepreneur ends up being the most successful entrepreneur because it is so much about the product. And I think that’s where we run into trouble when it comes to men & women. If you look at the engineering degrees, at least in the United States, the number of female engineers that have graduated has been small & is actually going down which is huge disappointment.Margit Wennmachers
Yes that’s what’s concerning.
I think that’s why in the tech business you have so few female entrepreneurs. The most successful companies are run by the technical founder. Think about Bill Gates in Microsoft’s heyday, Steve Jobs, Larry Ellison, Mark Zuckerburg. You can go on down the list. There are very few women who fit that mold. I think as a result we see fewer women who get funding. There’s some great exceptions to that. Dianne Greene started VMWare which is one of the really big software franchises. She created a whole new layer in the stack which is admirable. She was & is a great engineer & broke that mold or stereotype. And I think the other thing to consider is that there are more women who are successful in the business. When it comes to that technical founding spot, we see fewer women than we want.Margit Wennmachers
What can women entrepreneurs/startups do to increase their chances in sourcing venture?
I think that the engineering degree would help. And if you don’t have the engineering degree, be a great product picker. The ability to understand a product & how a product can fit into the market, particularly the enterprise place. Can you extract a purchase order or PO from a big company with this particular product? What does it have to integrate with? How does it have to work to really get that done? I think that there are exceptions where you might not have the technical degree but you’re exceptional at product picking & you’re also exceptional at nurturing engineers because that is just crucial to the process. And there are very successful women who are super, super high up & run technology companies like Sheryl Sandberg who does not have a technical degree but is exceptional. I think the product picking & the nurturing of engineers end up being two important components.Margit Wennmachers
So there would have to be some sort of visionary element of the product picking wouldn’t there? It would be women who could actually see the disruptive potential of a product or service?
Yes so in the absence of having the technical degree, you can still know a lot about what enterprises are buying or what consumer behavior looks like. How do you make a product not just a product but fit into an overall solution with services & integration points to other products & all those kinds of things. Those are fundamental things to understand & to excel at that may not require a technical degree.Margit Wennmachers
What sort of challenges do women face if they become a venture capitalist from your experience, although you’ve got a great firm here?
I’ve nothing to complain about, I have to say.Margit Wennmachers
You’re having fun!
I’m having a great time. It is a really good firm. We have 3 partners here. We have Shannon who runs the Talent Agency. She has a whole bunch of people working for her. She is super, super successful. I think again where a potential issue might arise is if you’re dealing with a technical founder, you’ve got to be able to talk to & relate to a technical founder that makes them respect what else you bring to the table if it’s not being able to talk code one on one.Margit Wennmachers
Yes, yes that’s a bit of a challenge definitely. Thank you. What needs to happen for venture companies to employ more women venture capitalists? (obviously you guys are ahead of the pack)
We are although, at Kleiner Perkins there are a number. There’s Trae, there’s Aileen.Margit Wennmachers
Juliette and Beth. There are a number of partners who are brilliant women & are very successful in their own right. I think the thing that we look for for our general partners & also our other partners is having operating experience. Because sometimes when you’re talking to an entrepreneur & helping an entrepreneur make the company more valuable & build the business, just having been in the shoes & having the pressure & the reward & the understanding what it takes to build a business. I think that’s really, really hard to fake. If you have a purely financial background, you might be great at spreadsheets & great at the modelling. But that’s not how an entrepreneur lives their day to day lives. So having empathy & understanding for how it works & all the sausage making that’s involved is super, super important. I know that that’s something that we look for with all of our partners whether GP or others. Having not watched the movie, but have really built something!Margit Wennmachers
That’s a really good image. I’ve been doing a series of interviews with European vcs & European founders & it appears that a lot of European vcs come from financial backgrounds. That appears to be the missing link or the missing piece for women founders in Europe. There are new firms now that are popping up which are similar to what you’re talking about. It’s obviously a crucial piece really.
I think it’s a super crucial piece. Because what happens when you don’t have the experience of having built something you tend to get a lot more nervous when you see the problems. Every startup, every growth company, every single… there’s a lot of hair on all of these situations. So you can either get way more nervous or extremely opinionated & strong advice that might be off just because you’ve never actually done it. So that is something, if you’re a woman entrepreneur here & with the other entrepreneurs in the valley I think you would have a much better chance than if you have a purely financial background.Margit Wennmachers
What is the key, from your experience, to bridge the gender gap with male venture capitalists, both for women venture capitalists & women entrepreneurs?
Well, the gender gap…I think if women are given a shot, they tend to work hard. They tend to be very team focused. They tend to be pretty good communicators. They tend to be very team oriented. They tend to have a lot of collective female burden on their shoulders. So I think once they’re given a shot, they tend to do really, really well. I think as a group, we do really well & then we support each other. We’re going to make within a generation or 2 generations we’re probably going to make a lot of changes.Margit Wennmachers
So in other words we are already building that bridge, you think?
I think we’re building the bridge. I think there’s a huge way to go & there’s a glass ceiling. And I think sometimes women can be their own worst enemy. There’s the whole biological clock. Sometimes women put their career on slow burn in anticipation of having to juggle it all & those kinds of things. I would say if you’re a woman, you’re smart, you’re ambitious, go, go for it & don’t stop. Because once you have children or the husband or both you will figure it out!Margit Wennmachers
Thank you, that’s great encouragement. In the dance with an entrepreneur both in the decision making process of funding a startup & then in working with those startups what are the necessary qualities that make a good venture capitalist. Some of the talents mentioned: Would you trust your gut instincts & feelings that happen within the relationship with the entrepreneur as signs about what’s happening in the business, in the startup? Or would you ‘manage by influence or persuasion’?
Yeah in the decision making process it really depends on what stage you’re looking at. When we’re acting as angel investors, it’s a pretty quick decision & it has a lot to do with gut. Because you really have is an entrepreneur & an idea that is hopefully connected to a big market. But you don’t have any traction & there are no numbers to look at. So it’s very much a gut driven decision. When you’re doing a growth stage investment, there’s a lot of data. There’s a lot of revenue, there’s a lot of how many countries? there’s a lot of what does your team look like? There’s a lot to look at & a lot to analyze so it becomes a much more cerebral exercise. Now let’s just assume your decision has been made. After that once a decision has been made, you’re backing an entrepreneur. That’s it! So you work with the entrepreneur, you find out what she wants to do, what are the challenges, what are the obstacles? You try to help that entrepreneur remove as many of the obstacles as you might find. I think it always needs to come from the point of view of respect & we’re in the same boat. Maybe it’s because of my service business, I ran an agency for a long time but you know I feel like the doctrinal ‘you shall’ tends not to work as well as ‘here are 3 options, here’s how the movie could play out if we do this versus that versus the other. And it ends up being the entrepreneur’s call. An entrepreneur will have a much better time deciding & living with the decision if she gets to make it!Margit Wennmachers
Thanks so much & thanks again for your time. I’m sure that any entrepreneur that manages to find their way into Andreesen & Horowitz is going to have a fantastic ride!
Send them my way! Thank youMargit Wennmachers