Jeff Bussgang, Flybridge Capital Partners: Can Women Master the VC Game?

Transcript follows & video below.

What is your sweet spot, in what kinds of businesses do you like to invest?

Sure so, Flybridge Capital is an early stage investor. We invest in seed & series A companies typically pre-revenue, often University spin outs or companies that have a prototype or even just a good idea & ten fabulous powerpoint slides. Our typical check size is as low as $250k & as high as $6m to $7m.

Jeff Bussgang

What percentage of women startups do you get pitches for? And what percentage have you funded?

I don’t know if I can say precisely but it’s not enough (on both dimensions)! I would say probably 5 to 10% & we’ve probably funded 10%. We’ve probably funded 4 or 5 women entrepreneurs out of our roughly 50 portfolio companies. I can give you a few examples if you’d like. I highlight one of them in my book, Marsha Moses who is a professor at Massachusetts Children’s Hospital & a cancer researcher who developed an incredible diagnostic capability to do cancer biomarkers through urine samples. So if you pee in a cup, she will tell you what kind of cancer you have, if you have cancer. This is an extraordinary preventative & low cost diagnostic method for cancer detection.

Jeff Bussgang

Really making a difference heh?

A real breakthrough! Marsha had been working on this for 20 years & we spun the technology out of Children’s Hospital & with her leadership built a company called Predictive Biosciences that’s in the market today with the product.

Jeff Bussgang

Have you noted differences with women entrepreneurs in how they pitch & build businesses?

I would say that in general women entrepreneurs tend to be more team oriented, less egotistical. I would say that they have low ego & therefore open to bringing in new leadership at the right time.

Jeff Bussgang

Great positive qualities. I have read your blog for a few years & appreciated your article The VC Gender Gap – Are VCs Sexist? I quote you ”As the father of a capable, ambitious daughter, perhaps I’m over-sensitive to the issue, but since becoming a VC seven years ago, I find it amazing that only 5-10% of the VC industry is made up of women. Only 25% of all VC partnerships have a single women partner and only 7-8% have more than one women partner. Anecdotally, even fewer women are “management company GPs” as opposed to “employee GPs” – in other words, true owners of VC funds as opposed to deal partners. What other major industry remains 90-95% male-dominated? What’s the deal?” Some good stats and I quote you again “I guess when you have a clubby, tightly-woven, self-perpetuating network, it’s hard for women to break in. It’s a stubborn phenomenon, but I hope we can figure out how to correct it. Otherwise, our industry is tragically losing out on 50% of the world’s best talent!” This was a big conversation in 2010 & obviously you were ahead of the game as this was posted in October 2009. In 2011 do you have any ideas or perceptions about how we can change the ratio?

Well it’s a really thorny problem & its one that I would say unfortunately say I don’t see a huge pipeline of young associates & principals coming through that suggests we’re going to radically change this phenomenon. That’s really what you need! You need more MBA & entrepreneur & scientific executives who are women because those are the feeders for venture capital. Then you need more women associates & principals. Then you need more partners and then more management partners. I wish we could say we are a model here. Unfortunately we’re not. I will confess to you that my partnership & we have 5 partners & all 5 of us are men. We have hired in our history, I think 6 non-partner investment professionals & 4 out of 6 have been women. So I think we’re doing a good job with the next generation. But it’s tricky, its very tricky!

Jeff Bussgang

Cindy Gallop, Founder of IfWeRanTheWorld, said in a recent interview: ‘VCs fund in their own image: white, male. The cycle is self-perpetuating, so (predominantly male) VCs have a preconceived notion in their heads of what they think constitutes the kind of entrepreneur to back. John Doerr apparently said, ‘If you’re a white, under30, tech geek with no social life and a Harvard/Stanford dropout, line up for VC money.’ He didn’t say ‘male,’ but he might as well have. If it had been a 17-year-old Russian girl who came up with ChatRoulette would there have been as much interest in funding whatever she might do next?’  What is your take on this Jeff, & if this is happening how can women startups find an opening in this culture?

I’m not sure that today women startups aren’t actually advantaged frankly. Because I think they stand out & I think there’s a lean forward on the part of many vcs to effect change, to be more helpful, to give on the margin more time to women entrepreneurs. I think that a small proportion of vcs that are women are leaning forward trying to be more helpful to women entrepreneurs. So I think in many ways there are opportunities for more women entrepreneurs that may not have been available 10 or 20 years ago where they can find champions more readily.

Jeff Bussgang

So that’s a really positive thing then, there are opportunities there for women who are going to take that risk.

I’ll give you an example. I have a woman entrepreneur in my portfolio who is able to garner mentors & advisors & attract people to help her in a way that I’ve never seen anyone else achieve. I think one of her assets is that she is a compelling person, a compelling visionary entrepreneur but she’s also very likeable & people want her to succeed because they want a woman entrepreneur to succeed.

Jeff Bussgang

Wow I got shivers, that’s so great and that’s really positive feedback. Thank you. Cindy also says: ‘I think not as many women as men actively seek VC money because they’re not as tapped into the boy’s network as male entrepreneurs are. Young male entrepreneurs can very easily become the flavor of the month and get introduced around from one VC to another — get the perception going that they’re ‘hot’ and get their funding. It doesn’t happen for women that way.’ Do you think that networking with Venture Capitalists is harder for women entrepreneurs?

I’m not sure I subscribe to that belief either. What I’ve seen in my work as a venture capitalist here on the east coast in Boston & New York City & I teach part time at Harvard Business School. I have observed again that because they are in the minority, women can be many times more effective at networking. But it takes a certain personality. You have to be aggressive. There are attributes that cut across genders. Aggressive, compelling, credible, knowledgeable, authoritative, passionate. And if you have those qualities as a woman entrepreneur I think you can do a terrific job. And look we have seen a lot of wonderfully successful women entrepreneurs lately. Whether it’s Gail Goodman, CEO Constant Contact  which was a very successful 2007 IPO & now a leader in the email marketing market. Whether it was Alexis Maybank who was a young Harvard Business School graduate who was the cofounder with her partner Alexandra of Gilte Group. No you’re seeing a lot of really talented women entrepreneurs stand out, but they have to have those attributes.

Jeff Bussgang

Thanks for that & we need to build those attributes up.

Yes and more role models. They need more female role models.

Jeff Bussgang

Please excuse the sound, skype was playing up…

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