When you invest in women, you're in good company™

24Jun
Blog

When you invest in women, you're in good company™

shelly_porges1_800x547.jpg

By Shelly Porges, Co-founder and Managing partner of The Billion Dollar Fund for Women

Only 2.2% of venture funding goes to companies founded by women. How can this critical funding gap be addressed from the perspective of investors and women entrepreneurs?

In this blog post, we talk to Shelly Porges, Co-founder and Managing partner of The Billion Dollar Fund for Women, about how the global funding paradigm might be changed to give women innovators a greater share of the pie.

 

1.  What are the key strategies woman entrepreneurs should apply to seek funding?

Think BIG!

The biggest obstacle we face as women seeking support (aside from the fact that we often don't) is that when we do, we aim too low.  Investors want to know that their time and resources are going to be invested in an innovator who is solving a big problem with potentially big results.  Even as you develop whatever your version of an "MVP" (minimum viable product cf. "Lean Startup" by Eric Reiss), your ultimate goal must be to solve a big problem, think Google, Uber, Airbnb, Rent the Runway, Glossier, etc.  They all started slow aiming at big problems.  And though the road to success started with one small step at a time, to test the proposition, get customer feedback/buy-in/traction and then adapt, the ultimate opportunity was huge in all cases.  Go big or go home.

 

2. What are the benefits of early stage investment for start-up founders?

Launching your startup and driving change requires fuel!

Every effort needs resources to advance.  Whether that's human resources or financial or both.  Long before considering venture capital, remember there is an array of options for funding a startup at different stages ranging from sweat equity, both yours and others'; customer revenues; one's own capital, whether savings or credit card; friends and family; awards and grants from both public and private sources; crowdfunding, both equity-based and grant-based; and bank or other fintech loans.

The key to early-stage investing is not to dilute the ownership rights/equity of the founders at too low a valuation.  Thus, all these forms of non-equity funding are generally preferable to venture funding until you've established your proposition and proven your product/market fit by getting traction with customers.  Whatever your source, however, understand that you will need to invest to prove your business model and grow your business for investors to consider your company.

 

3. How does The Billion Dollar Fund change the status quo for women in the field of impact investment?

We seek to change the paradigm for female founders by addressing the critical venture funding gap.  Today, only 2.2% of venture funding goes into companies founded by women. Our global consortium of venture funds has already pledged over $750million to be invested into women-founded companies through 2020 and we will soon be at our overall target of $1billion (Remember: Think BIG). This represents almost half of what the entire US venture industry invests in a year and we're not stopping there. We look forward to ensuring that all venture-backable businesses founded by women also find relevant funders to fuel their growth and impact, as our partner funds do in sectors ranging from agtech, AI/robotics, blockchain, clean tech, cyber, enterprise software, fintech, life sciences, medtech, silver tech and much more!

 

4. What particular skill, practice, attitude or belief has contributed to your success? 

Our belief that women innovators are essential to solving the world's most important problems and the fact that investments into female-founded companies have better returns is the inspiration that is key to our success.  When fund managers come to realize that women bring different and important innovations to the market and higher returns and yet receive only 2% of all venture capital, they are shocked and often mobilized to seek a solution.  They come to realize that “when you invest in women, you're in good company”™.  By making a simple pledge to TBDFWomen, they join a global consortium of funds similarly pledged to address this issue and with whom they can collaborate on deal flow, capital mobilization and access to LP investors seeking gender diversity. This is key to our success.

 

K. Shelly Porges

shelly_porges_profile_photo.jpg

K. Shelly Porges is a successful serial entrepreneur, investor and global entrepreneurship advocate. Shelly is Co-Founder and Managing Partner of The Billion Dollar Fund for Women. She is Managing Director of Reservoir Q Global LLC, an advisory and investment firm and a Board Member at the Global Banking Alliance for Women, among others. She also served as the former Senior Advisor, Global Entrepreneurship Program (GEP) at the U.S. State Department under Secretary Hillary Clinton.

 

Follow her on LinkedIn and Twitter.