| Biz Women |
HouseWifeMafia.com ~ The eMagazine For Women |
A look at the exploding number of women business owners and
the increasingly sophisticated network of female advisors,
mentors, and venture capitalists who are helping them succeed.
By: Donna Fenn Published May 1999 INC Magazine
New evidence suggests that a reliable business network for
women--providing capital, know-how, and encouragement--is finally
achieving critical mass. Company builders like Fran Lent are the proof.
Fran Lent knew exactly what it would take to start her business. After nearly 10 years at Del
Monte Foods and at Specialty Brands, she had decided to do for herself what she had done for
others for so many years--create and market a brand.
Inspiration had come in the form of several futile trips to local grocery stores. Lent, a working
mother of two who lives in Burlingame, Calif., couldn't find healthful convenience foods for her
young children. Other discerning parents confirmed her perception of a clear market need, and
Lent, who had always viewed her corporate career as a starting block for entrepreneurship,
began to feel a fusion of opportunity and passion. She would create her own brand of
frozen-food entrées for children. Wildly ambitious? Absolutely. "The cost of doing business in this
industry is huge," says Lent. "It costs most large companies $250 million to build a brand." She
didn't have nearly that much money. But she had something better. She had a network.
Ten years ago Lent's idea might well have played itself out on a much less ambitious scale in her
kitchen. Like it or not, back then her chances of success would have been exponentially higher if
she had been male, but not for the reasons we have come to believe. Sure, sexism and
discrimination were--and still are--alive and well, but they were never the biggest barriers for
female entrepreneurs.
Consider that at its very heart, business is predicated on relationships and access to resources.
Entrepreneurial success lies not just in the power of a great idea but in one's ability to finance it,
bring it to market, grow it. This is never a solitary pursuit; it's an intricate dance in which the
performers are plucked as they are needed from a cast that one spends a lifetime
cultivating--one's own personal network. We look for those who possess the knowledge we lack
but who also share with us a common frame of reference. For women in business, that has
always been tricky, not so much because men have deliberately excluded them but because that
common frame of reference was so often missing. Regardless of intention, the effect was the
same: an unlevel playing field.
But as Fran Lent has discovered, things are changing. The National Foundation for Women
Business Owners (NFWBO) reports that from 1987 to 1996, the number of companies owned by
women increased by 78% nationwide, with employment and sales in those businesses growing by
183% and 236%, respectively. According to NFWBO's research director, Julie R. Weeks, the
growth in the number of women's companies outpaces the growth of all businesses by nearly two
to one. Are women smarter, more ambitious, or more entrepreneurial than they have been in the
past? Probably not. Rather, their networks, though always present, have become increasingly
sophisticated and are now ramped up to provide everything from the most rudimentary business
advice to new financing avenues.
When Lent was ready to start her business, the network she needed to make it happen was
solidly in place--former coworkers, local women's business centers, an enlightened venture
capitalist, a respected woman entrepreneur who wanted to help open doors. True, Lent was
lucky. But she was also the beneficiary of resources that didn't exist until recently. Some have
been created solely to assist woman entrepreneurs, others have evolved as a direct result of
women's growing presence in the workforce, and still others have burgeoned in response to a
perceived market opportunity. Whatever their genesis, those resources effectively nurture
fledgling enterprises like Lent's, not simply because they are woman-owned but because they
represent a previously unserviced niche. The network doesn't only help explain the growth in
female-owned businesses; it also sheds light on what it takes for just about anyone to start a
company.
the increasingly sophisticated network of female advisors,
mentors, and venture capitalists who are helping them succeed.
By: Donna Fenn Published May 1999 INC Magazine
New evidence suggests that a reliable business network for
women--providing capital, know-how, and encouragement--is finally
achieving critical mass. Company builders like Fran Lent are the proof.
Fran Lent knew exactly what it would take to start her business. After nearly 10 years at Del
Monte Foods and at Specialty Brands, she had decided to do for herself what she had done for
others for so many years--create and market a brand.
Inspiration had come in the form of several futile trips to local grocery stores. Lent, a working
mother of two who lives in Burlingame, Calif., couldn't find healthful convenience foods for her
young children. Other discerning parents confirmed her perception of a clear market need, and
Lent, who had always viewed her corporate career as a starting block for entrepreneurship,
began to feel a fusion of opportunity and passion. She would create her own brand of
frozen-food entrées for children. Wildly ambitious? Absolutely. "The cost of doing business in this
industry is huge," says Lent. "It costs most large companies $250 million to build a brand." She
didn't have nearly that much money. But she had something better. She had a network.
Ten years ago Lent's idea might well have played itself out on a much less ambitious scale in her
kitchen. Like it or not, back then her chances of success would have been exponentially higher if
she had been male, but not for the reasons we have come to believe. Sure, sexism and
discrimination were--and still are--alive and well, but they were never the biggest barriers for
female entrepreneurs.
Consider that at its very heart, business is predicated on relationships and access to resources.
Entrepreneurial success lies not just in the power of a great idea but in one's ability to finance it,
bring it to market, grow it. This is never a solitary pursuit; it's an intricate dance in which the
performers are plucked as they are needed from a cast that one spends a lifetime
cultivating--one's own personal network. We look for those who possess the knowledge we lack
but who also share with us a common frame of reference. For women in business, that has
always been tricky, not so much because men have deliberately excluded them but because that
common frame of reference was so often missing. Regardless of intention, the effect was the
same: an unlevel playing field.
But as Fran Lent has discovered, things are changing. The National Foundation for Women
Business Owners (NFWBO) reports that from 1987 to 1996, the number of companies owned by
women increased by 78% nationwide, with employment and sales in those businesses growing by
183% and 236%, respectively. According to NFWBO's research director, Julie R. Weeks, the
growth in the number of women's companies outpaces the growth of all businesses by nearly two
to one. Are women smarter, more ambitious, or more entrepreneurial than they have been in the
past? Probably not. Rather, their networks, though always present, have become increasingly
sophisticated and are now ramped up to provide everything from the most rudimentary business
advice to new financing avenues.
When Lent was ready to start her business, the network she needed to make it happen was
solidly in place--former coworkers, local women's business centers, an enlightened venture
capitalist, a respected woman entrepreneur who wanted to help open doors. True, Lent was
lucky. But she was also the beneficiary of resources that didn't exist until recently. Some have
been created solely to assist woman entrepreneurs, others have evolved as a direct result of
women's growing presence in the workforce, and still others have burgeoned in response to a
perceived market opportunity. Whatever their genesis, those resources effectively nurture
fledgling enterprises like Lent's, not simply because they are woman-owned but because they
represent a previously unserviced niche. The network doesn't only help explain the growth in
female-owned businesses; it also sheds light on what it takes for just about anyone to start a
company.
MORAL:
Don't be afraid to seek what you need!
Don't be afraid to seek what you need!
A League of Your Own
Trust your hunches.
They're usually based
on facts filed away
just below the
conscious level.
Dr. Joyce Brothers
They're usually based
on facts filed away
just below the
conscious level.
Dr. Joyce Brothers
If you view all
the things that
happen to you,
both good & bad,
as opportunities,
then you operate
out of a higher
level of
consciousness.
Les Brown
the things that
happen to you,
both good & bad,
as opportunities,
then you operate
out of a higher
level of
consciousness.
Les Brown
One worthwhile task
carried to a successful
conclusion
is worth half-a-hundred
half-finished tasks.
Malcolm S. Forbes
carried to a successful
conclusion
is worth half-a-hundred
half-finished tasks.
Malcolm S. Forbes
Achieving
'success'
is not the key
to happiness,
but happiness
is the key to
success.
If you love
what you do,
you are
successful.
'success'
is not the key
to happiness,
but happiness
is the key to
success.
If you love
what you do,
you are
successful.
| The future belongs to those who see possibilities before they become obvious. |
Life is an opportunity,
benefit from it.
Life is beauty, admire it.
Life is bliss, taste it.
Life is a dream, realize it.
Life is a challenge, meet it.
Life is a duty, complete it.
Life is a game, play it.
Life is a promise, fulfill it.
Life is sorrow, overcome it.
Life is a song, sing it.
Life is a struggle, accept it.
Life is a tragedy, confront it.
Life is an adventure, dare it.
Life is luck, make it.
Life is too precious,
do not destroy it.
Life is life, fight for it.
~ Mother Theresa
benefit from it.
Life is beauty, admire it.
Life is bliss, taste it.
Life is a dream, realize it.
Life is a challenge, meet it.
Life is a duty, complete it.
Life is a game, play it.
Life is a promise, fulfill it.
Life is sorrow, overcome it.
Life is a song, sing it.
Life is a struggle, accept it.
Life is a tragedy, confront it.
Life is an adventure, dare it.
Life is luck, make it.
Life is too precious,
do not destroy it.
Life is life, fight for it.
~ Mother Theresa
| “Luck is a matter of preparation meeting opportunity.” Oprah Winfrey |
| “Do what you can, with what you have, where you are.” Theodore Roosevelt |
| Success without honor is an unseasoned dish; it will satisfy your hunger, but it won't taste good. ~Joe Paterno |
| If at first you don't succeed, do it like your mother told you. |
| If at first you don't succeed, you're running about average. ~M.H. Alderson |
The Career Network
What I hear from a lot of women is that they've gone through their corporate days, they've built a
career, and now they want to start a business of their own," says Amy Millman, executive director
of the National Women's Business Council, a federal-government advisory panel in Washington,
D.C. In fact, a new study reveals that 22% of women who have started businesses within the past
10 years have had senior management experience, compared with only 13% of those who
started businesses 10 to 19 years ago, and 11% of those who started 20 or more years ago.
Fran Lent is part of that growing segment--women who come to entrepreneurship via corporate
careers and bring with them a critical mass of knowledge and contacts. "If I hadn't worked for Del
Monte for so long, I never would have been able to do this," concedes Lent. "I pulled together
nine consultants and made a virtual company, and they were all from Del Monte or Specialty
Brands."
Ada Chang and Debbie Bliss, former Del Monte executives, helped Lent with operations and
marketing, respectively, and Lorelle Del Matto, formerly with Specialty Brands, signed on as her
registered dietitian. Lent also outsourced her initial formula development to Del Monte's R&D
department, where a team of people who knew her well "really went the extra mile for me."
Another business contact, from a local office of a worldwide ad agency, moonlighted to work on
her packaging and print-advertising campaign, and a handful of business associates helped her
brainstorm to come up with a name for her company, now called Fran's Healthy Helpings Inc.
"Everything I did in my corporate career I did to help me start my own company," says Lent. "It
made me work even harder because I was using it as a training ground."
She left Del Monte in January 1994 to take a job at Specialty Brands specifically because the
company had a reputation for allowing its employees to be entrepreneurial. "It was the first time I
was able to take responsibility for a whole project," she recalls. Her assignment was to reposition
the company's Durkee Spice line, a project that required her to manage a team of 30 employees
for a year and a half and to travel from California to Bethlehem, Pa., once a month.
"I had to work with so many different constituencies to get this project done," she says. It looked
very much like a trial run for starting her own company.
The Women's Business Center Network
Corporate contacts were just the beginning of Lent's networking efforts. "I joined every women's
business group I could find," she recalls. And she found plenty. Through the Women's Economic
Network, a private group in San Francisco, she gained access to CEOs in the food industry, who
schooled her on servicing retailers. Karen Csejtey, the director of the YWCA's Women
Entrepreneurs Program in Palo Alto, Calif., used her media contacts to help get Lent covered in
the San Jose Mercury News. And at the Center to Develop Women Entrepreneurs, a mentoring
program at San Jose State University, Lent met the CEO of a frozen-cookie-dough company who
allowed her to warehouse her sample products for free.
Like most of their counterparts in other regions, those groups either didn't exist or were just in
their infancy five years ago. Now more than 60 women's business centers are partially funded by
the Small Business Administration and by countless more independent nonprofit groups that
charge minimal fees, according to Harriet Fredman, deputy assistant administrator at the SBA's
Office of Women's Business Ownership, in Washington, D.C. "There have always been small
groups around the country, but now they're part of a larger network," says Fredman. Centers
that receive SBA funding participate in a monthly conference call with Fredman's office and are
also linked through a new Web site that Fredman says received more than 350,000 hits in its first
three months.
For Lent, persistent networking at women's business centers opened up a world of contacts that
moved her beyond her corporate frame of reference. For others, the centers serve an even
more critical role, often training women who have little or no business experience. For instance,
Marsha Florio and her partners, many of them former athletes, coaches, and teachers, worked
with the Women's Business Development Center in Philadelphia for a year and a half before
opening HerSport, a Haddonfield, N.J., sports specialty store for women. "We took a 12-week
course at the center and came out with a business plan," says Florio. The course instructor,
Linda Karl, used her banking connections to help the partners secure a loan, and center director
Geri Swift introduced Florio and her partners to Sherry Black, another course graduate, who
produces specialty gift items for women and girls in sports. Black is now a supplier to HerSport. "I
don't think we'd be where we are if we didn't have the center as a stepping-stone," says Florio.
"They've really taken care of us." The total cost for the course: approximately $500.
The Capital Network
Historically, women have cited the lack of access to capital as one of the biggest barriers to
starting a business. "When we first started, women were getting love money and running up their
credit cards to start businesses," recalls Hedy Ratner, director of the Women's Business
Development Center in Chicago. "Now banks are less resistant, and women are a target market."
Women's business centers that once focused almost exclusively on training and education are
now more often doing their own microlending, using money they've raised through private
investors, the SBA, or state economic-development agencies. They also link clients to the larger
banking community through the SBA's prequalification and loan-guarantee programs. "A bank
might now refer a client to us for more help on, say, a business plan," says Wendy Werkmeister,
president of the Wisconsin Women's Business Initiative Corp. "In the past, she might just get
rejected and never cross our radar screen."
Fran Lent's financing challenges were more complex than most founders', given the scale of her
idea. Stock options from her husband's former employer yielded $100,000, but Lent needed
close to $1 million in seed capital, and she was determined to raise it through the venture-capital
community. Her networking efforts led her to F. Noel Perry, managing director at Baccharis
Capital, a Menlo Park, Calif., venture-capital firm that is "very committed to funding women-led
businesses," says Perry. Lent impressed him as "the quintessential entrepreneur," and he
agreed to sponsor her presentation to Investors' Circle, an elite group of individuals committed to
socially responsible investing. On the strength of her pitch, Lent landed the funding she needed
from Baccharis Capital and another Investors' Circle member.
According to Investors' Circle founder Susan Davis, members' investments in companies led by
women have grown from 2% to 25% in the past three years, an increase she attributes to a
temporary spin-off of 15 female investors. "The women in the circle felt we weren't getting
enough women-led deals," says Davis. "So they formed their own group and raised between $2
million and $3 million." After two years the women investors merged back into the larger group,
bringing with them the contacts and experience that had originally eluded the larger group.
"One of the reasons women don't get money is that they don't have relationships within venture
funds," says Patty Abramson, managing director of the Women's Growth Capital Fund, in
Washington, D.C., who is also involved in the Investors' Circle. "I wouldn't say this is about
discrimination; it's about not having the relationships, and business is about relationships. The
way we see it is that there are women-owned businesses out there that are every bit as
credit-worthy as male-owned businesses, but they just weren't getting in the door."
Abramson's group has raised $6 million from individuals and institutional investors and plans to
grow that into a $25-million-to-$30-million fund with help from a Small Business Investment Co.
and additional investments. The group's funds are earmarked specifically for expansion of
woman-owned companies. Her male counterparts in the mainstream venture-capital community
tell her that she'll have those deals to herself--that the kinds of companies she's interested in
funding just don't come to their attention. But part of her mission is to make sure they do. "We
spend an enormous amount of time creating relationships with other venture firms," she says.
"We want them to invest with us."
Abramson is not alone. "There is an increase in funds being put together to invest in
woman-owned businesses," says Nina McLemore, senior managing partner at Regent Capital
Partners, a New York City venture-capital firm. "There are women in the banking field who now
have the credentials to start their own funds, and they believe that there is a trend toward women
starting businesses that these funds can invest in." Christine Cordaro, for instance, spent six
years at a venture-capital firm and felt "there was an opportunity to create a fund around a
market not being adequately served." With data provided by a venture-industry research group,
she estimated that only 1.6% of venture money invested from 1991 to 1996 went to
woman-owned businesses. So she founded Aurora Venture Partners in late 1996, raising about
80% of what will ultimately be a $45-million equity fund targeting companies owned by women.
"I'm not doing this on a socially correct platform," she insists. "This is purely a business
opportunity."
The Mentor Network
When Lane Nemeth founded Discovery Toys, 20 years ago, it never occurred to her to seek out
a female mentor to guide her through the labyrinth of complex decisions that nascent
entrepreneurs face every day. There simply weren't any readily available role models. Now
Nemeth, the CEO of a $100-million company, receives on average one phone call a week from
entrepreneurs seeking advice or an investment. A year and a half ago, Fran Lent was among
them, and Nemeth, intrigued by the product, agreed to grant her a 15-minute audience. "In those
15 minutes, I saw myself at 30 and said, This woman has got to succeed," recalls Nemeth. "I
would have killed for a mentor." That day, Nemeth agreed to sit on Lent's board of directors.
"When she was first looking for venture capital, I helped her with negotiating strategies, and we
talked through the wisdom of deciding who your venture capitalist will be," says Nemeth, who
received venture funding for her own company. "We've talked through marketing ideas and
joint-venture proposals. It's not that I'm that smart--I've just done it for 20 years, and I can keep
her out of trouble."
Nemeth is among a growing number of seasoned female entrepreneurs who are now mentoring
the younger generation. "I see an increasing number of women who are asking for mentors, for
technical and network assistance," says Anna K. Lloyd, president of the Committee of 200, a
Chicago-based national network of top woman executives and CEOs. In response, the group is
launching a pilot mentoring program that will match three C-200 members with each protégé.
Most women's business centers also have formal mentoring programs that match successful
company owners with their fledgling counterparts. "Our mentoring program started five years
ago, and it's one of the most powerful things we do," says Wendy Werkmeister of the Wisconsin
Women's Business Initiative. The organization has matched more than 100 early-stage
entrepreneurs with mentors. Among them are Laura Farchmin, owner of Fairchild's Juice and
Java, and Mary Jane Zvara, her mentor and the CEO of Creative Office Management.
Farchmin began working with Zvara last year, when staffing and cash-flow problems at her
two-year-old coffeehouse had her "burned out and wondering whether I wanted to continue."
Zvara helped her reduce turnover by implementing a new hiring and training program that cut the
number of Farchmin's W-2s from 27 in 1996 to 6 last year. "One of the things you lose when you
start a business is the benefit of having a boss--someone who has more experience than you do.
She's someone to check in with," says Farchmin.
Fran Lent's products--three different frozen-food meals for kids--are now distributed in more than
300 grocery stores in northern California, and she expects Fran's Healthy Helpings to rack up $2
million in revenues this year. She talks to Nemeth every couple of weeks, is in touch with Patty
Abramson about the possibility of an investment down the road, and still relies heavily on her
former colleagues even though she has started hiring full-time employees.
The network has served Lent well, but it has changed somewhat since she first started her
company: it has expanded and has started to include more men. And that was always the goal.
The network didn't emerge so that those who felt excluded could take their marbles out of the big
game and play on their own. It evolved as a bridge to a larger playing field where gender
becomes virtually insignificant.
Donna Fenn is a contributing editor at Inc.
What I hear from a lot of women is that they've gone through their corporate days, they've built a
career, and now they want to start a business of their own," says Amy Millman, executive director
of the National Women's Business Council, a federal-government advisory panel in Washington,
D.C. In fact, a new study reveals that 22% of women who have started businesses within the past
10 years have had senior management experience, compared with only 13% of those who
started businesses 10 to 19 years ago, and 11% of those who started 20 or more years ago.
Fran Lent is part of that growing segment--women who come to entrepreneurship via corporate
careers and bring with them a critical mass of knowledge and contacts. "If I hadn't worked for Del
Monte for so long, I never would have been able to do this," concedes Lent. "I pulled together
nine consultants and made a virtual company, and they were all from Del Monte or Specialty
Brands."
Ada Chang and Debbie Bliss, former Del Monte executives, helped Lent with operations and
marketing, respectively, and Lorelle Del Matto, formerly with Specialty Brands, signed on as her
registered dietitian. Lent also outsourced her initial formula development to Del Monte's R&D
department, where a team of people who knew her well "really went the extra mile for me."
Another business contact, from a local office of a worldwide ad agency, moonlighted to work on
her packaging and print-advertising campaign, and a handful of business associates helped her
brainstorm to come up with a name for her company, now called Fran's Healthy Helpings Inc.
"Everything I did in my corporate career I did to help me start my own company," says Lent. "It
made me work even harder because I was using it as a training ground."
She left Del Monte in January 1994 to take a job at Specialty Brands specifically because the
company had a reputation for allowing its employees to be entrepreneurial. "It was the first time I
was able to take responsibility for a whole project," she recalls. Her assignment was to reposition
the company's Durkee Spice line, a project that required her to manage a team of 30 employees
for a year and a half and to travel from California to Bethlehem, Pa., once a month.
"I had to work with so many different constituencies to get this project done," she says. It looked
very much like a trial run for starting her own company.
The Women's Business Center Network
Corporate contacts were just the beginning of Lent's networking efforts. "I joined every women's
business group I could find," she recalls. And she found plenty. Through the Women's Economic
Network, a private group in San Francisco, she gained access to CEOs in the food industry, who
schooled her on servicing retailers. Karen Csejtey, the director of the YWCA's Women
Entrepreneurs Program in Palo Alto, Calif., used her media contacts to help get Lent covered in
the San Jose Mercury News. And at the Center to Develop Women Entrepreneurs, a mentoring
program at San Jose State University, Lent met the CEO of a frozen-cookie-dough company who
allowed her to warehouse her sample products for free.
Like most of their counterparts in other regions, those groups either didn't exist or were just in
their infancy five years ago. Now more than 60 women's business centers are partially funded by
the Small Business Administration and by countless more independent nonprofit groups that
charge minimal fees, according to Harriet Fredman, deputy assistant administrator at the SBA's
Office of Women's Business Ownership, in Washington, D.C. "There have always been small
groups around the country, but now they're part of a larger network," says Fredman. Centers
that receive SBA funding participate in a monthly conference call with Fredman's office and are
also linked through a new Web site that Fredman says received more than 350,000 hits in its first
three months.
For Lent, persistent networking at women's business centers opened up a world of contacts that
moved her beyond her corporate frame of reference. For others, the centers serve an even
more critical role, often training women who have little or no business experience. For instance,
Marsha Florio and her partners, many of them former athletes, coaches, and teachers, worked
with the Women's Business Development Center in Philadelphia for a year and a half before
opening HerSport, a Haddonfield, N.J., sports specialty store for women. "We took a 12-week
course at the center and came out with a business plan," says Florio. The course instructor,
Linda Karl, used her banking connections to help the partners secure a loan, and center director
Geri Swift introduced Florio and her partners to Sherry Black, another course graduate, who
produces specialty gift items for women and girls in sports. Black is now a supplier to HerSport. "I
don't think we'd be where we are if we didn't have the center as a stepping-stone," says Florio.
"They've really taken care of us." The total cost for the course: approximately $500.
The Capital Network
Historically, women have cited the lack of access to capital as one of the biggest barriers to
starting a business. "When we first started, women were getting love money and running up their
credit cards to start businesses," recalls Hedy Ratner, director of the Women's Business
Development Center in Chicago. "Now banks are less resistant, and women are a target market."
Women's business centers that once focused almost exclusively on training and education are
now more often doing their own microlending, using money they've raised through private
investors, the SBA, or state economic-development agencies. They also link clients to the larger
banking community through the SBA's prequalification and loan-guarantee programs. "A bank
might now refer a client to us for more help on, say, a business plan," says Wendy Werkmeister,
president of the Wisconsin Women's Business Initiative Corp. "In the past, she might just get
rejected and never cross our radar screen."
Fran Lent's financing challenges were more complex than most founders', given the scale of her
idea. Stock options from her husband's former employer yielded $100,000, but Lent needed
close to $1 million in seed capital, and she was determined to raise it through the venture-capital
community. Her networking efforts led her to F. Noel Perry, managing director at Baccharis
Capital, a Menlo Park, Calif., venture-capital firm that is "very committed to funding women-led
businesses," says Perry. Lent impressed him as "the quintessential entrepreneur," and he
agreed to sponsor her presentation to Investors' Circle, an elite group of individuals committed to
socially responsible investing. On the strength of her pitch, Lent landed the funding she needed
from Baccharis Capital and another Investors' Circle member.
According to Investors' Circle founder Susan Davis, members' investments in companies led by
women have grown from 2% to 25% in the past three years, an increase she attributes to a
temporary spin-off of 15 female investors. "The women in the circle felt we weren't getting
enough women-led deals," says Davis. "So they formed their own group and raised between $2
million and $3 million." After two years the women investors merged back into the larger group,
bringing with them the contacts and experience that had originally eluded the larger group.
"One of the reasons women don't get money is that they don't have relationships within venture
funds," says Patty Abramson, managing director of the Women's Growth Capital Fund, in
Washington, D.C., who is also involved in the Investors' Circle. "I wouldn't say this is about
discrimination; it's about not having the relationships, and business is about relationships. The
way we see it is that there are women-owned businesses out there that are every bit as
credit-worthy as male-owned businesses, but they just weren't getting in the door."
Abramson's group has raised $6 million from individuals and institutional investors and plans to
grow that into a $25-million-to-$30-million fund with help from a Small Business Investment Co.
and additional investments. The group's funds are earmarked specifically for expansion of
woman-owned companies. Her male counterparts in the mainstream venture-capital community
tell her that she'll have those deals to herself--that the kinds of companies she's interested in
funding just don't come to their attention. But part of her mission is to make sure they do. "We
spend an enormous amount of time creating relationships with other venture firms," she says.
"We want them to invest with us."
Abramson is not alone. "There is an increase in funds being put together to invest in
woman-owned businesses," says Nina McLemore, senior managing partner at Regent Capital
Partners, a New York City venture-capital firm. "There are women in the banking field who now
have the credentials to start their own funds, and they believe that there is a trend toward women
starting businesses that these funds can invest in." Christine Cordaro, for instance, spent six
years at a venture-capital firm and felt "there was an opportunity to create a fund around a
market not being adequately served." With data provided by a venture-industry research group,
she estimated that only 1.6% of venture money invested from 1991 to 1996 went to
woman-owned businesses. So she founded Aurora Venture Partners in late 1996, raising about
80% of what will ultimately be a $45-million equity fund targeting companies owned by women.
"I'm not doing this on a socially correct platform," she insists. "This is purely a business
opportunity."
The Mentor Network
When Lane Nemeth founded Discovery Toys, 20 years ago, it never occurred to her to seek out
a female mentor to guide her through the labyrinth of complex decisions that nascent
entrepreneurs face every day. There simply weren't any readily available role models. Now
Nemeth, the CEO of a $100-million company, receives on average one phone call a week from
entrepreneurs seeking advice or an investment. A year and a half ago, Fran Lent was among
them, and Nemeth, intrigued by the product, agreed to grant her a 15-minute audience. "In those
15 minutes, I saw myself at 30 and said, This woman has got to succeed," recalls Nemeth. "I
would have killed for a mentor." That day, Nemeth agreed to sit on Lent's board of directors.
"When she was first looking for venture capital, I helped her with negotiating strategies, and we
talked through the wisdom of deciding who your venture capitalist will be," says Nemeth, who
received venture funding for her own company. "We've talked through marketing ideas and
joint-venture proposals. It's not that I'm that smart--I've just done it for 20 years, and I can keep
her out of trouble."
Nemeth is among a growing number of seasoned female entrepreneurs who are now mentoring
the younger generation. "I see an increasing number of women who are asking for mentors, for
technical and network assistance," says Anna K. Lloyd, president of the Committee of 200, a
Chicago-based national network of top woman executives and CEOs. In response, the group is
launching a pilot mentoring program that will match three C-200 members with each protégé.
Most women's business centers also have formal mentoring programs that match successful
company owners with their fledgling counterparts. "Our mentoring program started five years
ago, and it's one of the most powerful things we do," says Wendy Werkmeister of the Wisconsin
Women's Business Initiative. The organization has matched more than 100 early-stage
entrepreneurs with mentors. Among them are Laura Farchmin, owner of Fairchild's Juice and
Java, and Mary Jane Zvara, her mentor and the CEO of Creative Office Management.
Farchmin began working with Zvara last year, when staffing and cash-flow problems at her
two-year-old coffeehouse had her "burned out and wondering whether I wanted to continue."
Zvara helped her reduce turnover by implementing a new hiring and training program that cut the
number of Farchmin's W-2s from 27 in 1996 to 6 last year. "One of the things you lose when you
start a business is the benefit of having a boss--someone who has more experience than you do.
She's someone to check in with," says Farchmin.
Fran Lent's products--three different frozen-food meals for kids--are now distributed in more than
300 grocery stores in northern California, and she expects Fran's Healthy Helpings to rack up $2
million in revenues this year. She talks to Nemeth every couple of weeks, is in touch with Patty
Abramson about the possibility of an investment down the road, and still relies heavily on her
former colleagues even though she has started hiring full-time employees.
The network has served Lent well, but it has changed somewhat since she first started her
company: it has expanded and has started to include more men. And that was always the goal.
The network didn't emerge so that those who felt excluded could take their marbles out of the big
game and play on their own. It evolved as a bridge to a larger playing field where gender
becomes virtually insignificant.
Donna Fenn is a contributing editor at Inc.
