When Women Control the Money, Female Founders Get Funded

By Sheila Marikar

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Karen Cahn, the founder of iFundWomen, which provides female entrepreneurs access to capital, at the Wingable pitch night.CreditCreditDesiree Rios for The New York Times

Female entrepreneurs have long known how hard it is to raise money from a roomful of men. “I would walk into these rooms of late-40s, early-50s dudes — potential investors — and they would just look at me blankly, like, ‘I do not get it,’” said Rachel Drori, the founder of Daily Harvest, a delivery service for produce-centric meals. “Sometimes, they’d say, ‘Can you send samples to my wife?’”

What if Ms. Drori, and others like her, could pitch to a roomful of women?

On a frigid evening in January, some 275 entrepreneurs filed into the SoHo outpost of The Wing, the women-only co-working club, for a women-only pitch night. They grabbed seats (pink folding chairs, mint settees, maroon couches) as well as sustenance (crudités, cheese, wine) ahead of the main event: Ten start-ups would present their business propositions to potential investors as well as those interested in learning from or working with them.

The gathering was called Wingable, named for the club and Able Partners, a New York venture capital firm that had already put money into each of the 10 companies. The fund, which was started three years ago by Lisa Blau and Amanda Eilian, has been an early-stage investor in a number of female-founded companies, including The Wing and Goop.

Prior to the event, the start-ups spent six weeks in an Able incubator program, honing their business models and pitch decks. “We’re calling it the anti-‘Shark Tank’ because everyone is already a winner,” Ms. Blau said. “They’re getting funding from Able, and we’re just trying to bring more female investors to their cap table.”

Among the attendees was Alexandra Wilkis Wilson, co-founder of Gilt Groupe and more recently Glamsquad, who said she was discussing an investment with two of the Wingable start-ups. “I know a lot of women are coming with their checkbooks open,” she said, surveying the crowd.

According to the venture-tracking site Crunchbase, as of October 2017, women made up just 8 percent of investing partners at the top 100 VC firms. And last year, female founders received only 2.2 percent of the $130 billion in venture money invested in the United States, according to the analytics firm PitchBook and the advocacy organization All Raise. That works out to a combined $2.9 billion; in comparison, a single company, Juul, which makes candy-flavored e-cigarette cartridges, drew $12.8 billion.

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“I don’t even care about the harassment,” said Bea Arthur, a start-up entrepreneur, about dealing with male venture capitalists. “It’s just like, if you’re not going to invest, then you’re just wasting my time and trying to hit on me on top of it.”CreditDesiree Rios for The New York Times

Wingable presented a microcosm of an alternative view: What would VC-funded industries look like if more women controlled the money?

“We need the old girl’s network,” said Linnea Conrad Roberts, the chief executive of Gingerbread Capital and a former partner at Goldman Sachs, as she waved to Ms. Blau. “If you think about the ecosystem that guys have, a Silicon Valley founder will make hundreds of millions of dollars and he doesn’t go home and retire; he starts putting it toward funding other companies.”

“The problem, quite honestly, was people like me, sitting on the sidelines, doing philanthropy, retired from my Wall Street career and not thinking about it,” Ms. Roberts added. “I spend a good chunk of time just trying to get more women focused. All they need is a bit of a lesson, contacts and then they need to come to amazing things like this. This is a free look at companies.”

Liz Lange, the maternity fashion pioneer, tapped Ms. Roberts’s shoulder to say hi; Jennifer Fleiss, the co-founder of Rent the Runway, slid into a seat in front of them.

“Guys would never do an event like this,” Ms. Roberts said. “And the food would suck and it would not be this well organized, and the egos: You might have to leave, you’d have to go outside and get a breath of fresh air. We don’t have to play golf or poker in order to get together and get business done.”

Ms. Blau, 43, and Ms. Eilian, 41, met in 2004, when the former was about to graduate from Harvard Business School and the latter was preparing to begin her first year there. In 2007, Ms. Blau started VitalJuice, a newsletter about healthy living, and Ms. Eilian started Videolicious, a platform for making high-end video. She went through five rounds of fund-raising, some while pregnant.

Lisa Blau and Amanda Eilian introduce the Wingable finalists.CreditDesiree Rios for The New York Times

“There’s nothing like being a pregnant woman in the tech world to make you feel like an alien,” Ms. Eilian said.

She and Ms. Blau wondered about the struggles of female founders who didn’t graduate from an elite business school or have a well-pedigreed social network. (Ms. Blau’s husband is the chief executive of Related Companies, the mega-developer, and Ms. Eilian’s husband co-founded the private equity firm Starwood Capital Group.) They formed Able in 2016 to invest their own money — they have no outside capital — in early-stage companies led by women.

Ms. Blau and Ms. Eilian declined to identify the size of their fund, but said their portfolio has 38 companies, with investments starting at $50,000. Twenty percent of the start-ups have men on their executive teams.

Able is not the only recently formed investment fund targeting women. In 2015, Arlan Hamilton, a once homeless music manager, created Backstage Capital, a $36 million venture capital fund dedicated to “underestimated founders” — women, people of color, the L.G.B.T.Q. community. In 2014, Anu Duggal started Female Founders Fund, which she now runs with Sutian Dong, a venture capital fund that invests solely in women-founded start-ups. It’s a small world with a lot of overlap: Ms. Blau gave Female Founders Fund one of its first checks, and several of the companies that participated in Wingable have had conversations with Backstage Capital and Female Founders Fund.

Last fall, Ms. Blau and Ms. Eilian sketched out the idea that would lead to the Wingable pitch night in January. In October, they put out a call for interested start-ups, specifying that they had to have at least one founder who identified as female, and had to be in prelaunch phase, with less than $5 million in revenue.

Within two weeks, Ms. Blau and Ms Eilian had more than 800 applications. They hired two M.B.A. graduates to comb through them and enlisted Ms. Eilian’s sister, Sarah Godwin, who until recently worked in recruitment at the Massachusetts Institute of Technology, to devise an evaluation matrix for the most promising candidates.

Flori Marquez, the founder of BlockFi, making her pitch. Last year, female founders received only 2.2 percent of the $130 billion in venture money invested in the United States.CreditDesiree Rios for The New York Times

By November, Able chose 10 start-ups to back; the fund ended up investing a total of $700,000 in the group at varying degrees of equity. Over the course of a six-week “boot camp,” Ms. Eilian and Ms. Blau offered the women access to their network of investors and advisers; put them through media training; paired them with mentors, including Ms. Wilkis Wilson, SoulCycle’s chief executive, Melanie Whelan, and the Away co-founder Jen Rubio; and held “office hours” to zhuzh up their PowerPoint pitch decks.

The day before the showcase at the Wing, the group gathered at West-bourne, a vegetarian cafe in SoHo, to practice their presentations. A projector had been set up next to a vast spread of purple cauliflower and other crudités.

When Zofia Moreno, a founder of the probiotic drink Oba, stumbled on her lines midway through her script, Bea Arthur, who started an on-demand therapy service called the Difference, yelled, “You’re doing great, it’s O.K.!”

Others practiced punch lines and sound bites designed for Twitter. “Our equipment is not barbells and treadmills; it’s wine and Kleenex,” said Shannon McLay, 40, who has started a chain of financial coaching centers called Financial Gym.

Other companies included BlockFi, which provides banking services for investors in cryptocurrency, and AcadeMe, a platform that teaches women workplace skills like how to negotiate a salary increase. The only men in the room were kitchen staff and a guy named Evan who kept his head down and clicked slides on a laptop hooked up to a projector.

Over a lunch of cabbage salad, falafel bowls and sweet potato tacos, the participants talked about dealing with male investors. “This investor once told me, ‘I’m too good-looking to be accused of harassment,’” said Viveka Hulyalkar, 26, the co-founder of Beam, a charitable donation service.

Chanel Melton founded RoseGold Pro, one of the 10 female-led start-ups backed by Able.CreditDesiree Rios for The New York Times

“I don’t even care about the harassment,” said Ms. Arthur, 35. “It’s just like, if you’re not going to invest, then you’re just wasting my time and trying to hit on me on top of it.”

“Last year, when I was raising my seed, this guy was like, ‘It must be really difficult for you to raise money, Shannon, because men dissociate intelligence from attractiveness,’” Ms. McLay said. Everyone in earshot groaned.

“I’ve heard, ‘I really love you, Chanel, I think you have an amazing company, but I think I might want to date you,’” said Chanel Melton, 31, the founder of a hair-extension company called RoseGold Pro. More groans. “He followed up later, like, ‘Hey, I hope I didn’t make you feel uncomfortable.’”

In February, the mayor’s office announced that it will invest $30 million in women-led start-ups through a program called WE Venture, in coordination with private venture capital firms that have a track record in the area. Alicia Glen, the deputy mayor in charge of the initiative, said that she would be asking Able to provide tips about deals and female entrepreneurs worth watching.

“You don’t want to let any smart woman or any good idea fall through the cracks simply because it doesn’t work for a particular fund manager,” Ms. Glen said. “Lisa probably gets pitched a lot of stuff that’s not ready for her but great for us. If we get pitched some wellness hemp thing that you put on your body and it makes you tall and skinny, well, they should go work with Lisa. I’m a middle-aged bureaucrat; I have no idea about that stuff.”

At the Wing in January, the crowd cracked up at Ms. McLay’s line about wine and Kleenex and cheered at Ms. Arthur’s ability to dance her way past a PowerPoint glitch. After the presentations, the women stood at tables around the perimeter of the room to meet with audience members and investors.

“She, her, they all have very strong handshakes,” Ms. Arthur said, nodding at two blazer-clad women who had given her their business cards. “You can tell they’re real investors.”

At her table, Ms. McLay wore a T-shirt that read “Money is my spirit animal.” “It’s fun, it’s good for branding awareness, but we’ll see if the checks come in,” she said. “That’s the next step — what checks get written. Talk to me next week.”

I called her the following week. She was in touch with five new potential investors. “We got money from Able, which is wonderful,” she said. “T.B.D. on other money. But I will say that the ones who are talking to me, I know they’re having the conversation because Able gave us money. Investors want to invest in whoever other people are investing in.” Even in the “anti-‘Shark Tank,’” some funder-founder dynamics transcend gender.