Women Entrepreneurs Use Springboard for Funding

The Springboard Venture Capital Forum, held recently at Harvard Business School, was a platform for twenty-three women entrepreneurs seeking heavy-duty financing.
by Martha Lagace

What do a health food manufacturer, an infectious-diseases specialist and a content-management expert have in common? Answer: All are women, all are entrepreneurs. And by virtue of being women and entrepreneurs they share one disheartening statistic: According to the most recent research, women CEOs typically receive just 6 percent of the $69 billion available in venture capital in the United States, according to the VC research firm VentureOne.

In an effort to boost the odds, 23 women took the podium at HBS as part of the Springboard Venture Capital Forum on November 9 to pitch their businesses to some 200 investors in the audience.

The goal of the event was simple: to get financing.

"This is about money changing hands," Harvard Business School professor Myra M. Hart, forum co-chair, told the audience. "It is about the opportunity for many of you to be investing and it is the opportunity for these wonderful entrepreneurs to earn and return to those investors."

Organized by the Washington, D.C.-based nonprofit Springboard Enterprises, in tandem with the Center for Women & Enterprise, a New-England based nonprofit which aims to empower women to become economically self-sufficient and prosperous through entrepreneurship, the event was the seventh in a nationwide series.

I think we need people with that kind of courage and vision, and they need those of you who have capital to invest.
— Kim B. Clark

Although it's too soon to tell how the entrepreneurs fared financially as a result of the event, stats from the year 2000 are encouraging. Forty percent of the women entrepreneurs in last year's New England forum collectively raised $100 million in equity capital. According to Andrea Silbert (HBS MBA '92), founder and CEO of the Center for Women & Enterprise, a full 90 percent of the companies that participated in the New England 2000 forum are still in business—remarkable news given that quite a few were dot-coms. All told, entrepreneurs at the past six forums nationwide have raised over $600 million for seed, first, or later round investment capital.

Presenters at the HBS event came with a specific fundraising goal between $1 million and $15 million, with most seeking money in the $2 million to $5 million arena. The two entrepreneurs seeking the most, $15 million, were Donna Lencki of Choicelink Corp., a company that helps people personalize healthcare and benefits, and Carol Nacy of Sequella, Inc., a biotech firm focused on controlling global infectious diseases, especially tuberculosis.

Most of the companies were already up and running. Their funding to date has come from myriad sources including venture groups such as Kodiak Venture Partners and investors such as Nobel Laureate (and HBS professor) Robert C. Merton, as well as individual angels, family, friends, and the founders themselves.

The rules for applying to the Springboard forum were simple. Each company must have a woman in a key management role—as CEO, founder, co-founder, CFO, etc.—with a "significant equity position." The companies must be considered high-growth businesses, and indeed, aside from a whole-foods business, most were in traditionally fast-track fields such as technology, e-commerce, telecommunications, and life sciences.

Two hundred and fifty volunteers helped screen and interview the applicants who met the September 6 deadline. Winning applicants then received hands-on coaching from McKinsey & Co. and Springboard to help them refine their business models and hone their ten-minute presentations for the forum.

Here is just a small sampling of the twenty-three companies pitched:

photo of Michele Honomichl
Michele Honomichl

GPSLink. The average corporation uses up to ten systems to manage the human resources process in moving its executives and their families both abroad and domestically, said GPSLink co-founder and principal Michele Honomichl. GPSLink technology products can save companies time and money. In this economy, she said, "It's a need to have, not a nice to have." Seeking $3 million to $5 million.

photo of A. G. Breitenstein
A. G. Breitenstein

PrivaSource Inc. The company motto is "Better data, better privacy," said founder and Chief Policy Officer A. G. Breitenstein. PrivaSource integrates and "scrubs" healthcare data for pharma, biotech, and healthcare companies so that it is meaningful to them scientifically. At the same time individual patients are shielded and their anonymity is protected. Seeking $4 million.

Sandra Serkes
Sandra Serkes

Valora Technologies Inc. "We find the needle in the haystack," said CEO and President Sandra Serkes. Her company has a patent-pending computer server, the Linkify Information Connectivity Server, that works to ease the "pain points" for federal law enforcement agencies and law firms dealing with data overload. Seeking $3 million.

In an opening welcome, HBS Dean Kim B. Clark said entrepreneurship has become not only a tremendous engine of growth in the United States but also a critically important style of managing. "I want to salute those of you who are here making presentations today and trying to build companies. I think we need people with that kind of courage and vision, and they need those of you who have capital to invest," he said.

Forum co-chair Robert F. Higgins, of Highland Capital and an HBS senior lecturer, said, "This is about making money and investing, but it's also about entrepreneurship. And entrepreneurship in this country right now is, I think, our great hope and has been the great hope of the last two decades. Having half of our society somewhat inhibited in their access to capital is a bad thing."

This is actually a great time to be a venture capitalist and to be an entrepreneur, he added. Although diminished valuations are frustrating to some entrepreneurs, he said, the really dangerous time was two years ago when companies were being built too quickly.

"Entrepreneurship is all about experimentation," he said. "I'm incredibly optimistic. We just raised a new fund at Highland. I've never seen so much enthusiasm in our shop as I've seen in the last few months."

photo of Andrea Silbert
Andrea Silbert

"I think Springboard really is changing the world of business for women, and moving us forward, and of course moving the whole country forward," said Andrea Silbert, of the Center for Women & Enterprise. A study by the Kauffman Center for Entrepreneurial Leadership, she said, found that countries that were entrepreneurial grew the most quickly. Countries that were entrepreneurial were also most likely to be integrating women into the entrepreneurial sector.

"So we know that promoting women in business is not just about helping women. It's about driving our country forward," she said. At the forum, she said, "these women are growing their companies in one of the most challenging economic environments. However, they are entrepreneurs. So this is all they can do. They are not going back; they are not bunkering down and closing the shutters and saying 'It's too tough an environment.' They're going forward with as much passion and commitment as they can."

The next Springboard venture forum will be held March 21, 2002 in Dallas, Texas.

About the Author

Martha Lagace is senior editor of Working Knowledge.