Tag Archive for: entrepreneur

Op-ed: Don’t Call it a ‘Pipeline Problem’

by Margaret Anadu
Head of Goldman Sachs’ Urban Investment Group and Launch With GS Lead Investor
Here’s a phrase I’d like to see retired: pipeline problem. As in, the reason that only one percent of venture capital dollars go to Black and Latinx entrepreneurs is because there simply aren’t enough Black and Latinx founders out there. You hear the same excuse when it comes to why the number is just below three percent for women-only teams.

I can tell you from my fifteen years of experience investing in areas overlooked by most investors that the opportunities are definitely there. To take just one example, Black women are starting businesses at the fastest rate in the United States – and are receiving under 0.1 percent of all venture funding.

That’s a number that should shock you. For investors, it should also get you excited. As the head of the Urban Investment Group at Goldman Sachs, through which we’ve invested over $1 billion in opportunities led by people of color, and as one of the lead investors for Launch With GS, it’s my job to drive capital where talent is abundant but access to capital is not. And let me just say this: That is an incredibly compelling investment strategy.

In the 18 months since we started Launch With GS, our commitment to invest in businesses with diverse leadership, we’ve invested $230 million globally, backing businesses with game-changing ideas, innovative products and cutting edge technology. Our returns-driven investment thesis spans geographies and sectors – from a software provider in Atlanta, to a fintech company in Bengaluru and a pediatrics clinic in Shanghai. Along the way, we’ve heard from more than 7,000 entrepreneurs and investors, whose insights continue to shape the initiative.

But our ambition is to do much more. We started Launch With GS with the clear conviction that diverse leadership teams perform better. We knew there was opportunity in what is essentially an underinvested asset class. But we also knew that the forces behind that lack of investment were complex. The gap is about relationships, networks, biases, resources – the entire structure of the global funding ecosystem.

That’s why today, we’re announcing our first Launch With GS Black and Latinx Entrepreneur Cohort to connect growth-minded founders with the very best of Goldman Sachs. Over the course of 8 weeks, we’ll pair emerging companies with leaders at the firm who are experts in their fields – whether that’s an enterprise software investor, fintech research analyst, or a consumer retail-focused investment banker. And just as importantly, we’ll connect these companies to the Goldman Sachs network, including Fortune 500 companies that could be their customers, and leading start-up advisors who could help support their growth.

I’m an investor. I get excited by meeting ambitious people who are building great companies. Launch With GS is about connecting those founders to Goldman Sachs, a recipe that for more than 150 years has led to some pretty extraordinary successes. Launch With GS is already a part of that history. With the Black and Latinx Entrepreneur Cohort, this is one more step toward building an inclusive future.

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Op-Ed: How Seed Crowdfunding is Unleashing Female Entrepreneurial Potential

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Guest contributed by Aoife FloodAoife Flood Crowdfunding

I recently had the privilege of being part of an exciting PwC research project undertaken in collaboration with The Crowdfunding Centre culminating in the release of our Women Unbound: Unleashing female entrepreneurial potential report.

The report explores the experience of women in achieving finance raising success through seed crowdfunding compared with more traditional finance raising routes and brings to the fore a lot of powerful and scary insights and opportunities. For example, while challenges like the gender leadership gap and the gender pay gap receive widespread media attention, the barriers that female-led businesses and entrepreneurs face in accessing finance have been much less visibly reported. For me personally being part of this research process was certainly somewhat of a rude awakening.

The fact is most decision makers in the venture capital industry are male, and research shows that male entrepreneurs are 86% more likely to be venture capital funded than their female counterparts, and 59% more likely to secure angel investment. Meanwhile, a $300 billion financing gap exists globally for formal, women-owned small businesses, and 70% of women-owned small and medium sized enterprises have inadequate or no access to financial services.

One thing is clear, female entrepreneurs receive less than male entrepreneurs through traditional funding channels and this funding gap is a missed opportunity. Investing in or supporting women-led business has the potential to deliver some of the highest-returns – for investors and societies. Take for example the UK, if they could match US levels of female entrepreneurship they could potentially add £23 billion gross value add to their economy.

What the data in this Women unbound report shows clearly is that when women choose to access crowdfunding they are more than capable – and very often more capable than men. Thanks to crowdfunding, female entrepreneurs can now access the market directly – and this makes a huge difference because when they do, female crowdfunders are 32% more successful than their male counterparts.

The report analysed data from over 450,000 seed crowdfunding campaigns, from nine of the largest crowdfunding platforms globally over a two year period.

What the analysis told us is that men clearly crowdfund more than women, 72% of crowdfunders globally were male compared with 28% who were women. Yet, globally, women are more successful at crowdfunding than men: 22% of campaigns led by a women reached their target, compared to 17% of those led by men. And this is not a collective anomaly, women-led campaigns performed better (in terms of securing their funding goals) than campaigns led by men when we segregated the data for every sector and every territory.

Even in what are considered more masculine sectors, for example technology where just one in every ten crowdfunders is female, 13% of women were successful in achieving their funding goal compared to just 10% of men.

So despite their clear underrepresentation, women are more successful at crowdfunding than men. But why is this?

The main factor seems to be because crowdfunding attracts, enables and empowers far more female decision makers as project backers. In essence, just like the dominance of male representation in traditional financing channels can create barriers for women, the more gender-level playing field of the crowd provides one explanation for why women are more likely to succeed at crowdfunding than men.

Female crowdfunders also tend to use more emotional and inclusive language in their videos and pitch descriptions than men.  This language is more appealing both to female and to male backers and positively correlated to funding success. While the use of business language, the style typically favoured by male crowdfunders, has been shown to be negatively correlated with money raised irrespective of what product or service is being pitched.

Yet, while women are outperforming men in achieving their funding targets across the board, the fact remains that significantly more men are crowdfunding than women, and as result, men raise substantially more finance via this channel. Men are also more ambitious in establishing higher funding goals than their female counterparts and we see them dominate in the highest funded campaigns by sector.

In fact, while there were 63 campaigns that raised over $1 million, only seven of these were led by women (11%), with the most funded campaign created by a woman placing number 18 on the list. However, progress is being made, 2014 data illustrates that only 7% of campaigns raising over $1million were led by women, and the most funded campaign created by a woman placed 37 on the list. On another positive note, on average female-led campaigns receive 5% more per individual pledge globally than male-led campaigns.

Despite this, significant opportunity still remains for women to become more active and represented in crowdfunding and to be more ambitious when establishing their finance raising goals.

I truly hope that the success of female crowdfunders highlighted in this report inspires and motivates more budding and established female entrepreneurs to explore crowdfunding.

Overall, the findings of our Women unbound report pose a strong challenge to existing entrepreneurial and business norms by seriously questioning whether there are deep-rooted biases that are preventing greater access to funding  by female entrepreneurs. It is extremely positive to see that the growth and global reach of seed crowdfunding presents several major opportunities, each with the potential for major social and economic impact. Including the understanding and acceptance that seed crowdfunding is now a well-established environment through which women can thrive.

Learn more about these opportunities by reading our Women unbound report or visit our data explorer to check out the geographical and sector crowdfunding trends for yourself

Contributed by Aoife Flood. Based in Dublin, Ireland, Aoife is Senior Manager of the Global Diversity and Inclusion Programme Office at PricewaterhouseCoopers International Limited. A version of this op-ed was originally published in PwC’s Gender Agenda Blog. 

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Is It Possible to Be an Entrepreneur within a Corporate Structure?

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Business meeting with women and menGuest Contributed by Meg Schmitz

At some point in everyone’s career we begin to take inventory of what want in a job, what we seek for our professional growth and what brings us joy. In an ideal world, we’d all have jobs that don’t feel like work, pull a huge paycheck and allow us to achieve our goals. However, the reality is that many people, for reasons often beyond their control, leave work every day feeling unfulfilled – often, this is due to underutilizing a key skill set or feeling that potential is being left untapped.

For individuals who are drawn to entrepreneurship but don’t yet own a business, there’s a middle ground – the less-talked-about intrapreneurship. In a nutshell, intrapreneurs bring the entrepreneurial spirit to their corporate structure. This translates to freedom of thought, out-of-the-box problem solving, flexible brainstorming and long-range thinking that can be lost in the day-to-day grind. Intrapreneurs have the advantage of paycheck security and other benefits, all while being able to explore new avenues to sell a product or service in a role they already have familiarity with.

Another important component of intrapreneurship is the level of focus that intrapreneurs possess. An entrepreneur should view his or her company as a vision from starting point to end, but an intrapreneur works within the company to focus directly on a specific problem. Intrapreneurs, therefore, should have more directly applicable skills for a specific task. An intrapreneur takes risks, but those risks fall within the context of his or her job in the existing company. So, rather than focusing on the whole company, intrapreneurs hone in on the processes within it.

In this same vein, intrapreneurs are the primary forces of innovation within their companies. Like entrepreneurs, they look to provide solutions to unique, often market-driven problems. They focus on policies, technologies and applications that solve a specific problem, often resulting in productivity issues. In the same way that an entrepreneur starts a company to provide a service or product, an intrapreneur takes on a task within the company to strengthen it as a whole.

This sounds great, right? Somehow being able to balance your entrepreneurial ambitions with job security? Well, it’s not that easy – the first step is finding a company that’s open to intrapreneurs and their big ideas. When you’re looking for a job, make a point to find a corporate culture that supports your innovation, and actively interview for a culture that matches your values, goals and personality. Flexibility should be encouraged instead of suppressed, and the company should be comfortable with out-of-the-box thinking. It’s also worth considering exploring if the company has the budget – and internal capacity – to make the changes you might bring. Flexibility is key, but the space for implementation of your new ideas is what will actually allow intrapreneurs to fully realize their ideas.

What do intrapreneurs look like? They’re often independent, willingly autonomous individuals who like to thoroughly investigate every facet of a problem they’re presented with. They don’t respond well to micromanagement as they feel it stifles the experimental and creative processes. They’re free thinkers, but appreciate the overarching structure of a company that they feel aligns well with their values, goals and career direction. They’re the building blocks of their company’s executive teams and are a driving force behind innovation and forward motion.

If you see yourself in the description of an intrapreneur, you’re not alone – women make great intrapreneurs. We’re better equipped to challenge the status quo – we’ve been doing it as long as we’ve been alive! Fighting is in our blood, and we have great ideas that are well thought out and adaptable. Young women, in particular, have shown increasingly entrepreneurial ambitions, but many lack the experience or resources to pursue their own business at this time – however, entrepreneurially minded women may find that bringing a spirit of intrapreneurship to their corporate jobs gets them quite far. In fact, most businesses celebrate having women in higher-level positions, so why not harness this positive energy and look at ways to challenge the status quo further with big ideas, long-range thinking and out-of-the-box problem solving?

Meg Schmitz is an independent consultant of FranChoice based in Morton Grove, Ill. Her free services aid individuals along their path to professional independence, while developing a plan to achieve personal lifestyle goals through franchise investments. Contact Meg at MegSchmitz@FranChoice.com.

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Op Ed: Lawyer turned entrepreneur: Why I decided to bring sports to the casual fan or novice

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baseball field with players playing a game featuredThree years ago, I found myself attending at a charity business development dinner with several partners and the chairman of my law firm. The event had been sponsored by one of the firm’s big sports clients and I was invited to attend, because a few months earlier, I was assigned to a big case representing Major League Baseball. The next thing I knew, I was seated across from Billie Jean King at dinner. To my right, Kareem Abdul Jabaar and Bill Walton were chatting at the next table.

I should have been utterly star-struck, but there was one big problem. I knew virtually nothing about sports. These were some of the most impressive athletes of our time, and yet the experience was somewhat lost on me. Like so many other occasions, I found myself making small talk throughout dinner, but falling uncomfortably silent whenever the conversation turned to sports.

It wasn’t that I wasn’t interested in sports or consciously didn’t want to participate. Sports were just something that I had never grown up watching. By the time I got to law school at Michigan and football was such a huge part of the culture, I felt out of the loop and far behind many of my other classmates, who had grown up watching the game. I resigned myself to a lifetime of knowing nothing about sports.

But by a twist of fate, I was put on this baseball case at the law firm and I decided that I wanted to be proactive and do something about my sports obliviousness. I began following a couple teams and really getting to know a few players. Suddenly, with my additional knowledge, I felt empowered and it made watching the games fun and enjoyable. Sports were moving from something that had always left me feeling alienated to something that I genuinely enjoyed as a new pass-time.

Even though my case was a bit extreme, because sports-knowledge was nearly a requirement of my job, I found from speaking with friends and colleagues that this feeling of alienation is a common experience for many people who don’t follow sports, especially young professional women.

A 2015 Gallup Poll shows that there is a tangible gender gap in sports fandom with 76% of men earning over $75,000 describing themselves as sports fans, whereas only 56% of similarly high-income women would describe themselves as such. This difference, combined with the fact that only 14% of top executives are women, means that more often than not, ambitious young women are interfacing with men at the top of their companies. And not only that, they are competing with young male colleagues, who may be able to more easily form relationships with their bosses. While I do not think there is anything insidious going on, male associates may be able to more quickly able to form bonds with male bosses because of common interests, in part–sports. This scenario plays out in interactions with interviewers, clients, and colleagues as well.

I can speak from personal experience. Beyond working for MLB, I was frequently surrounded by colleagues chatting about sports. In my class of 20 litigation associates, only 3 were women. The gender breakdown amongst the partnership was similarly stark. At department lunches and firm events, it was often inevitable that the conversation would move beyond idle chitchat about the weather to the latest sports news.

This is not to suggest that women should have to feign interest in sports if they have none. But I think that there are many people, who like me, wanted to learn more but felt intimidated and didn’t know where to know where to start.

When I decided to try and learn more about sports, I found the experience frustrating because there were few resources for sports novices. There were plenty of media outlets for avid sports fans, but nothing that helped break things down and provide context for someone who was just getting started. I thought there was a gap in the marketplace for a product that could help someone develop more sports knowledge in a fun and accessible way.

This idea stuck with me, and just this year I decided to start Goalposte, a daily newsletter that summarizes the major stories in sports, while providing context and primers. In particular, Goalposte’s mission is to help level the playing field for young professional women, who are more likely to feel alienated in sports conversations with coworkers, bosses, interviewers, and clients. I hope that this simple daily newsletter will make it easier to cultivate a genuine interest in sports and that there will fewer women in the workplace who have to sit on the outside looking in when the conversation turns to sports.

About the Author:

Jane Wu Brower is the Founder and CEO of Goalposte, a daily newsletter that summarizes the major stories in sports in a fun and accessible way for casual sports fans and novices (www.goalposte.com). She was formerly a management consultant for the Boston Consulting Group and a litigation associate at Proskauer Rose LLP.

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