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.
