A Network of Her Own

Promoting women's participation in the economy became Muther's end; securing their access to capital her means. She returned to the United States and spent the next two years and $2 million of her own money establishing the Women's Technology Cluster, located on the industrial side of San Francisco's Potrero Hill. Aided by incubator maven Jim Robbins (the brains behind Silicon Valley's first trio of company cookers), Muther created not a separate, women-only network but rather a system for ushering women into the larger venture landscape. "By emphasizing just a little bit of gender equality" in venture financing, Muther predicts, "we will ultimately end up with a bell-shaped curve."

What Muther witnessed in Bangladesh inspired her also to build into her business model a unique give-back component: every incubated company pledges 2% equity to a fund that she hopes will grow in value. "Right now, it's primarily a portfolio of warrants," Muther explains. "Over time there will be liquidity events, and we will create a store of wealth to reinvest in the community." That money, she hopes, will not just sustain the Cluster but also assist female entrepreneurs outside the incubator.

For start-ups, 2% may sound steep, but Cluster CEOs say it's worth it. Through the incubator, CEOs are matched with well-connected mentors and advisers who guide them through the start-up and funding process. They are also plugged into Muther's vast personal network, whose nodes include angel investors, VCs, lawyers, accountants, and other professional contacts from her years at Cisco and 3Com.

Catherine Muther created not a separate, women-only network but rather a system for ushering women into the larger venture landscape.

Cluster members laud the internal networking opportunities as well. At a regular weekly meeting of Cluster CEOs, for example, Gina Johnson confides that she is struggling to find a lead investor for a much-needed capital infusion for RosePlace.com, a Web-based business dealing with senior care. Later, CEOs of more-advanced-stage companies introduce her to their own investors. "We all share contacts," says Johnson, who joined the Technology Cluster from another, more traditional incubator last winter. "And the deeper I get into this industry and the whole funding process, the more I realize that those contacts are everything." Others are apparently finding the same thing: at the Cluster's anniversary, Muther announced that its first 10 start-ups had raised a total of $18 million in equity investments.

Of course you can fit only so many eggs into one incubator, and there are thousands of women-run start-ups that could profit from Muther's nurture. Fortunately there are other organizations that -- while stopping short of incubation -- offer similar services by opening their own networks to entrepreneurs and acting as prep schools in fund-raising. Much of that schooling entails emboldening women in their investment pursuits. "We see very clear patterns in how women approach equity investments," says Andrea Silbert, CEO of the Center for Women and Enterprise, in Boston, which since 1998 has helped 100 local entrepreneurs seek equity funding. "They're not as aggressive as men in the amount they ask for, and they're reluctant to put their friends' and families' money at risk."

"There's a profile in the venture world of what a successful entrepreneur looks like," agrees Jennifer Gill Roberts, a general partner in the Palo Alto, Calif., office of Dallas-based Sevin Rosen Funds. "It's someone who's aggressive, very competitive, and hard-driving. A lot of those are typical male characteristics. A woman may have all those qualities, but the way she demonstrates them may be very different. So what you'll hear from VCs is, 'She doesn't have the characteristics we're looking for in a CEO.'" Through workshops and one-on-one coaching, groups like the Center for Women and Enterprise help women who are entrepreneurs present themselves and their businesses as investment worthy.

But most important, those organizations, like Muther's incubator, are portals to a network. Silbert and her colleagues, for example, boast a filigree of powerful connections that includes the Boston angel group Renaissance Ventures. Then there's the Forum for Women Entrepreneurs, founded by Roberts and Brosseau when they were students at Stanford's Graduate School of Business. The year was 1993, and "you could count the women VCs and women CEOs on one hand," Roberts recalls. The two envisioned creating a venture fund to provide women with pre-seed-stage money.

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