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.
Instead, Roberts joined Sevin Rosen in 1994 and used her insider status to help Brosseau enroll 1,000 members -- including a smattering of men -- dedicated to supporting women in business. "I love to hook people together, to encourage connections and build a community," says Brosseau. Those thus hooked range from first-time CEOs to powerhouse VCs like Hummer Winblad Venture Partners' cofounder Ann Winblad, who recently invested in a start-up she discovered through the Forum. Brosseau also has garnered financial and other support from heavyweights like Microsoft, SoftBank, and Kleiner Perkins Caufield and Byers. Members do much of their networking through a private E-mail list, posting requests for fund-raising advice and seeking introductions to lawyers and accountants, angels and VCs.
Valerie Buckingham joined the Forum in February and four months later was closing in on a first round of $750,000 for Meconomy Inc., a privacy-protection start-up. "I got direct referrals that got me in front of venture capitalists," she says, referring to contacts made through both the organization's staff and its members. The first-time CEO also availed herself of the Forum's seminar series featuring the wit and wisdom of Bay Area VCs and other experts in structuring early-stage investments, negotiating term sheets, and presenting to people like themselves.
Male entrepreneurs care about this stuff too, of course. But while the Forum's lessons are gender-neutral, the approach is targeted. "Women network differently. They seek to be more collaborative and less competitive," Roberts says. "You can see that on the E-mail list and in the meetings. People go out of their way to help each other."
The success of organizations like the Forum depends on the existence of like-minded investors. More women are getting VC money because more venture funds -- many with female principals -- are targeting start-ups whose founders are women. Along the way, those funds are both exposing their CEOs to a broad array of investors and introducing investors to funding opportunities that they might otherwise have missed.
Back in 1994, when Sona Wang began soliciting institutional investors for the first venture fund targeting women who are entrepreneurs, the Wall Street Journal reported that fewer than a dozen female entrepreneurs nationwide had landed $1 million in venture capital. No wonder that Wang's idea for Inroads Capital was "perceived as risky," she says. "We knew it was risky."
Managers of venture funds targeting women stress that they're not interested in special-needs cases.
