Women-led companies receive only about 7 percent of all venture capital funding.
When a report came out of Harvard Business School last year with that statistic among its findings, Rad Campaign's Allyson Kapin and Craigslist founder Craig Newmark set out to make a change in how female founders were regarded by investors.
"It's about fairness, about treating people like you want to be treated," Newmark says. "Since I'm in tech, it seems natural to do things this way."
The Women Startup Challenge, to be held November 9 in Microsoft's offices in Times Square, is the second in a series of pitch competitions led by Women Who Tech (run by Kapin), in cooperation with Newmark and craigconnects.
"The Women Startup Challenge is shaking up a culture and economy that has made it exceedingly difficult for women entrepreneurs to access capital," Kapin says. "If we truly want to innovate and create the best products for people in this world, we need to radically change how we invest."
The winner of the first competition, held last summer in Washington, D.C., was On Second Thought, a digital reputation protection platform and ecosystem "that protects the reputations of individuals via mobile application technology." Basically, it allows you to take back texts, chat messages, emails, and other communications before they get to the recipient. AT&T named the application "The Texting Savior."
Even before the $50,000 and additional rewards On Second Thought received for winning, founder Maci Peterson realized the competition had quite literally saved her company.
An expected investment of $50,000 had fallen through at the last minute. Peterson had to borrow money from her brother and a friend and return her salary in order to keep the company afloat. She checked her email and saw the message from Women Who Tech about the competition, which was kicked off with a crowdfunding campaign by companies interested in pitching.
Peterson went all in. She called, texted, and emailed virtually everyone she'd communicated with for the past six years and came up with more than $6,000 in the crowdfunding campaign--enough to repay both loans and take her salary again, which meant she wouldn't be evicted.
In her crowdfunding efforts, she interested two other investors, and a couple days after the campaign ended, she signed them both for $25,000 apiece.
Instead of everything hinging on a wing and a prayer, she went into the competition knowing that even if she didn't win, her company would continue. Though she suffered a vicious migraine as she was presenting, she wowed the judges and claimed first place, winning the $50,000.
She took the prize money and put it toward development and marketing for the app's iPhone version. She's been able to hire a full-time developer for Android and a full-time developer for iPhone, as well as a back-end engineer and someone to run social-media marketing for the company. "That's huge in terms of the rapid growth and expansion for our company," she says.
"Miracles and blessings come in the most surprising and unknown ways," she says. "Who knew that the answer to my prayer was sitting in my inbox?"
Judges for next Monday's event (held from 6 to 9 p.m. at Microsoft Times Square) are: Susan Lyne, president of BBG Ventures, a venture fund for women-led tech startups; Joanne Wilson, an active angel investor and a fixture of New York City's tech community; Kathryn Finney, founder and managing director of digitalundivided (DID), a social enterprise that finds, supports, and trains urban tech entrepreneurs; Victoria Song, a VC at Flybridge and founder and CEO of So She Did; and Lisa Stone, co-founder of BlogHer and chief community officer at SheKnows Media. (Several other judges helped winnow down the field to the existing 10 finalists.)
"I gravitate towards smart, scrappy, tenacious founders who are building companies that speak to me," Wilson says. "Events that highlight women's business are important.
"Exposing everyone who is looking at the tech community to women founders is the key to getting more women funded," she adds. "Events like this will make an impact over time, with the hope that will see more women have companies go public, be bought, become household names. And that is impactful for the next generation of men and girls coming up the pike."
The finalists you'll see pitching Nov. 9:
- Closet Collective: The "Airbnb of fashion," enabling women to rent designer fashion from each other.
- GoKid: A carpool solution that aims to benefit not only the families that use it, but also the communities they live in.
- HeyU: A video-dating app that also allows users to connect with dating coaches and other resources.
- LIA Diagnostics: The first flushable pregnancy test.
- Rubitection: A low-cost and reliable tool for early bedsore diagnosis.
- Siren: Wearable tech that has a powerful, wearer-activated 110-plus decibel alarm and rechargeable power supply.
- SoftSpot by Moonlab: SoftSpot is a plug-and-play sensor system for clothing, capturing and sending the data to mobile phones or other IoT devices.
- StyleSage: Fashion meets big data, with actionable insights for brands and retailers.
- UpScored: Data science comes to recruiting, matching candidates with the right opportunities.
- Vizalytics: Using open-government data to provide insights for businesses, residents, and governmental agencies.
The grand prize winner in the New York competition will walk away with $25,000 cash, three months of office space overlooking the city at Silver Suites Offices, consulting help from Invisu, and other useful services. All 10 will have the chance to participate in Startup Speed-Dating with high-profile mentors at AOL the next day.
Note: As someone involved in the NYC tech community, I am a volunteer member of the event's Host Committee.
Corrections & amplifications: An earlier version of this story incorrectly listed Victoria Song's past work history. She is the founder and CEO of So She Did.