Here's one door that's always open to budding entrepreneurs -- as long as they are women! Over the past few years Golden Seeds, a rare angel investor group devoted exclusively to funding women-led and owned businesses, has poured more than $16 million into 26 companies. These select companies represent a small fraction of the more than 1000 companies that have submitted business plans and the 300 entrepreneurs who have presented at the group's monthly forum, a yield rate typical for angel investors and venture capitalists. The investment mission is simple: to champion women investors and women entrepreneurs because of a core belief that both men and women in management and in the boardroom together make better decisions and produce superior results.
What's unique about the group is that most of the 130 members, who invest, individually or through a fund, not only provide capital to the fledgling companies but eagerly share their expertise from their own experience as company founders or business executives. They work very closely with start-ups to develop the management, strengthen marketing, share networks, and usually take board positions.
Recently, the former CEO of Gymboree added her marketing suggestions to an environmental diaper company in which Golden Seeds is invested. Another Golden Seeds member, a medical doctor, joined the board of a company which came to Golden Seeds to finance a company currently testing a less toxic version of a cancer drug; she has since suggested a new application of their technology which has greatly expanded the company's outreach. And a former executive vice president at American Express has worked closely to develop a management team to support the CEO of a customer purchase behavior service company, currently in the funding pipeline.
Golden Seeds was founded five years ago by Stephanie Hanbury-Brown, who after 20 years on Wall St., primarily at JP Morgan, had a vision for a second career. Having watched women struggle to reach the top levels in large corporations and fund their business ventures; she wanted to start an organization to invite women who had already made it to the top in the business world to create an environment to help young women entrepreneurs succeed. Today, Golden Seeds has three managing partners and a network of over 120 members, including both women and men, with offices in New York, San Francisco, Boston and Philadelphia.
These seasoned business executives provide women with access to capital when it's impossible to get bank loans and before larger venture capital firms might become interested. Golden Seeds requires women hold a significant (but not majority) equity position in the company. In many investments, a woman is a founder of the company as well. Other criteria include a sizable target market, at least one or two major customers in place, and a clear exit strategy. The focus is three sectors: consumer products, life sciences and internet business. Stephanie Hanbury-Brown always asks entrepreneurs, who make 15 minute presentations before assembled members once a month, to explain "how you can solve a big problem that other companies are not solving and then tell us specifically how you think you can grow." If members decide to go ahead, after the monthly presentations, a deal team is created by member volunteers who then delve more deeply into the company for as long as a few months before deciding whether or not to recommend funding. Golden Seeds also syndicates deals to include outside angel investor or venture capitalists from around the country.
One Golden Seeds entrepreneur is Angela Kennedy, CEO of Carnegie Speech, a software company that provides spoken language assessment and training in critical areas, such as national security and aviation markets among others. Besides providing her with two rounds of funding, Ms. Kennedy says Golden Seeds members:
...have offered tremendous expertise and networks which they know how to leverage, plus they are always willing to roll up their sleeves and help with funding, marketing, messaging or whatever we need. They also have introduced us to investors nationally. Entrepreneurs are always seeking smart money, and that's what Golden Seeds offers.
Interested investors and women entrepreneurs, we'd love to hear your stories, challenges and successes. You can find applications and investment criteria at the Golden Seeds website: www.goldenseeds.org. Check back here for more stories of successful businesses and how they got there.