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Lynn-Ann Gries

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How Women Entrepreneurs Succeed in the Midwest

Posted: 01/15/2013 12:20 pm

Lately, it seems like women tech entrepreneurs and their companies have a higher profile than ever. Yahoo hiring new President and CEO Marissa Mayer away from Google was consistently one of 2012's top news stories. Avis recently acquired Zipcar, the short-term car rental business co-founded by Robin Chase, for $491 million, while Google snapped up social media marketing software provider Wildfire, co-founded by Victoria Ransom. Companies founded by women -- everything from online ticketing service EventBrite to women-geared financial planning platform LearnVest -- are infiltrating (if not dominating at times) tech lists. Check out Mashable's "44 Female Founders Every Entrepreneur Should Know."

According to a June 2012 Forbes article, "Women have been starting businesses at a higher rate than men for the last 20 years and . . . will create over half of the 9.72 million new small business jobs expected to be created by 2018." The increasing success of high growth tech companies such as TaskRabbit (an app/website to hire reliable people for odd jobs) and Lockerz (online photo sharing/e-commerce) -- and as the fact that in 2009, "17 of 19 high-tech IPOs had at least one female officer" -- takes these overall positive trends in female small business ownership to the next level.

Don't get me wrong, this group still face many hurdles: a disproportionate lack of capital, a dearth of women starting scalable companies and still, relatively few women in leadership positions. Still, if the increasing pool of strong female founders I'm seeing here in the Midwest is any indication, there's cause to feel optimistic about the ability of women to be even bigger players in high growth entrepreneurship in the not-so-distant future -- and it's a byproduct of several things.

  • Networking Opportunities
    In many Midwest cities, women entrepreneurs have recognized the value in working together to share information and tips, and offer support and advice. Four St. Louis women, seeing a dearth of female entrepreneurs at networking events, recently banded together to create a new business networking group, Women Entrepreneurs of St. Louis (WEST). In the Cleveland area, Laura Bennett, the CEO and Founder of Embrace Pet Insurance, formed a mentoring community for female entrepreneurs leading high-growth-potential companies, called the Burning River Coffee Community. "I feel there is a place for a community to mentor women to build our numbers," Bennett says. "Women are no less driven, focused and capable of running high growth companies than men; there just aren't many examples to look to. The BRCC is another way to encourage and support women in building these companies."
  • Women-Geared Financial Support And Resources
    Funding continues to be one of the biggest hurdles for female entrepreneurs -- in 2009, of the 21 percent who pursued angel capital, only 9.4 percent were successful -- despite the fact that, as the Harvard Business Review notes, "women entrepreneurs bring in 20 percent more revenue with 50 percent less money invested." To help bridge that gap, the nonprofit Springboard Enterprises offers women-specific programs and resources- including accelerators, education sessions and venture forums -- in many cities, with the goal of fostering women entrepreneurship and helping these innovators attract capital.

    "[Participating in Springboard's LifeScience Venture Forums] was a terrific opportunity for me to network with female entrepreneurs, both first time CEOs and more experienced CEOs," says Maria Bennett, CEO of SPR Therapeutics, a Cleveland-based medical device company that recently raised $5 million in Series A financing to commercialize pain therapies based on its nerve stimulation technology. "Now it's a family. I'm able to reach out to the members of Springboard -- whether they're alums of Springboard or they're actually people that are working there -- and they offer different opportunities to me, whether it's fundraising or getting in touch with others."

    There's also Ohio-based organizations such as Bad Girl Ventures -- a non-profit offering classes, networking opportunities and low-interest loans to female entrepreneurs in Cleveland and Cincinnati -- and the woman-started (and -friendly) SoMoLend, a locally-focused investment portal for small businesses, help fund the state's most promising women. Women helping other women creates quite an impressive domino effect: That same HBR piece cites a Kauffman Foundation study which observed "70 percent of women venture capitalists were in partnerships that had closed deals with women-led companies."

  • Patience
    The Midwest's startup ecosystem is in the midst of a slow-but-steady growth that should result in a big payoff down the line. In a similar sense, the same is true for women tech entrepreneurs. Proportionately, they have a lot farther to go to catch up with men in the startup space: As Fortune noted last summer, "Though women hold over one-third of the jobs in the tech space, less than 10 percent of venture-backed companies have women co-founders." The more women network and cooperate, the more a critical mass forms. It won't happen overnight, of course, but give it time and progress will happen.
  • Plenty of Role Models
    When Cleveland entrepreneur Lindsay Sims -- a recent recipient of a $25,000 Bad Girl Ventures loan -- decided to start her socially integrated leasing company, Renter's BOOM, she approached Embrace Pet Insurance's Laura Bennett for advice. The reason? Bennett's reputation preceded her. "I'd heard about her and Embrace Pet Insurance," says Lindsay. "At the time, I was toying with the idea of starting a business and I was impressed at the fact that a woman was making such a huge splash in the Cleveland funding community."

    Northeast Ohio's health care community as well has plenty of established women entrepreneurs in charge in addition to Maria Bennett. One of the more notable faces is Dr. Charu Ramanathan, Founder & Chief Scientific Officer of CardioInsight, the developer of non-invasive electrocardiographic mapping technology, which closed a $7.5 million Series C financing round last year. Regardless of sector, as more high-profile women attract capital and become successful, they inspire more women to take the entrepreneurship leap and follow in their footsteps.

It's important to remember, however, that the goal of any of these initiatives is not to create startup communities with women in one silo and men in another. Instead, doing women-specific outreach and forming women-only programs is done with the idea of giving them the tools they need to become integrated into the community. Creating a diverse entrepreneurial ecosystem is the most effective way to enact positive change in a community -- and it only makes sense that women should be at the forefront of any development efforts.

 

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