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Jul 30, 11:20 pm: [BlogHerCon] Women Who Buy Build and Fund things
Presenters:
- Mary Hodder (napsterization)
- Denise Howell
- Patricia Nakache
Mary Hodder:
- starting a company and in the angel investory phase
- people have seen my blog (over time) and it’s helped me get credibility when I go out to get funding.
- 2 pager to describe company
- 1 page spreadsheet to describe revenue model (dev’d by someone who really knows the form
- blog creates a credibility feedback loop
- when she goes to ask for funding, she starts by asking for advice
- divided funders into buckets—people who, if names were associated with technology, would really help her company; certain names really matter in the particular space that she’s in. Must choose well.
- getting connections with people can allow them to carry your introduction out there
Denise Howell:
- lawyer with Reed, Smith
- help to think about how funding happens and how medium of blogging can help support that
Patricia Nakache
- trinity ventures, classic tech venture firm
- focus on biz and consumer services (especially as leveraged by technology)
- venture funding is not for everyone
from the room: what’s the difference between angel and investor funding
- angel: from an individual, comes from a personal account; motivations can include making money but their motivations can be different
- venture: is institutional; sole person of achieving a financial return; have specific financial goals
Mary:
- her two documents wouldn’t be enough for a venture capitalist; more requirements there that they can see a return. Her angel investors are based on a conversation and credibility; very informal.
- amounts at angel level: $350K
- at later rounds, would rather do larger because a vc does the same diligence for a larger investment as for a smaller investment
Patricia:
- Vcs very involved—take board seats etc—they spend a lot of time with their investments and so that means only a handful of investments per year
- angel round: good way to get venture off the ground; in $100Ks; venture in $2-3mil
from the room: do angels get paid back?
Patricia:
- yes. like ventures they take a partial ownership in the company.
- mulitple rounds of financing; for each round a new lead investor is sought to set the marketplace; existing investors participate; for each round you are giving up a portion of your company
- typical series A round $4-5million and gives up 30-50% in that round
discussion in the room about whether or not venture cap is a good thing; what happens when you get kicked out of your company or if the company makes $ but the only people who see a return are the investors
Denise:
- post-bubble funding phenom.; get more done with fewer $
- one of the benefits of that is to end up keeping control of more of your own company
Mary:
- what her company is building takes 5x less money than it did 5 years ago
- taking $ is a part of building a community of funders
- have to agree with the valuation (how much it’s worth to you and how much it’s worth to the funders)
- create enough valuable stuff to keep control; balance taking new money with building new/more valuation (the stuff that makes you the money)
from the room:
- today can bootstrap
- some consulting $ can feed into the product (keeping more $ in house); keeps you from going to any venture cap folks at all
- example of basecamp
from the room:
- what if you biz isn’t technology? interested in publishing. what about other company types? Where is the money to help women get money for their (non-tech) companies?
Mary:
- finding that there is a range of interest from venture caps (finding interest in media, etc)
- you have to do your homework by looking at the funding already done by a variety of vc firms
Patricia:
- where’s the $ for women; 2003 only 4.5% of firms that got venture funding were led by women
- doing the homework on the vc is dead on
- often a tech component to some of the funding choices but that it might not be the primary deal with the company
from the room:
- not just about getting the funding; it’s also about finding the mentors
Denise:
- interesting point in the economy; ton of money out there waiting to be invested
- but many existing Vcs aren’t taking more companies
- that means that it might be a great opportunity to bring new people (and ideas) into the marketplace
Mary:
- her experience is that this is a great time to be a woman trying to get tech dollars
from the room:
- other ways to build this; social enterprise for example
from the room:
- pitch has to include what’s the return for the investor? rather than I deserve investors.
- is there a difference in pitches from men/women? one better? mentoring resources for women?
Mary:
- “in the beginning, I was terrified of asking for money;” strange to talk about how much money you need and asking for advice
Patricia:
- hate to generalize maybe a tendency for women to sell less; selling is important when you are pitching; selling yourself and your idea; not be bashful about selling and promoting yourself and your idea
- on average, women are more comfortable making this a conversation. vc are used to getting their information in .ppt; that’s their language; helps to keep you on track and get your point across
from the room:
- looking for an angel; how do I find that outside of my own network and friends and family? who are the people with the $ and would be interested? How do I find them?
Mary:
- figure out what other similar companies did to get their $; who were their funders or founders and then go and talk with those folks
- use the network that you know and then work that
- go out and look for some other folks
- ask someone to be on an advisory board and ask them to get you introductions and give them a few shares for their time, advice and introductions
- secret weapon: get a team of advisors that you don’t want associated with your competitors
from the room:
- women have a lot of strengths; woman have most of the power re: consumer expenditures
from the room:
- people, soft, sensitivity, web 2.0
from the room:
- advisory shares are off: put the advisors on a vesting schedule and if they aren’t working for you fire them
from the room:
- what are the requirements of angels?
from the room:
- who are these investors? name them?
Mary:
- don’t want to say it to a bunch of live bloggers but will answer the question in email
Patricia:
- band of angels, east bay angels
- $100 million in liquid assets is what is required to make an angel investment
Denise:
- folks are looking for how they are going to connect, blog is the message, if you are out there with an idea it will take you really, really far. Got to get your ideas out there
- building on top of open source infrastructure helps you develop a biz in a low cost manner (keep you moving ahead with a minimum of funding)
