Concrete Steps for Advancing Diversity in the Women’s Startup Ecosystem

Jackie & Lili

On April 28, 2016, we held a Hera Fund Wingpact Founder Funder Conversation, with the topic of, “Diversity in Women’s Entrepreneurship and Investing.” We were led by special guests Jackie Gutierrez, Founder and CEO of Cloud & Clover, and Lilibeth Gangas, Co-Founder of Somos ChangeMakers and Startup Digest Curator at TechStars.

Our conversation was rich, open, multi-dimensional, and inspiring. This article highlights the most concrete takeaways contributed by the very wise women gathered. View the entire conversation to experience the full depth of the session.

Network Network Network

Latina entrepreneurs often have limited access to the networks they need to build businesses and get funding. Jackie Gutierrez has focused intensely on building a network for herself. She was one of the first cohorts of entrepreneurs at the Manos Accelerator, a startup accelerator in Silicon Valley that focuses on supporting Latin American entrepreneurs. For Jackie, “the world opened up” through Manos.

Women’s professional groups are great places to network and connect with women who are professional, accomplished, and may be angel investors. In Phoenix, where Jackie is based, she participates in Ellevate Network. Jackie encourages entrepreneurs to build relationships with and find mentors who are angel investors, because this has helped her understand the investor view on business, which further helps build relationships that will eventually lead to funding opportunities.

It is often difficult for women with limited access to networks to find technical co-founders. Jackie shared a solution she developed – attending hackathons and coding meetups to establish relationships with technical people. As a bonus, through these events, she has herself gained understanding of technology needed to support her business. Silvia Mah of Hera Fund suggests organizations like Geek Girl and Girl Develop It to find female technical talent.

Accelerator Access

Remy Meraz, Founder and CEO of Me Tyme Network, told us, “Hera Labs was life-changing in one day!” Remy has deep experience and connections in the Latina business community. She emphasizes that the “struggle is real,” and there is a knowledge and language gap. People know there are resources to support them in building their businesses, but they need encouragement to apply to programs and they need scholarships. Also, knowledge around scalable business is limited – businesswomen often have high-potential scalable businesses without knowing it, and they keep their businesses small and local. Getting to an accelerator program could transform these women entrepreneurs and build the local and global economy.

Startup accelerators are often inaccessible to moms, because of the requirement that participants be away from their families for weeks or months at a time. We need more “virtual” accelerators for women.

Raise Awareness

Even while women’s entrepreneurship is exploding, only 10% of VC-funded startups have a woman as one of their founders. When we look at how many of these founders are women of color, it accounts for less than 1% of VC-backed companies. Most of these <1% are black women, so the number of Latinas getting VC funding is so small that it is statistically immeasurable. Lilibeth Gangas emphasized that even with all the current talk about diversity, there is still a great need to raise awareness of the realities. Please look to the end of this article for an extensive and fascinating list of articles and resources that Lilibeth gathered to help raise awareness.

Build Diversity throughout the Investing Pipeline

One solution for funding underrepresented entrepreneurs is to activate more angel investors. That is exactly what Tatyana Gray is doing with AngelInvestingPodcast.com. For angels looking to enter the venture capital world by raising a fund, Tatyana suggest an intermediate step of leading a syndicate.

Diversity from Day One

Startup founders need to integrate diversity into all aspects of their business from the very beginning. Too often, entrepreneurs are in survival mode and think they will address the diversity issue “later.” However, by the time a company has some stability, the business culture is established, and usually broken from a diversity perspective. Think from the very first day about how to integrate diverse groups into your business model, customers, the problems you are solving, how you reach out to stakeholders, hiring, and mentorship.

Skin In the Game

Often, investors assess how committed an entrepreneur is to her own company by looking at how much money she has invested. But for entrepreneurs of color, there needs to be a different kind of assessment of the founder’s risk. If an entrepreneur is raising children, or is supporting distant family, her risk is higher than someone with fewer responsibilities for others. Overall personal risk should be considered by investors, beyond absolute dollar amount contributed.

Executive Summary/Takeaways:

Here is a summary of the actions suggested in this roundtable. These are things we can all do, individually and collectively, to open opportunity to all entrepreneurs.

  • Underrepresented entrepreneurs need more access to accelerators. Kudos to Hera Labs and Manos Accelerator – you are making a huge difference in the lives of your entrepreneurs!
  • Entrepreneurs can do a lot of networking to access resources, including professional women’s organizations and tech meet-ups.
  • Build bridges between accelerator programs and business communities, including scholarships.
  • Continue to raise awareness of realities for underrepresented entrepreneurs.
  • Activate more investors.
  • Build diversity into companies from the beginning.
  • Investors must assess founders’ risk and commitment holistically.

Hard to believe we came up with all of that in only one hour! Let’s keep working on the micro level, helping each other and the girls we know, as well as the macro level, holding events and discussions like these.

Next Steps

View the entire conversation to experience the full depth of the session.

Review the articles and resources listed at the end of this post.

Watch the Hera Fund Facebook page for details about our next Hera Fund Wingpact Founder Funder Conversation on the 4th Thursday of May, May 26th at 4:00pm PT.

Check out Wingpact’s book, just released May 5, Impact With Wings: Stories to Inspire and Mobilize Women Angel Investors and Entrepreneurs. Watch Wingpact’s Facebook page for launch events, including a panel discussion of Women and Capital Changing the World on May 17, which includes two rock-star Latina investors!

Please attend for the next annual Hera Fund Venture Summit on September 17, 2016 at the University of San Diego, where all of these important conversations will continue.

Resources to Build Awareness
(courtesy Lilibeth Gangas, Co-Founder of Somos ChangeMakers)

NVCA  & Crunchbase reports

National Venture Capital Associate Diversity Efforts – http://nvca.org/ecosystem/diversity/

Latina/o organizations for entrepreneurs

Latinos $1.4 T opportunity for startups

Kapor’s led with the most female funded VC & have a $40M commitment to diversity https://medium.com/tech-diversity-files/our-40-million-pledge-to-fix-the-leaky-tech-pipeline-f0d3463761d7#.ekxsmckg4

VC firm Andreessen Horowitz “has been quiet about its push to reach out to tech’s black community. Yet its star-studded but under-the-radar networking events have generated goodwill among the entrepreneurs, engineers and business leaders who’ve attended. The firm’s co-founder, Ben Horowitz, has said they don’t do it to be nice—they think it will lead to better returns. “https://www.theinformation.com/a16zs-low-key-diversity-outreach

Veteran tech executive Sukhinder Singh Cassidy began a project called Choose Possibility to collect data on women founders –getting their perspectives on the challenges and opportunities facing women in the startup arena. #ChoosePossiblity campaign

McKinsey Women Matters has great data and articles with a global perspective http://www.mckinsey.com/global-themes/women-matter

Forbes and Accenture partnered to provide content for female executives http://fortune.com/gettheworldsmostpowerfulwomennewsletter/

TechStars Women Entrepreneurship Digest and TechStars foundation to help more women of color get access to capital https://www.startupdigest.com/digests/women

Digital Undivided Report http://www.digitalundivided.com/

DigitalUndivided’s mission is to foster economic growth in minority communities by finding, supporting, and growing women of color entrepreneurs. A hybrid organization, DID accomplishes this by providing high potential Black and Latina women entrepreneurs with the network, coaching, and funding to build and scale their companies. Like no one else, DID excels at 1) finding Black and Latina women entrepreneurs with high growth companies and game changing ideas, 2) connecting them to an unmatched network of investors, mentors, and influencers, 3) developing their start-up toolkit and leadership skills, and 4) supporting their entrepreneurship journey from the build phase to exit with the goal of helping create companies that have a strong positive impact on the economic health of their local communities.

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