Women & startups in New York: will funds from the City help?

Maria Teresa Cometto —  March 3, 2019 — Leave a comment

<<“Last year, when I was raising my seed, this guy was like, ‘It must be really difficult for you to raise money, Shannon, because men dissociate intelligence from attractiveness,’” said Shannon McLay, 40, who has started a chain of financial coaching centers called Financial Gym. (…)

“I’ve heard, ‘I really love you, Chanel, I think you have an amazing company, but I think I might want to date you,’” said Chanel Melton, 31, the founder of a hair-extension company called RoseGold Pro. >>

These are just two examples of how difficult is raising money fo startup female founders, according to the New York Times article “When Women Control the Money, Female Founders Get Funded“.

The Wing, a women-only co-working club in New York

Fortunately New York is the most friendly city to women entrepreneurs, as we wrote in “Tech and the City”: startups founded by women here are twice that in Silicon Valley or in London, as a percent of the total; out of 100 New York new high-tech companies, 20 are founded by women and 80 by men only, in Silicon Valley and London the ratio drops to 10-90.

Among other things, there is a women-only co-working club, The Wing, and there is Able Partners, a NYC venture capital firm that was started three years ago by Lisa Blau and Amanda Eilian as an early-stage investor in a number of female-founded companies. For example Able Partners has invested in The Wing and Goop.

According to the venture-tracking site Crunchbase, as of October 2017, women made up just 8 percent of investing partners at the top 100 VC firms. And last year, female founders received only 2.2 percent of the $130 billion in venture money invested in the United States, according to the analytics firm PitchBook and the advocacy organization All Raise.

One way to change this scenario, is for successful women to do what men do. “We need the old girl’s network,” said Linnea Conrad Roberts, the chief executive of Gingerbread Capital and a former partner at Goldman Sachs, as she waved to Ms. Blau. “If you think about the ecosystem that guys have, a Silicon Valley founder will make hundreds of millions of dollars and he doesn’t go home and retire; he starts putting it toward funding other companies.” Instead too often women like Ms Roberts, after retiring from Wall Street or similar powerful jobs, just do philanthropy.

On the other hand, I’m not sure NYC Mayor Bill de Blasio’s strategy is right: he has just announced that the City will invest $30 million in women-led start-ups through a program called WE Venture, in coordination with private venture capital firms that have a track record in the area. It is exactly what former Mayor Mike Bloomberg avoided, rightly so: Bloomberg didn’t bet public money on startups, because it means choosing winners/losers; he developed the environment, the infrastructures, the “mood” that are vital to a startup ecosystem where the entrepreneurs themselves – women & men – are the most important protagonist. Bloomberg’s recipe was very successful. We’ll see about de Blasio’s.

Maria Teresa Cometto

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