Just Own It

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From biotech labs and bakeries to high-tech startups and multimillion-dollar food enterprises, more women than ever are launching and growing their own businesses. But despite their proven success rates and impact on the economy, women-led companies get fewer resources and opportunities than those led by men, especially in Wisconsin. Can Madison’s exploding entrepreneurial ecosystem give women an edge?  


THEY MEAN BUSINESS: Standing, left to right: Laura Strong, Saideh Jamshidi and Natasha Vora; seated, left to right: Kelda Roys, Liz Eversoll, Teresa Holmes and Alicia Navarrete.


“A massive public failure and humiliation” is how Kelda Roys wryly describes the 2012 end of her political career when we meet on a bitterly cold January day in a Monroe Street coffee shop. Not only had the former State Assemblywoman challenged a popular colleague in the Democratic primary for Tammy Baldwin’s open seat in Congress, Roys went negative against her own kind, the affable Mark Pocan. Outspent two-to-one and finishing a distant second, Roys limped away.

The following spring, Roys, whose LinkedIn profile also lists attorney and licensed real estate broker, was searching for what would be next. So she signed up for Madison Startup Weekend, the local version of a global immersion event, where total strangers spend three days together: pitching business ideas, forming teams, creating business models and presenting them to local entrepreneurial leaders for feedback. Perhaps inevitably, Roys’s idea came roaring out of the flames of her torched political aspirations: a technology startup that would level the playing field for candidates, like her, who eschew corporate contributions.

A year later, she showed up again at Startup Weekend, only this time as one of the two featured speakers and the poster child for what can happen when what's become known as the “entrepreneurial ecosystem” spreads out across industry sectors and sizes in a community, a region or a planet.

The surprise twist in Roys’s story is this: her original startup idea was a hit, winning the popular vote during the pitch session. But she didn’t get the right mix of people to form a team, and so Plan A—to totally disrupt what she considers a corrupt campaign financing system—was shelved. Simultaneously, Plan B emerged—she’d actually been pondering this idea, too—when that same weekend she met the person who would become the co-founder of the business OpenHomes. The two would soon launch an online hub offering new tools for home sellers for one-sixth of the cost of a traditional real estate agency. It turns out Roys might actually get to disrupt something after all. 

“It is not credible to me when you look at how access to information and mobile have transformed other industries like travel and insurance and somehow real estate is going to be the one force left unchanged,” says Roys, who picked up her real estate license in college at NYU to help pay tuition, selling high-end apartments in Manhattan. “Consumers deserve more options than just, do it all on your own and pay up front to a service, or pay tens of thousands of dollars for somebody that might do two hours of work on your property.”

A startup like Roys’s is what’s known as a scaleable business—her growth and revenue projections are ambitious, if not risky, but first she must attract more funding. And that is where angel investing and venture capital come into play. That is also one of the places and spaces where female-led businesses falter—at that powerful, crowded and male-dominated intersection of money and access.

“The tech world and the entrepreneurial world I would say are even more male than the political one. Not as hostile, certainly, but the norm is always a male,” says Roys. “And it’s still remarkable to come across women, especially on the investor side.”

20/20 VISION

Natasha Vora’s new business, changing the landscape of eyewear, is also disruptive, scaleable and backed by angel investors. Launched in September of last year, Iristocracy is an e-commerce website selling fashionable glasses and accessories. In addition it presents a different, safer and more lucrative business opportunity for optometrists. Iristocracy won’t fill a prescription like other e-commerce sites. Instead, consumers buy the product online and have the lenses filled by their own optometrists. But Vora’s vision goes way beyond designer specs and bling. Eventually, Iristocracy will also go digital to bricks and mortar by providing eyewear kiosks equipped with their virtual 3-D try-on technology (Oprah’s BFF Gayle King recently gave the e-version a whirl and a boost with a thumbs-up endorsement in the April issue of O magazine). Revenues will be split with the eye care provider. If the business-savvy Vora’s instincts are right, this relationship will neutralize Internet-based prescription providers with the consumer health message that you shouldn’t trust your eyes to just anyone. And she’s got the industry research to prove it.

What she doesn’t have—yet—is all of the venture capital she needs to build and grow the business. “We’ve raised over $500,000 to date from outside investors,” says Vora of the good news. The catch is that a lot of it is from outside Wisconsin. Our state doesn’t have much of a track record for attracting and growing venture capital firms just yet. And with a smaller pool of investors here, the competition for dollars is fierce. Add the simple fact that there aren’t as many female-led companies vying for early-stage financing from established Wisconsin investment firms, and you start to see the lop-sided picture that emerges.

Both Roys and Vora have a store of anecdotes about gendered experiences while pitching to investors. During the gener8tor business accelerator program last summer, which offers instant credibility and access for promising high-return startups because of its rigorous application process (a lower acceptance rate than Harvard, they boast), Roys says her pregnancy gave at least one investor group pause—“too many moving parts” was the reason given to decline to invest in her business. In Vora’s example, her male business partner reached out to angel investors that had hesitated with the exact same pitch, and secured the financing. “In a couple cases we felt like he had to go in and close the deal,” she says.


THREE'S COMPANY: Left to right: Jackie Mortell, Smart Solutions; Coz Skaife, Rosie’s Coffee Bar & Bakery; and Tera Johnson, Tera’s Whey.

Tera Johnson had similar experiences in 2007 and 2008 when she needed to raise $14 million to scale her business all the way to the top of the natural foods market. Her signature product, an organic and hormone-free whey protein powder called Tera’s Whey, is now a national brand. She successfully sold to a public company in 2013, and now mentors and coaches entrepreneurs and investors as founder of the Food and Finance Institute within University of Wisconsin–Extension, which has placed $3.2 million into the food and agricultural economies statewide. The Institute also provides services to worthwhile projects like the Slow Money Wisconsin Business and Investors Showcase, which connects potential investors to promising new local food and sustainable farm ventures. The companies that presented at last year’s showcase went on to raise $600,000 with the Institute’s technical assistance. 

“When I was raising money for my own business, I only pitched once to a woman who was not there as a spouse but as an accredited investor,” recalls Johnson. “Part of it is that the investor team is very clubby, at least in this part of the country. When I was pitching it was to a group of people who already knew each other. And gender has something to do with that. It’s like it was a football team and I wasn’t on it.”

Whether it’s raising venture capital or doling it out, says Johnson, “women are underrepresented in all the data on all the startups nationally. That means they’re not selling companies and people who sell companies are the people who are more likely to invest in a company.

“There’s a whole other level to the glass ceiling,” she continues. “It’s not intentional, at the level of investment, it’s the result of not having as many women entrepreneurs.”

It should be noted that any case to be made for successful women-owned businesses of any size or constitution, be they startups or national brands, is not simply a moral proposition on the question of women’s rights and equality. Study after study now makes the business case for female-owned and female-led companies and investments. 

“I can’t believe the criteria people are using when they ultimately decide to invest in something—it’s not analytical,” says Johnson. “Anything we do to increase the quality of the due diligence will probably benefit women entrepreneurs. If we really are making decisions based on hardcore numbers and pragmatism, that would help women.”


Lest you think Johnson is just being bossy, as women who speak up and promote themselves and their ideas are often labeled, consider this study: VC firms that fund both male and female-led businesses perform better than firms that fund only male-led businesses, according to the U.S. Small Business Administration’s Office of Advocacy. Then there’s the fact that female-led startups launch with a third less capital, the Kauffman Foundation reports.

But here’s where reality bites: Since 2007, the only businesses in the U.S. providing a net increase in employment are large, publicly traded corporations—and privately held, majority women-owned businesses. Yet, ninety percent of women-owned firms have no employees other than the business owner, compared to eighty-two percent of all firms, and just two percent of women-owned firms have ten or more employees. That’s according to the 2013 State of Women-Owned Business Report by American Express OPEN.

There’s even a new name for the problem of fewer women entrepreneurs on the high-growth, high-return track. While the “glass ceiling” identifies the challenges women face as they climb the corporate ladder, the “glass wall” describes the lateral gender gap in entrepreneurship. According to the Amex report, revenue growth for female-led firms has exceeded the national average in every business revenue size class until they reach the million-dollar/one-hundred employee mark, where only one in five companies is owned by a woman (one in thirteen in Wisconsin).

In other research, companies backed by venture capital with female senior executives on board are more likely to succeed than those with only men at the helm, according to an analysis by Dow Jones VentureSource called “Women at the Wheel.” Yet, the same study found that only 1.3 percent of privately held companies have a woman founder, 6.5 percent have a woman CEO, and female corporate-level executives make up only twenty percent of that workforce.

The local upstream swim toward gender equity and women’s wealth generation might seem daunting to some, but not to the no-nonsense Pam Christenson. Former bureau director of entrepreneurship and technology development at the state Department of Commerce and current economic development director for Madison Gas & Electric, Christenson serves as president of StartingBlock, the project to relocate the hackerspace Sector67 and the accelerator gener8tor, plus other resources and services for the startup community, into a highly anticipated new development hub that’s beginning to take shape along East Washington Avenue. She’s also part of the emerging dynamic around innovative ways to launch and grow women-owned businesses.

“The statistics show that women are very successful when they start up businesses,” she says. “And so why aren’t there more of them doing it?”

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