By Tim Omarzu
Chattanooga Times Free Press, Tenn.
How come women only get a fraction of the venture capital funding that men do?
That was one topic of a lunchtime talk held Thursday at the Bessie Smith Cultural Center as part of Startup Week Chattanooga, a five-day event to celebrate all things high-tech and entrepreneurial in the Scenic City.
“What are we as women doing to hold ourselves back?” asked Sheri Young, the founder and CEO of Feminology, a Chattanooga- and Nashville-based marketing and public relations firm that works with aspiring female-owned brands.
Only about 13 percent of venture capital-funded companies are owned by women, said Young.
One unfair stereotype that female entrepreneurs face is that they don’t think big enough, said Alex Lavidge, the entrepreneur-in-residence at The Company Lab (CO.LAB) a nonprofit organization on the first floor of the Edney Building at Market and 11th streets downtown that helps would-be entrepreneurs make their business ideas come to life.
“[Investors think] you’re not going to create an explosive, high-growth opportunity,” said Lavidge, one of two men on the panel.
“Appalling” was the word that panelist Julia Maltby used to describe the venture capital figure that “only 4 percent of the money goes to firms that entirely female-founded.”
“Crowdfunding” is another way female entrepreneurs can get started, said Maltby, the director of business development at Plum Valley, a New York City-based tech platform that uses crowdfuding helps women finance business ventures.
“It’s not a donation,” said Maltby, who participated as a panelist via videoconference. For example, a woman who needed to raise $20,000 for her clothing business did so by posting the designs on Plum Valley and getting people to pay for them before they had been made.
Panelists said perceptions are changing, and women’s share of the venture capital pie is growing — though slowly.
In Chattanooga, for instance, the JumpFund was created in 2013 as an angel fund dedicated to investing in women-owned or led companies. So far, the fund has invested in nine startup companies, according to its web site.
Another, “really underrated” way to raise funds, said Scott Maucere, a Chattanooga attorney who works with startups, is the “lean model” where businesses generate revenue as they grow.
That’s not as glamorous, he said, as seeking funds from venture capitalist or angel investors. But asking for outside funds has its downsides, he said.
“It’s about the hardest thing you’re ever going to do in life is ask people for money for your crazy idea,” Maucere said.