Ask for funding, women urged
MICHELLE Scarborough, who runs one of the world’s largest venture capital funds dedicated to female-led startups, sees one big difference between men and women in the space: men demand more money.
Coaching women to make more forceful pitches is one of the things Scarborough does as managing director of the C$200mil (RM633mil) fund she runs for the Business Development Bank of Canada.
A man might explain how he’ll meet his sales target and ask for C$5mil (RM15.9mil) to get him there, said Scarborough. A woman will tell her story and ask for help – not necessarily money.
“The language is very different, the ask is very different,” Scarborough, 49, said in an interview in Bloomberg’s Toronto office. “Many women will ask for much less or they will agree to accept much less.”
After more than 20 years as an entrepreneur and investor, including at Torontobased private equity firm Kensington Capital Partners, Scarborough said asking for what is necessary is serious business.
She herself went back to BDC, a government-owned corporation, to ask the fund be increased from C$70mil (RM222mil) in an effort to move the needle on gender dynamics in Canada’s tech industry.
The Women in Technology Venture Fund invests directly in companies that have a female founder, co-founder or senior-level executive, as well as other funds and creates an ecosystem to support women. The Toronto-based fund was set up in 2016 and plans to double staff to 15 people.
Scarborough sees no shortage of companies worthy of funding. She has deployed C$10mil (RM31.7mil) directly into about 20 companies since joining the bank last year and is on the verge of investing in two new opportunities, aiming for returns of two times the original investment.
One of the companies backed by the fund has already been sold, returning 1.9 times, a “decent rate of return, considering the fund held this investment for less than two years”, she said, declining to name it.
“I was actually surprised by the number of women that come to me and said ‘I pitched my story and I was sort of dismissed,’” said Scarborough. “Or women who said, ‘I was actually told in a room that I am very pretty and that I should maybe think about bringing an old white-haired guy onto my team to help me because that would be better for me and I’d get further.’”
But a growing number of funds are investing in women-run businesses. In the US, BBG Ventures, led by former Gilt Groupe Inc CEO Susan Lyne, looks for companies with at least one female founder. Forerunner Ventures, started by Kirsten Green, has seen success betting on womenled projects in e-commerce. And the Female Founders Fund raised US$27mil (RM112mil) for a new seed fund in May.
“We are expected to make money. As much as I’d like to be philanthropic, that is not what this exercise is about,” said Scarborough. – Bloomberg