Women en­trepreneurs face fund dis­crim­i­na­tion

The Washington Times Weekly - - National - BY JAC­QUE­LINE KLI­MAS

The real war on women is be­ing waged by loan of­fi­cers and cap­i­tal in­vestors, a group of suc­cess­ful fe­male en­trepreneurs told a Se­nate panel Wed­nes­day.

Peo­ple are twice as likely to in­vest in a startup pitched by a man than by a woman, re­sult­ing in fewer women start­ing small busi­nesses, said Barbara Cor­co­ran, a New York City real es­tate mogul who now in­vests in star­tups on the ABC TV show “Shark Tank.”

Ms. Cor­co­ran was among fe­male en­trepreneurs tes­ti­fy­ing be­fore the Se­nate Small Busi­ness and En­trepreneur­ship Com­mit­tee about how to level the play­ing field and en­sure women get equal help start­ing a busi­ness.

While sex dis­crim­i­na­tion in loan-giv­ing al­ready is il­le­gal, other per­cep­tions about busi­ness­women may be more dif­fi­cult to change and are con­tribut­ing to fi­nanc­ing gaps, they said.

A Har­vard Busi­ness School study showed a group of peo­ple two pitches. While the words and im­ages shown were iden­ti­cal, one was nar­rated by a man and the other was nar­rated by a woman. About 68 per­cent of in­vestors chose to back the man, while only 32 per­cent chose to fund the woman’s pitch.

“The men used the ex­act same words; it was just a mat­ter of who was de­liv­er­ing,” said Sen. Maria Cantwell, Wash­ing­ton Demo­crat and the panel chair­woman.

“We want to make sure we flat­ten these bar­ri­ers,” said Ms. Cantwell, who was a wealthy soft­ware in­vestor be­fore be­ing elected.

Ms. Cor­co­ran said she be­gan her ca­reer as a wait­ress, where a cus­tomer said she had the kind of per­son­al­ity that would thrive in real es­tate and gave her a $1,000 loan. Other than her first loan, Ms. Cor­co­ran strug­gled to se­cure in­vest­ments in a male-dom­i­nated field where many came from suc­cess­ful fam­i­lies.

“I found it enor­mously dif­fi­cult to com­pete with the men,” she said. “I found it par­tic­u­larly dif­fi­cult when I tried to grow my busi­ness, be­cause I had no ac­cess to cash while the men had easy ac­cess to what­ever cap­i­tal they needed to con­tinue to grow and com­pete with each other.”

De­spite the dif­fi­cul­ties, Ms. Cor­co­ran even­tu­ally sold her com­pany for $66 mil­lion.

“Shark Tank” in­volves en­trepreneurs with new ideas or prod­ucts pitch­ing a panel of five “sharks” to get them to in­vest in their busi­ness. While many go home empty-handed, the in­vestors will out­bid each other for some of the best ideas, of­fer­ing both their cap­i­tal and their ex­pe­ri­ence to the startup founders.

Ms. Cor­co­ran said the male in­vestors on “Shark Tank” usu­ally only in­vest in “cute, well-en­dowed” women. In fact, she said she’s not even sure if the men are pay­ing at­ten­tion to the busi­ness num­bers when a woman is pitch­ing.

“I au­to­mat­i­cally know, when a woman walks on to the set, she only has a 50 per­cent chance of get­ting money from those guys,” she said.

She also added that men of­ten can’t re­late to prod­ucts women pitch that have to do with fam­i­lies or chil­dren.

Most weeks, the panel of in­vestors on “Shark Tank” in­cludes Ms. Cor­co­ran and four men: Mark Cuban, the owner of the Dal­las Mav­er­icks; Robert Her­javec, a tech­nol­ogy ex­ec­u­tive who owns his own pri­vate is­land; Day­mond John, who cre­ated the FUBU cloth­ing line; and Kevin O’Leary, who works in ed­u­ca­tional soft­ware.

In the last sea­son, Lori Greiner, a QVC per­son­al­ity with 120 patents, joined the show oc­ca­sion­ally, re­plac­ing one of the men.

Ms. Cor­co­ran was seem­ingly starstruck in her visit to Capi­tol Hill, begin­ning her re­marks by say­ing, “I’ve never seen a real se­na­tor be­fore.” She went on to ask if she could take one of the pa­per coast­ers on the wit­ness ta­ble that said “U.S. Se­nate.”

Sen. Ben­jamin L. Cardin, Mary­land Demo­crat, replied with a laugh that “bud­gets are tight.”

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