POS­I­TIVE VEN­TURE

Hart­ford Boasts An Above-Av­er­age Share Of Star­tups Founded By Women, But Per­suad­ing In­vestors Is Still A Gen­der-Gap Chal­lenge

Hartford Courant (Sunday) - - Front Page - By RE­BECCA LURYE rlurye@courant.com

Some­time dur­ing her 20-year ca­reer in fi­nan­cial ser­vices, and later as founder and CEO of her own startup, Sh­eryl O’Con­nor re­signed her­self to be­ing the only woman in ev­ery room.

But in Hart­ford, at least, O’Con­nor has found her­self feel­ing less and less out of place as a fe­male en­tre­pre­neur, some­thing re­flected in a new anal­y­sis of the city’s startup ecosys­tem, re­leased last week by the non­profit Kauff­man Foun­da­tion and re­search firm Startup Genome.

Her com­pany, year-old WealthCon­duc­tor LLC, is among the 35 per­cent of Hart­ford-based star­tups with at least one fe­male founder, ac­cord­ing to the re­port, which looked at the en­tre­pre­neur­ial com­mu­nity of six small-to-mid­size U.S. ci­ties. Glob­ally, women com­prise about 16 per­cent of startup founders, a share that’s re­mained stag­nant since 2012, ac­cord­ing to Cal­i­for­nia-based Startup Genome.

“It’s def­i­nitely a re­ally pos­i­tive sign,” O’Con­nor said of the Hart­ford find­ing. “There are a lot of well-ed­u­cated women in Con­necti­cut who have the gump­tion to get out

there and start their own firm.”

Can­dace Free­den­berg, an­other Hart­ford en­tre­pre­neur, says she sees the ev­i­dence ev­ery day in her own clients — moth­ers try­ing to re-en­ter the work­place.

Through her com­pany, Un­tapped Po­ten­tial, Free­den­berg has placed nearly 50 women in highly skilled po­si­tions, se­cur­ing them tri­als called “flex re­turns” that of­ten lead to full-time jobs.

A hand­ful of women in her pool of candidates plan to start their own busi­nesses down the road; and two ven­ture cap­i­tal­ists in her net­work are ea­ger to train women to join their teams.

And through­out Greater Hart­ford, she’s seen greater rep­re­sen­ta­tion at busi­ness panel dis­cus­sions, con­fer­ences and ac­cel­er­a­tor pro­grams, with women in­creas­ingly pitch­ing ideas, men­tor­ing star­tups and look­ing for in­vest­ments and part­ners.

It feels like an im­prove­ment over 2015, when she first pitched Un­tapped Po­ten­tial to a largely male au­di­ence.

“When you go to those things, two years later, there’s more eq­uity in the room,” Free­den­berg says.

Hart­ford isn’t alone. Among the six ci­ties an­a­lyzed, Spring­field had the high­est den­sity of young, tech-based star­tups, and the largest share of fe­male-founded star­tups — 40 per­cent.

Kauff­man Foun­da­tion and Startup Genome chose its six startup ecosys­tems — Al­bu­querque, N.M., Reno, Nev., New Or­leans and Fresno, Calif. — to be rep­re­sen­ta­tive of ci­ties across the coun­try. They’re each smaller than the 40 largest U.S. metro ar­eas, and have had slower economies than the na­tion as a whole.

In Hart­ford, the study noted, a “fo­cus on lever­ag­ing re­gional ex­per­tise in in­sur­ance” ap­pears to have helped the startup scene ex­plode. Lo­cally, city and cor­po­rate lead­ers are also work­ing to en­er­gize the fields of fi­nan­cial tech­nol­ogy and med­i­cal tech­nol­ogy and dig­i­tal health.

O’Con­nor, a for­mer em­ployee of Mass Mu­tual and The Hart­ford, is part of that push at WealthCon­duc­tor, lo­cated at 100 Con­sti­tu­tion Plaza. The in­come pro­gram she de­vel­oped with co-founder Philip Lu­bin­ski has 130 sub­scribers, up from 50 when the com­pany launched last year.

She’s also raised $400,000 from three an­gel in­vestors, and is plan­ning to raise an­other $1 mil­lion to keep build­ing up WealthCon­duc­tor’s soft­ware and team of fi­nan­cial plan­ners.

But O’Con­nor knows her suc­cess is not rep­re­sen­ta­tive of fe­male founders, in Hart­ford or oth­er­wise.

Women busi­ness own­ers re­ceive half as much as their male coun­ter­parts in early stage cap­i­tal, even as they de­liver higher rev­enue, ac­cord­ing to a June study by the Bos­ton Con­sult­ing Group and MassChal­lenge, a Bos­ton-based net­work of startup ac­cel­er­a­tor pro­grams.

The study looked at 350 com­pa­nies and de­ter­mined that the 92 founded by women re­ceived an av­er­age of $935,000 in in­vest­ments, com­pared with $2.12 mil­lion in­vested in the male-founded star­tups.

Mean­while, the women-founded busi­nesses gen­er­ated 10 per­cent more rev­enue over five years — an av­er­age of $735,000 com­pared with the men’s $662,000.

The re­sults shocked O’Con­nor, who was espe­cially taken aback that women-founded star­tups gen­er­ated 47 cents more per dol­lar in­vested than their male coun­ter­parts.

“If you’re suc­cess­ful as a woman en­tre­pre­neur, you’ve had to work ex­po­nen­tially harder at it than a man,” she said. “You’d think from an in­vestor standpoint, they’d just go by dol­lars and cents, and [ask], ‘What’s my re­turn on in­vest­ment?’ ”

“If the data’s out there, why aren’t they in­vest­ing in women-owned com­pa­nies?” she asked.

BCG and MassChal­lenge found a few themes that contributed to the wide in­vest­ment gap.

Women founders con­sis­tently got more push back from in­vestors dur­ing their pre­sen­ta­tions, in­clud­ing more ques­tions de­signed to test their knowl­edge of the ba­sics.

Women were less likely to chal­lenge in­vestors who dis­agreed with their ideas. They of­fered more con­ser­va­tive pro­jec­tions, and some­times asked for less money than men.

And they of­ten pitched ideas tar­geted at women, like busi­nesses around beauty or child care, mean­ing the male in­vestors were less fa­mil­iar with their prod­ucts and ser­vices.

That’s where O’Con­nor sees the most po­ten­tial for change: get­ting women-founded star­tups ad­e­quately funded with ven­ture cap­i­tal.

Ali La­zowski de­cided to skip pitch­ing to in­vestors al­to­gether when she sought fund­ing for Bare Life, her startup pro­duc­ing al­ler­gen-free foods and recipes for peo­ple like her, suf­fer­ing from chronic ill­nesses that cause di­etary re­stric­tions.

The West Hart­ford na­tive turned to crowd­fund­ing to raise money for the launch of her first prod­uct, a hot cho­co­late mix that’s or­ganic, non-GMO, kosher and free of dairy, gluten, re­fined sugar, yeast, egg yolk and xan­tham gum.

The ap­proach had its draw­backs — she raised only $9,500, far short of the $55,000 she’d planned on to launch her com­pany with a 2,000-unit pro­duc­tion run of hot cho­co­late and the re­lease of two cook­books.

But La­zowski, who be­gan re­tail sales this month, says she lacked con­fi­dence at the start of her jour­ney, a more com­mon pit­fall among women en­trepreneurs than men. And it went be­yond the phys­i­cal ail­ments that in­spired her to launch the brand, in­clud­ing ir­ri­ta­ble bowel syn­drome, Hashimoto’s dis­ease, thy­roid can­cer and Lyme dis­ease.

“I felt like I was sort of frag­ile in what I was do­ing,” she said. “I didn’t think I could be in busi­ness, like, ‘Me, are you sure?’ I still strug­gle with it, the in­se­cu­rity.”

She worked through those doubts as a mem­ber of re­SET, a Hart­ford-based non­profit that sup­ports so­cial en­ter­prises.

And rais­ing money on­line paid off in other ways, help­ing La­zowski reach a wide au­di­ence and build a test mar­ket. Many of her 60 back­ers also are po­ten­tial cus­tomers.

O’Con­nor and Free­den­berg agree, though, that con­nect­ing women to ven­ture cap­i­tal will help close the gen­der gap.

It’s al­ready be­gun, ac­cord­ing to a 2017 study by the Univer­sity of Penn­syl­va­nia and Har­vard Univer­sity, which sur­veyed more than 1,600 ac­cred­ited an­gel in­vestors across the coun­try.

Women made up 30 per­cent of those who started in­vest­ing in the past two years, com­pared with 22 per­cent of an­gel in­vestors over­all.

The sur­vey also found signs that women in­vestors con­sciously tried to in­vest in other women — half of fe­male re­spon­dents said they con­sider the gen­der of a busi­ness founder when de­cid­ing whether to in­vest, com­pared to 6 per­cent of men.

In time, Free­den­berg thinks, more women will see the ben­e­fits of in­vest­ing, how it takes all the same skills as a tra­di­tional cor­po­rate job, but doesn’t con­fine you to a tra­di­tional of­fice.

“It’s flex­i­ble work,” she says. “It’s some­thing you can be think­ing of all the time and put your all into, but do it on your own sched­ule.”

CLOE POIS­SON | CPOISSON@COURANT.COM

MARCI KLEIN, sec­ond from right, talks to a group about 3Dux|De­sign, which she co-founded with her chil­dren, at a skil­lUP ses­sion run by Un­tapped Po­ten­tial Inc. at the Farm­ing­ton Li­brary's mak­erspace. At right is Kathy Hazel of Un­tapped Po­ten­tial.

SKIL­LUP ses­sions run by Un­tapped Po­ten­tial in­Farm­ing­ton are in­tended to ex­pose peo­ple to new fields, tech­nolo­gies and work­place trends.

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