USA TODAY US Edition
Funding model boosts female entrepreneurs
SheEO helps with challenges related to growth
NASHVILLE – In a Nashville living room overflowing with local female business leaders, Canadian entrepreneur Barbara Alink demonstrated how the walking bike she created was supported by a new investment model for female entrepreneurs and how the product was benefiting individuals unsatisfied with the wheelchair experience. The Nashville attendees peppered her with questions about the investment she received and how the product, called the Alinker, worked. When they were asked if they would be willing to contribute $1,100 to help other promising female entrepreneurs, at least 20 hands shot up. The funding model, called SheEO, is led by Vicki Saunders, who has been building and leading companies for the past 25 years. Recognizing the lack of investment dollars flowing to women-led businesses, Saunders launched SheEO in 2015 to provide female entrepreneurs with more access to capital. So far, 32 women-led companies in four countries have received SheEO funding.
“All of the women who contribute capital bring their networks, their buying power and their expertise to help grow the businesses.”
“It’s not just money, it’s the network,” Saunders said, speaking at the Nashville gathering. “All of the women who contribute capital bring their networks, their buying power and their expertise to help grow the businesses.”
How it works
Five hundred women each contribute
$1,100, a 100 percent tax-deductible expenditure. Together they build a fund of
$500,000, distributed to five womenowned companies they select through two rounds of voting.
Companies applying for SheEO capital must be generating at least $50,000 in revenue and also need to demonstrate how they are making a positive impact. SheEO businesses have five years to repay the $100,000 zero-interest loan, money that goes to the next wave of SheEO entrepreneurs. SheEO has a 100 percent payback rate, Saunders said.
Regardless of whether they are chosen, applicants get feedback from women who wish to provide funding and exposure to this network of contributors.
Addressing a funding gap for women in venture capital
In the first half of 2018, U.S. companies with at least one woman founder attracted about 12.5 percent of all venture capital invested, according to PitchBook. In 2017, just 2.2 percent went to U.S. companies founded solely by women and those companies accounted for 4 percent of all venture capital transactions. Eleven percent of partners at venture capital firms in the U.S. are female, compared with about 51 percent of the U.S. population.
The SheEO model helps women overcome challenges to obtaining the necessary funding for business growth. Many companies don’t need venture capital-sized investments but they are seeking enough money to get them to their next phase, where they can make new hires and meet production demand.
“We are stuck in this mindset of ‘go big or go home,’ ” Saunders said. “Women don’t run businesses like that. We don’t sit down and say, ‘how can I maximize market niche and make as much money as possible.’ We say, ‘I want to solve a problem.’ ”
Saunders took NRG, a company she founded, public at age 34. She said she was told a man would replace her as CEO and that many of the things that made her company special no longer worked fi- nancially. Since then, she has mentored more than 1,000 entrepreneurs and often saw women face the same hurdles she did. To confront those challenges, she created SheEO.
The model is underway in Canada, the U.S., New Zealand and Australia. By
2025, SheEO seeks to develop a $1 billion fund for 1 million women so that
10,000 entrepreneurs benefit each year.
Pat Shea, former CEO of the Nashville YWCA, said the model is helpful to not just the entrepreneurs, but to those who want to support entrepreneurs without writing the large checks associated with venture capital.
“There are a lot of women who have the ability to support women who are starting companies, but can’t do $30,000,” Shea said at the SheEO event. “They can do the ask we are doing tonight. Anyone can participate and make a big difference.”
How to join SheEO: visit SheEO https://sheeo.world/. The application process ends Oct. 31 and company selections are made in November.