Fund­ing model boosts fe­male en­trepreneurs

SheEO helps with chal­lenges re­lated to growth

USA TODAY US Edition - - MONEY - Jamie McGee

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.

JAMIE MCGEE/USA TO­DAY NET­WORK

Non­profit leader Pat Shea in­tro­duces SheEO, an in­ter­na­tional fund­ing model for fe­male-owned com­pa­nies, to women in the lo­cal busi­ness com­mu­nity in Nashville, Tenn.

Vicki Saun­ders

JAMIE MCGEE/USA TO­DAY NET­WORK

Nashville women com­mit to fund­ing new fe­male-led com­pa­nies through the SheEO model.

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