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Tuesday, January 18, 2022

Combating for fairness: How Maine feminine entrepreneurs are beating the chances to lift capital

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As Atlantic Sea Farms CEO Briana Warner raises greater than $4.5 million in enterprise capital to finance a brand new 27,000-square-foot kelp-processing facility in Biddeford, she recollects early pitches to unwelcoming buyers.

“It was pretty deflating in each approach,” Warner says three years after taking the helm of the nation’s first commercially viable seaweed farm, established in 2009. “It wasn’t uncommon for me to stroll right into a room with a bunch of previous white males and be advised that ‘Nobody goes to eat kelp. What are you considering, and why are you speaking to us?’ and questioning my skill to know fundamental information in regards to the world. I had one expertise the place somebody stated, ‘We all know you current effectively, however are you able to promote kelp?’ with an insinuation about how I regarded.”

The usual wasn’t the identical for 3 fellow Ivy League alumni — all males — with a money-losing enterprise and nil workers retention who obtained softball questions and obtained the $2 million they sought, in response to Warner, who holds a grasp’s diploma from Yale.

She, alternatively, went in having raised $1 million and with a stable monitor file and marketing strategy, “and so they simply threw daggers the entire time.” Although the buyers later got here spherical, Warner turned them away earlier than due diligence after deciding she didn’t wish to be in enterprise with them.

“I’m joyful for the blokes to get that cash, as a result of if these buyers are a–holes, a minimum of I can vet them out earlier than they’re in my cap desk,” says Warner.

Whereas the early setbacks didn’t cease Warner from profitable over buyers in Maine and elsewhere, her bumpy begin typifies a male-dominated enterprise capital fundraising tradition that’s lengthy been inhospitable to ladies and is just slowly beginning to change.

‘Smaller portion of a bigger pie’

Whereas mega-deals are propelling the U.S. enterprise capital trade to file highs, the proportion of cash going to startups based by ladies is declining.

Within the first eight months of 2021, corporations with all-female founders raised simply 2.2% of enterprise funding, which in response to Crunchbase is decrease than any of the earlier 5 calendar years. The image is even grimmer for Black and Latina feminine founders, who obtained 0.43% of enterprise funding in 2020, down from 0.67% the 12 months earlier than, in response to ProjectDiane figures cited by WIRED journal in October.

One other report, launched by PitchBook in early November, discovered that whereas the U.S. startup ecosystem elevated deal worth by 16% in 2020, VC {dollars} invested in female-founded corporations fell by 3% and deal rely fell by 2%, “which means feminine founders obtained “a smaller portion of a bigger pie.” Early-stage startups based by ladies additionally noticed median valuation will increase of solely 4%, trailing the 15% general market enhance.

At the same time as feminine founders are promoting their corporations extra shortly and at larger valuations than the trade general, they’re deprived within the preliminary phases when courting potential buyers — who’re nonetheless predominantly male and pose completely different inquiries to completely different genders.

That’s well-documented in a number of locations, together with a 2017 Harvard Enterprise Overview research of interactions at an annual startup funding competitors in New York. Researchers noticed that whereas males have been requested about potential beneficial properties (“How do you intend to monetize this?”) ladies have been placed on the defensive about potential losses (“How lengthy will it take you to interrupt even?”).

Perfecting enterprise pitches

Picture / Tim Greenway

Amy VanHaren, founder and CEO of pumpspotting, raised $1.15 million in a latest seed spherical.

In Maine, Warner isn’t the one feminine startup chief — and profitable fundraiser — to get curveballs from male buyers and hit again with confidence.

Think about, for instance, explaining a breastfeeding assist platform to a bunch of fifty males and solely a handful of girls, as Amy VanHaren needed to do in Boston.

“I noticed all of them, I used to be nervous. I ended up entering into and began my pitch saying, ‘Breastfeeding is basically laborious. Increase your hand in case you really feel me,’” the Kittery-based entrepreneur recollects of a pitch assembly for her firm, referred to as pumpspotting. “They checked out me for a minute and so they all began laughing.”

Her response to them: “You’re going to need to take my phrase on this.” From these sorts of disconnects with buyers, she realized the significance of studying a room and improved her storytelling abilities with each pitch.

“The higher outfitted I used to be in a position to paint a transparent image, the extra I used to be in a position to not solely discover the suitable buyers shortly, but in addition some shocking champions,” says VanHaren, who raised $1.15 million final August in a seed spherical led by San Diego-based MooDoos Investments.

One other instance is Torey Penrod-Cambra, co-founder and chief advertising officer of Portland-based industrial software program maker HighByte, which raised $1.125 million in pre-seed funding in 2020 and gained the $20,000 Gorham Financial savings Financial institution LaunchPad competitors in June. Caught off guard in some pitches by questions she believes her male co-founders have by no means been requested, she now solutions with a question of her personal.

“Once I’ve been requested questions on my private life — particularly my skill to stability parenthood with entrepreneurship — it jogs my memory that gender inequity continues to be pervasive in our properties {and professional} lives,” she says.

“Quite than get upset, it’s extra productive to reply with empathy and encourage the inquirer how they have been in a position to stability these calls for in their very own life.” She additionally says that answering a query with a query is an effective technique basically, to tease out the “why” behind a query and get buyers extra engaged within the dialogue.

Picture / Tim Greenway

Kay Aikin of Dynamic Grid — a Portland-based startup that designs clever power for electrical grids — is having a troublesome time in her effort to lift funds for a photo voltaic venture in Maine.

Amongst extra seasoned entrepreneurs, Kay Aikin of Dynamic Grid — a Portland-based startup that designs clever power for electrical grids — is having a troublesome time in her effort to lift funds for a photo voltaic venture in Maine.

“It’s time-consuming, it’s irritating, and I’m not good with rejection,” Aikin says after fruitless calls to buyers as far afield as Ukraine, and a latest rejection — from a feminine investor in Canada — by way of a three-sentence e-mail curtly thanking Dynamic Grid “for you-all’s time.”

Hoping to do higher with a Boston neighborhood enterprise group she’s pitched to, Aikin says she’d wish to see all enterprise capitalists look past what she calls “sample matching” in vetting functions, and see extra ladies on the monetary aspect, noting: “We want extra ladies buyers, and we want extra ladies tech buyers.”

Picture / Courtesy of Dream Native Digital

Shannon Kinney, founding father of Dream Native Digital, says it is necessary not simply to lift capital, however to lift “good cash” from buyers who can provide clever counsel.

In the meantime in Rockland, Shannon Kinney of digital advertising company Dream Native Digital has some regrets about her personal fundraising method, saying, “My female tendencies needed to make a deal work, and I made the deal work in a approach that didn’t assist sufficient future progress. My buyers have been so motivated about job creation in Maine, and I zeroed in on that a part of the story,” she says. “I ought to have broadened my horizons no matter how individuals felt.”

Now main an organization that has downsized by half through the pandemic, Kinney says she appreciates all her buyers, notably Sandra Stone, chair emerita of the Maine Angels group of early-stage non-public fairness buyers.

“As a feminine founder, you want good cash, not simply any cash,” Kinney says, “and Sandra for me was good cash.”

Heather Blease, proprietor and CEO of Brunswick-based call-center firm SaviLinx, which raised $330,000 in 2015 from buyers together with Maine Angels and Bangor Angels, feels equally although she’s additionally encountered hurdles in previous pitches.

“One among my challenges,” she says, “was that my firm didn’t have the intrigue of an attention-grabbing novel know-how app, mental property or an invention with the potential of hitting it out of the park as an in a single day success.”

Extra feminine checkwriters

Nationwide, the variety of feminine checkwriters at enterprise capital corporations has elevated by almost 3.5% since 2019, with ladies now holding 15.4% of normal associate positions, as documented by PitchBook. That’s vital as a result of the presence of feminine buyers within the room has been extensively proven to spice up possibilities of success for a female-founded firm to safe funding.

Extra ladies are additionally coming into angel investing, which PitchBook notes is an unheralded however vital cog within the enterprise capital conveyor belt. Nationwide, the variety of feminine angels has grown from fewer than 100 in 2010 to 895 immediately, because the pool retains increasing.

That’s actually true at Maine Angels, with about 30 feminine members out of 94 complete and eight women-led startups in its portfolio together with Atlantic Sea Farms, HighByte, pumpspotting and Dream Native Digital.

“Ladies like coming to Maine angels as a result of we’ve ladies within the room,” says Stone. Alongside comparable traces, Maine Angels member Susan Morris says it’s simply as vital to have enlightened males on board and attending gatherings targeted on ladies: “Till the boys equally present up, then we’ve not even cracked the floor as a result of we’re preaching to the choir.”

Whereas Maine Angels members make their very own funding choices, Robert Kelley of Port Clyde says he’s happy that the group prioritizes range on a startup’s administration group — which additionally guides him in deciding the place to place his capital and experience.

“I’ve turned my focus to solely funding and mentoring ladies and BIPOC entrepreneurs, serving to them entry capital, information and administration expertise usually traditionally denied them,” says Kelley, an investor in corporations together with Atlantic Sea Farms, Sara Rademaker’s American Unagi eel-rearing enterprise and Dream Native Digital, whose board he chairs.

Catherine York Powers, of Portland-based fintech startup Fixed, lately acknowledged on the Forbes Subsequent 1,000 listing of entrepreneurial heroes, additionally has a mission-driven method to her investments in small corporations, however for private causes.

“Being a lady of coloration, I additionally search for alternatives to spend money on people like me, as a result of it’s one factor to have hurdles as a lady, however these hurdles are even larger for girls of coloration,” she says, grateful she didn’t encounter these hurdles in elevating $7 million for her personal startup.

Ladies serving to ladies

Elsewhere in Maine’s startup ecosystem, Maine Enterprise Fund has quite a few women-led corporations in its portfolio with plans so as to add extra, in response to the fund’s new funding supervisor, Nina Scheepers, a former Unum product supervisor.

“Whenever you take a look at returns, women-founded startups, or a minimum of startups which have various illustration, return extra greenback per greenback of funding to their buyers,” she says. “Analytically, you’ll wish to be funding extra ladies as a result of these companies are returning higher capital.” Her tip to capital-seeking entrepreneurs: “Speak to us early.”

The identical goes for Karin Gregory, co-founder and managing associate of Biddeford-based Blue Freeway Capital, who urges feminine entrepreneurs to achieve out to feminine buyers. Gregory notes: “As Madeleine Albright as soon as stated, ‘There’s a particular place in hell for girls who don’t assist different ladies.’”

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