I was honored to participate in a panel on July 26th hosted by the City of Chicago Treasurer’s Office and Women Impacting Public Policy (WIPP). The panel topic was “Encouraging Venture Capital Investment in Women-Owned Business.” My other panelists were Emilia DiMenco, President and CEO, Women’s Business Development Center; Samara Mejia Hernandez, Senior Associate, Math Venture Partners; Kaitlin H. Reimann, Co-Founder, uBack; and Cayla Weisberg, Partner, InvestHER Ventures. Our panel was moderated by WIPP President Jane Campbell, director of the Washington Office of the National Development Council (NDC) and former Mayor, City of Cleveland.
The event was kicked off by Kurt Summers, Chicago City Treasurer, who welcomed the over 300 people in attendance and talked about the importance of men supporting women. It was a high energy presentation for an attentive group.
I had a dual role on the panel. I am president, chief investment officer and a founding partner of Ironwood Capital, a private equity firm in Avon, Connecticut that invests in middle market companies. I am also a long-time member and now chair-elect of the Board of Governors of the Small Business Investor Alliance (SBIA), the leading association of lower middle market private equity funds and investors.
At Ironwood, with the inception of our first fund in 2001, we established an objective to invest 50% of the total capital of each of our funds in businesses owned/managed by women and people of color and businesses located in and hiring from low- and moderate-income neighborhoods (our term is “WO/MO/LMI”). We do this while maintaining all other underwriting, due diligence and structuring standards; thus, there is no special underwriting consideration given to any WO/MO/LMI investment, simply a commitment to actively seek out such companies.
As a result the WO/MO/LMI segment of our portfolio performs on a par with our non-WO/MO/LMI segment, which serves as validation of WO/MO/LMI businesses.
We have done this across all of our mezzanine funds which include more than 70 portfolio company investments, and will continue to do it in our fourth and newest group of funds. We believe this is a straightforward and effective way to maintain focus on investing in diverse companies.
Take-aways from the panel regarding what you can do right now to better position yourself and your business with potential investors included:
- Form a diverse advisory board to help guide your business growth.
- Get on a board or nominate someone you know to be on a board. Board members are decision makers. The Small Business Administration has partnered with 17 organizations, including SBIA and WIPP, to increase diverse talent on boards through the ONBOARD program. Go to the ONBOARD LinkedIn group to learn more and get involved.
- Increase your odds – when you need capital, focus on financial sources that have a woman partner or board member. According to a report from the SBA, among 230 small business investment companies (SBICs), gender-diverse SBICs were found to make two to three times more investments in portfolio companies with a female CEO than male-only-led SBICs.
- Join organizations that provide resources, advice and access to people who want women to Wisucceed. These groups may include: National Association of Women Business Owners (NAWBO), Women Impacting Public Policy (WIPP ), the Women’s Business Development Center, and other like-minded groups.
- Seek out angel investor groups, early-stage venture capital groups and growth equity investors that specifically address your funding needs.
- Recognize that there is a tremendous amount of capital specifically earmarked for women-owned businesses. While the playing field may not be entirely level, it’s leveling.