Estrogen-Fest!

I went to two women-focused conferences this last week, the Women’s Private Equity Summit and the UC Berkeley Haas School of Business Women in Leadership Conference.  Both events were great and there were about 400 experienced professional women at each; 800 women in two days is about 50 times more than I get to interact with in the average 5 years in my business, so they were great experiences and well-worth the time.  If I interact with even one woman in my average workday, aside from my very capable and wonderful assistant, it is pretty unusual.  Lisa Stone, CEO of BlogHer and a participant in my Haas Women in Leadership panel called “Navigating the VC Process,” said it well, “the VC world is one inhabited by middle-aged white guys with extreme side parts and degrees from Harvard, Wharton, and Stanford.”  As Charlie Sheen would say, “Duh, winning!”

I am puzzled why men fail to attend these high quality women-dominated events (if I failed to go to male-dominated events I would never leave the house).  For one thing, if you’re trolling for chicks, what better place to do it than an event where you are the only guy? Granted, a large number of the potential targets at a private equity conference are middle-aged moms, but so are Halle Berry and Brooke Shields, so you never know.   There was actually one man in attendance at my Haas panel; he may well be the smartest man in the world, or at least the most strategic thinker. Not a single man attended the women’s private equity conference who wasn’t involved in the administration of it.  I’m telling you, it’s a missed opportunity.

The other reason why I am surprised more men don’t attend women-dominated conferences is that the content at these professional women’s events is better than most other conferences.  You get different speakers than the same old, same old and women are just neurotic enough to really overshoot the goal and make sure these things are great.  Christina Romer, former Chair of the President’s Council of Economic Advisors keynoted the Private Equity Summit. The Haas conference keynoters were Heather Mason, President of Abbot Diabetes Care, Eileen Crain, CEO of Domaine Carneros and Nancy Mahon, Executive Director of the M.A.C Aids Fund.  They are first class professionals and I have never seen a single one of them on the dais at any conference I have attended.

In marked contrast to the usual events I attend, there is a line at the ladies’ room at these two—their only drawback.

My panel at the Haas conference featured four sharp women (Edye Bauer, Partner at Mintz Levin; Lisa Stone, CEO of BlogHer; Rebecca Lynn, Partner at Morgenthaler Ventures; and Sharon Vosmek, CEO of Astia) was focused on helping entrepreneurs understand what VCs are interested in, how to network to them and how to work with them.  It is an important topic for women to understand because they get less than 5% of all venture capital funding, according to the Center for Women’s Business Research.  Despite this, women own 41% of all privately held companies in the U.S. It cannot possibly be that all of those companies aren’t legitimate venture capital investments.

Some people say that the reason women CEOs don’t get backed is because there are too few women VCs (they make up about 7% of VC partners, according to Sharon Vosmek).  But that is a really bogus response.  It is a complete fallacy that only women investors would want to back women CEOs.  VCs are looking for a great team, great idea, great market opportunity and great execution.  Believe me, if any halfway decent VC thought they could make a buck from someone else’s idea they would happily do so, regardless of whether or not they wear a bra (the entrepreneur, I mean; not the VC).

Unfortunately it’s not getting any easier for women to get venture capital just as it isn’t getting any easier for anyone to get venture capital funding.   2010 was the slowest year since 2003 for venture capitalists raising money for their own funds.  According to the National Venture Capital Association (NVCA), venture funds raised $12 billion in 2010 as compared to the industry peak of $36MM in 2007.  Why this matters is that it means there is less available cash for venture capitalists to invest, exacerbated by the fact that there are fewer firms for entrepreneurs to turn to for venture funding.  Currently there are around 790 venture firms, down from 1800 firms in 2001.

However, there is some room for optimism.  In 2010 VCs invested $22 billion in 3277 deals, up from $18 billion in 2009.  VCs are starting to hear rumblings of a return of interest among their own investors.  Going into 2011 a survey done by the NVCA showed additional positive news.  51% of VCs say that their investments are likely to increase.  Granted, that is just barely a majority, but it beats the alternative.

So what is the greatest barrier to women getting a reasonable piece of the venture capital pie?  Speaking on my panel yesterday at Haas, Sharon Vosmek said that women are their own biggest barriers to success because they make two critical mistakes.  First, they have a tendency to undersell by underestimating their market potential and understating what they personally have accomplished.  Second, they don’t do enough networking with the people who have the money, the aforementioned white males with extreme side parts.  Sharon eloquently described how women stick too closely to their own female networks, shy away from the places where the guys congregate to talk money (or sports) and forget to mix business with pleasure.  If you’re standing on the sideline of the kids’ soccer match with a VC target, don’t talk about the school auction, talk about your go-to-market strategy.

In other words, by forging new networks and being unafraid of hanging with the guys on their own terms, women make critical contacts that lead to money.  And by finding their confidence to self-promote and paint a broad vision of their opportunity, women can lead investors to water and make them want to drink.  Rebecca Lynn added, “it’s the George Costanza thing…women have to do the opposite of what comes naturally.”

For those who don’t get the reference, there was an episode of Seinfeld where George realizes his life is miserable and every decision he ever made was wrong, so Jerry encourages him to try a new tack, saying, “if every instinct you have is wrong, then the opposite would have to be right”. George then resolves to start doing the complete opposite of what he would do normally.  As a result, he gets lucky, gets a job with the Yankees and has a new sandwich for lunch.  If it can work for George, maybe it can work for female entrepreneurs!

httpv://www.youtube.com/watch?v=cKUvKE3bQlY