Updated August 2015 Plum Alley Articles
August focus: “Women Investors and Entrepreneurs on AngelList”
Deborah Buresh Jackson ‘80BUS
A former Wall Street investment banker, Deborah Jackson now concentrates her efforts now as an entrepreneur and on building female achievement through entrepreneurship. Ms. Jackson is truly a key driver of the entrepreneurship community in New York City and a champion of women entrepreneurs everywhere. She is a member of Golden Seeds, an angel investing network, and the Founder and CEO of Plum Alley an online site which connects women entrepreneurs with capital, markets and advice. You’ll also find Ms. Jackson’s bio among the founders list on the Women Innovate Mobile Accelerator website. WIM is the first startup accelerator to focus its investment strategy on mobile-first female led startup ventures. Ms. Jackson has been recognized in Fast Company, League of Extraordinary Women and in Forbes, Women Changing the World. Ms. Jackson received her B.A. from Michigan State University and her MBA from Columbia University School of Business.
July, 2015 Deborah Jackson – Columbia Entrepreneurship Interview
Built by Women, Catering to Women, Positioned for Success
Near the end of May, Plum Alley founder Deborah Jackson ʼ80BUS posted her take on a story published in Re/code entitled Tech Women Choose Possibility by Sukhinder Singh Cassidy, the Founder and Chair of Joyus. See our mention of this article in the June issue of the Columbia Entrepreneurship newsletter.
The Plum Alley team did a great job of adding to the power of the communication by creating a set of infographics. See the post here.
Among the startup community there is a sense that a set of new, refreshing, reality-based perspectives are emerging that may help smooth the path for more women to succeed in entrepreneurship by attracting more resources, attention and importantly investment. There is still a long hill to climb.
To delve deeper into the topic, we asked Deborah to conduct an online interview with us. Her responses are below. We’re happy to forward your thoughts, comments, and questions on to Deborah just email us at firstname.lastname@example.org and we’ll send them along.
Columbia Entrepreneurship (CE): Thank you for all that you do for the University and for women in entrepreneurship here in NYC. We appreciate you sitting down with us, via email, to conduct this interview. Let’s get started. Can you think of a specific instance or past experiences that drove you to create Plum Alley?
Deborah Jackson (DJ): I founded Plum Alley because I see women entrepreneurs and women in technology creating formidable companies. I believe these businesses represent many of the best opportunities for investment and innovation around today. The rate of growth of women becoming entrepreneurs and entering the startup landscape is far outpacing their male counterparts. Women already represent nearly half of all business owners in the US.
Most of the media attention and conversation around women entrepreneurs focuses on the negative–the disparity in funding and lack of women in senior positions at venture firms. If you look at the studies and data, it is true that female-founded companies do receive far less attention, funding, and validation. I have the vantage point of seeing quality companies founded by both men and women and I can say that the fresh ideas and companies that women bring forward are under recognized. I see an untapped market and boundless possibility.
My perspective comes from knowing the ins and outs of startups. Being in the trenches has exposed me to hundreds of companies and cutting edge ideas. I have screened hundreds of companies for investment and for participation in the mobile tech accelerator I co-founded four years ago. I judge start-up competitions at universities and industry events. I have two decades of expertise in raising capital for new entities. I also have first-hand experience as an entrepreneur myself having founded a company that builds and uses technology to achieve our goals.
My company, Plum Alley, focuses on women entrepreneurs and those companies with diverse teams. We are a business that offers tangible ways for great companies to raise capital without giving up equity. For many entrepreneurs we provide the tools and platform that helps them raise that first money to gain momentum, sales, and proof of concept to go further up the capital chain.
I choose to focus on the bright spots and actions that can be taken to provide broader access for worthy entrepreneurs and a new class of investors. I see innovative companies with enormous potential founded by women that offer new products and services for a mass market that are transforming business as we know it. Many of these companies focus on the female customer who controls spending for products and services for herself and the family.
CE: In a recent post on Plum Alley’s blog, you talk about the gender-investment gap. In your opinion, what are the top one or two factors that explain this gap? Why do female founders get the short shrift?
DJ: I have been in the capital raising game my whole career. First on Wall Street when I worked with entities raising capital in the public markets, and then in the last five years, in the world of angel and venture capital for early stage companies. My observation is that a small number of men with a similar profile have influence and control over what gets funded.
My company did our own research to validate the data about the disparity in funding. We looked at 2014 year end information about the companies funded by the top 15 VC firms because they dominate the field in early stage funding. What we found is that 86% of the dollars were given to companies with all male founding teams, and a paltry 4% went to companies with all female founders.
The flow of capital is like a water faucet and when you have a small number of people controlling the flow and deciding which companies get life sustaining capital and which do not, there are huge implications. When the funding decisions are made by a small number of men with similar backgrounds, perspectives and proclivities, you will see a corresponding limit in support of innovative companies. They will fund ideas, companies, and people that are like themselves and that they can relate to. It is human nature to go where you are comfortable and familiar. But, the net result is that a predisposition or bias exists that is often unconscious, but none the less, it is detrimental to women entrepreneurs. The result of unconscious bias is that tremendous opportunities are not recognized and worse yet not funded. Imagine the ideas and breakthroughs we could achieve if women were fully engaged in the innovation process.
I have observed that women found companies to address issues they care about and challenges they face in their personal lives. Many times men do not appreciate or relate to these endeavors. But, that does not make them lesser opportunities for investment. Consider this: Companies built by women that cater to women are positioned for success. After all, women are not a small or niche market but rather a dominant market. Perhaps even the dominant market. Women by and large run most families and communities. They control the spending for healthcare, food, and family goods and services. Women are social and trade recommendations for products. If you have a product or service of value to women you will have a strong customer base.
Just take Sara Blakely, the billionaire founder of Spanx. When she started, her company was rejected for venture funding because men thought her company had no potential. They thought along the lines of “if we are going to finance lingerie, it is going to be sexy. Not Spanx.” Well, she proved that her women customers want her product.
So for women who found companies that have a product targeted to women, if they are pitching to a room full of men, they are not likely to make the cut. Multiply this situation over and over and you have the underlying reason for the funding gap.
Another factor that contributes to the gender-funding gap is the historical lack of champions for women entrepreneurs. When you look at the media stories of founders the sample is largely men–Facebook, Twitter, Foursquare, Google, Zenga. Media attention turns these male founders into celebrities and anoints them with “star status”. Their investors promote the hype, open doors and talk billion dollar valuations even when they are not justified. All the publicity and attention around male founders creates the impression that successful entrepreneurs are men, that it is a man’s game, and that dudes are building technology, controlling the money, and getting rich. It is a vicious cycle.
In the last year there have been more articles about female founders and technologists but this is new and it is important. When my company profiled women entrepreneurs for their stories and wisdom, our readership jumped. It matters how we write about women entrepreneurs, it matters how we write about women in tech, it matters how we write about who gets funded. We need to demonstrate and showcase the numerous examples of success of women entrepreneurs especially ones that succeed in areas of interest to women.
CE: Getting more investors to support female entrepreneurs is a weighty task. How can you change people’s minds? What’s the first step in doing so?
DJ: Changing minds is hard, but it is the only way.
The first step is to enlighten the thinking with different points of view and broader input. The next thing that needs to be recognized is that women are already creating breakthrough companies but many times they are under the radar. We need to define a new measure of success for companies. The measure of success should not be that a company got venture funding rather that it provides real value to its customers, is an on-going concern and creates jobs. There are noteworthy examples of wildly successful companies that never raised venture capital–one example is Bloomberg Media.
I am deeply optimistic in a way that I was not several years ago. Doors have opened with technology and it is no accident we have the explosion of new entrants that provide capital, media coverage and other resources to women entrepreneurs. Today we have the power of the internet and social networks. Stories and information get out at lightning speed so women can learn at a fast rate, and find other like-minded women. Women with brilliant ideas are finding their inspiration and women with money. Women are also becoming angel investors at a fast rate and founding new venture firms because they see the need for capital in great female founded companies and want to participate in the upside.
CE: Why is it important to have a platforms like Plum Alley to help women — or any target group — raise money?
DJ: Great companies don’t just pop up. They are made with the help of investors who provide the money, status, and connections that are critical for success. When I think about the need for new companies like Plum Alley and new venture funds that provide capital to women entrepreneurs, I can’t help but think of the parallels of Wall Street firms. When I joined Goldman Sachs in 1980 it was a small partnership with a strong history. Goldman and a few other firms were founded by people of the Jewish faith because they faced discrimination in accessing capital from existing institutions. They were forced to found new companies and provide broader access and opportunity. And, these firms excelled. In the past year, some of the most prominent female VCs in Silicon Valley have left the top firms. These women are creating their own institutions, companies, and networks because they have experienced unequal access in traditional firms.
The reality is that men and women are different and it goes way beyond hormones and physique, and that is a good thing. They bring to the table different attributes, values and brain functioning. When innovation is dominated by one group or another you limit progress. A perfect example of the benefit of an open process is the human genome. The code was broken in record time when the pool of people working on it was widened.
CE: Can you share your perspectives on women building technology companies?
DJ: Women are powerful builders of technology; females take their creativity beyond simple functionality. They build applications and technology that make their families and communities better, which improves society at large. I witnessed this firsthand when I hosted the first all-female Hackathon several years ago. The 18 women developers who gave up a weekend to participate chose to take on an issue they knew little about but felt moved to tackle. The women built an interactive game to combat sex slavery over a weekend. I contrast that to other Hackathons I have seen where what I call “blow-em up, beat-em up” mobile games are built.
CE: There is a lot of concern about girls in STEM programs and the lack of women working in tech? Are these issues related to the gender-investment gap?
DJ: Many times people categorize a company that uses the internet for its business as a “tech” company. If a company is not building hardware or software as the core business I would not consider that a true technology company in the strict sense. This distinction is important because a background in engineering or computer science is not essential to starting a many types of companies or being a successful founder. It is misdirected to say that the problem with women entrepreneurs is that they are not majoring in a STEM field. This reasoning can be used as an excuse for not funding more women entrepreneurs.
We always note successful companies that have founders that have no computer science or STEM training. Pinterest and Eventbrite are two examples of billion-dollar valued “tech” companies that have founders whose backgrounds are not what you would expect. The three Pinterest founders have college degrees in philosophy, political science, and history. As for Eventbrite, a brother and sister founding team held these degrees–BA and MA in history and a degree in telecommunications. While it is helpful to found a company with engineering or computer science skills it is not essential.
What is critical is an ability to build and lead a team, sell your vision, and handle the emotional rollercoaster of a startup. Any founder of a company is a risk taker, and that character strength is more important than your college degree.
CE: You’ve taken many young entrepreneurs under your wing, is there a piece of advice to you most often gives to aspiring female founders?
DJ: Don’t give up. If you want to found a company, you can’t stop when the going gets rough. And it most certainly will. The biggest difference between people who succeed and those who don’t rests in your personal commitment and tenacity.
CE: To turn the tables a bit, what is an example of an unexpected lesson or idea that you’ve learned from a young female founder?
DJ: I learn every day from the next generation of women and entrepreneurs. I offer them business and life wisdom and they offer me a fresh perspective and a belief that new things are possible. I am a big believer that the best companies are built by multiple generations. If you look at Google they brought in Eric Schmidt at a pivotal time to lend his seasoned business experience. Facebook brought in Sheryl Sandberg to take the company to the next level. There are many examples of companies where young founders trip up and make mistakes because of their lack of maturity and experience. The next generation has unbridled optimism and naiveté. That is actually an asset, it is just as important as professional skills and the judgment that comes with age and experience.
CE: How can men help to empower female entrepreneurs?
DJ: One of the actionable steps women and men can take to support women entrepreneurs is to join our 1000 Strong membership. The goal of 1000 Strong is to increase the amount of capital to extraordinary women entrepreneurs and at the same time to increase the number of women and men who invest in them. We know that women in the US have $5 trillion of assets un-invested and are ready to be deployed. The research shows that women want to invest in women entrepreneurs and diverse teams and they want to make a return. 1000 Strong is a way to move the needle.
Join 1000 Strong at www.1000strong.com. You will see amazing companies and have a direct way to invest. You can further your values and make a return at the same time.