How can women succeed in business? By making their own rules, says a woman doing just that.
As a female entrepreneur, she’s had to play by the man-made rules of venture capital: keeping quiet, working hard, and knowing that despite how good her business idea might be, the odds of getting funding were always against her.
By 2000, the Canadian-turned-global businesswoman had enough.
After merging her youth start-up consultancy with a $40 million venture fund, and preparing to list on the Toronto Stock Exchange, her new business partners dropped a bomb: they wanted to replace her as CEO, and put a man in charge.
“I thought ‘I did everything I’m supposed to do. I put my head down, I cranked, I built a company with great value, and still it’s not enough’,” Saunders told Noted. “The people that are making the decisions are like ‘I’d rather be in a club with someone who looks like me’.
“I understand that, but I’m not going to join that club anymore, I’m not trying to fix that club, I’m going to go create a new one. And then hopefully we can merge the two together and create a much better world.”
And that’s exactly what she did.
Saunders launched women-only venture capital fund, SheEO, which is expanding out of North America for the first time, with New Zealand as its third market.
The model is straightforward: each year in each market, 500 women “activators” contribute $1100 each, then help to choose five women-led ventures to support. Each gets an interest-free loan of about $500,000, repaid over five years into what’s intended to become a perpetual fund to support women for generations. The start-ups also get advice, expertise and networks of their backers – priceless for women launching an innovative new company.
SheEO grew from Saunders’ own struggle to secure funding for her entrepreneurial endeavours.
She launched her first “quest” company, Activate’97 – which helped under-24 entrepreneurs establish their own businesses – back in 1997. Since then, she says, “I feel like it’s actually getting worse, it’s harder and harder to get funded as a female entrepreneur.”
“And I really don’t think we’re going to solve this problem unless women step forward and start writing cheques.”
Venture capital is a male-dominated world that’s, at best, sexist: 90 percent of workers are male; just four percent of funding recipients are women.
And at worst, it’s plagued by Harvey Weinstein-like behaviour.
That prompted a proposed law change in California to outlaw sexual harassment by investors. The state has already cracked down on such misconduct by real estate agents and landlords.
Saunders says that behaviour “continues to be a huge issue in the venture space”, pointing out that SheEO-backed start-up, Callisto – a sexual assault reporting app – is now considering expanding from college campuses into professional industries, like tech and entertainment, “because there has been so much demand”.
But Saunders isn’t here to talk about badly-behaved men. She sat down with Noted in her Toronto office to discuss why, instead of playing by the old rules, women should be – and are – writing their own.
While traditional capital is busy “chasing unicorns” – usually male-led start-ups that rapidly rake in a billion dollars – the bulk of female entrepreneurs are creating profitable and sustainable businesses, and missing out on investment.
“You have to stand up on stage when you’re pitching your idea … and say ‘I’m going to disrupt this universe, I’m going to be the car company that everybody uses, and I will decimate everyone else in my path’. That’s not usually how women pitch business ideas, right? So it’s really stacked against us from that perspective,” Saunders says.
She adds that when women do have a seriously profitable idea, their business qualifications are questioned – or, as in her own experience, told that a male CEO would make a better leader. “Women have to prove something, whereas men are funded based on their potential.”
Saunders is a big believer that environment influences outcomes – and that cutting men out of the equation will equal greater success for women-led ventures.
“If we were actually surrounded by radical generosity – that’s the experiment here – how differently might you act? Would you dream bigger if you thought everyone was going to say ‘yes’ and be there to lift you up, as opposed to pointing out every single thing you’ve got wrong?”
Prospective ventures are asked how they’re creating a better world. Those chosen so far include an inventor of breathable, non-toxic food wrap, an “empathy toy” to teach student and workplace collaboration, a pedal-less bike that reinvents the walker and wheelchair, and a “community-supported fishery” that enables independent fishers to flash-freeze and sell their catch.
Kiwi women innovators will be the next to benefit from Saunders’ model of “radical generosity”, after business leader and philanthropist Theresa Gattung saw Saunders speak at a conference in San Francisco.
The ex-Telecom chief and My Food Bag co-founder invited Saunders to New Zealand to speak at Gattung’s World Women conference in March – where the newest SheEO market was announced.
“She loved this idea and thought it would fit really well with New Zealand,” Saunders says.
“It is a pretty amazing thing, it’s a very self-sufficient kind of country, right? And then access to export markets is a really big issue, so the idea of bringing SheEO there, finding capital to support local ventures run by women, and then accessing export markets in Canada and the US and all the other countries we’re going to, it’s like the perfect fit.”
With plans to expand to Australia, Mexico and the Netherlands next year, Saunders’ goal is to eventually connect all the markets together “so if you’re in Auckland and you get selected, and you want to export to New York or Stockholm or Mumbai, you plug into the radically generous women in those markets and they take you to market.”
Like any women-only venture, is there a pushback from disgruntled men?
No, says Saunders; in fact, men are sponsoring their daughters and sisters to be activators, with her own brother the first ever supporter, on behalf of his daughters.
And although SheEO is for women only, Saunders says, down the track, she does want all genders to work together on a funding model – as long as it’s one that treats everyone equally.
"I’d like to see a world that was designed by all of us, not just half of us … Searching for the kind of money and support that honours you and how you define success on your own terms, that’s the world that I want to live in, and that’s what we’re building.”
To get in touch with SheEO New Zealand, click here.