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See also:
Women Business Owners: Part One ... Clout
Women Business Owners: Part Two ... Credit
Women Business Owners: Part Three ... Technology
Women Business Owners: Part Four ... The Internet
Women Business Owners: Part Six ... Capital
The search for startup equity capital has always been agonizing for both men and women aspiring to launch new ventures. There is little solace in the cynical and often accurate observation, "There are plenty of fine institutional sources of venture capital -- if you really don’t need it!"Fortunately, there are an increasing number of venture capital sources -- both private and public -- now serving the demands of women-owned businesses. Let’s look at some creative examples of these resources.
The Ewing Marion Kauffman Foundation in Kansas City, Missouri, has established the Center for Entrepreneurial Leadership, Inc. (CEL) The Center provides comprehensive assistance and training for the startup of sound new businesses. For example, on a small scale, MADE-IT (Mother and Daughter Entrepreneurs in Teams) is an innovative training and mentoring program providing mother/daughter teams with the knowledge and skills to develop a business feasibility plan and launch a sound business. Premier FASTTRACTM is a complementary program designed to help entrepreneurs identify and screen business opportunities, define a target market, establish budgets and plan for resource needs; participants receive one-on-one counseling with their business plans, learn about business resources in their communities, and complete the program with an achievable plan for starting or growing their business. The Center administers FASTTRACTM in five contiguous states, and has packaged the program for dissemination nationally now making it available in 31 states.
The Kauffman Entrepreneur Intern Program offers matching grants to colleges and universities to develop or expand entrepreneurship education initiatives in which students work with entrepreneurs and learn about the challenges and rewards of entrepreneurship. Through internships at the Center for Business Innovation in Kansas City, Missouri, the Kansas Technology Enterprise Corporation in Topeka, Kansas, the Massachusetts Institute of Technology and The Battelle Institute, graduate students have gained firsthand experience in a variety of startup and emerging firms.
Pine Manor College in Chestnut Hill (Boston), Massachusetts, offers an imaginative one-year Certificate in Entrepreneurship program for busy women to master the fundamentals of business startups and management; this program concludes with each participant writing a business plan and competing for a $2,500 venture capital award for the winning business plan. Pine Manor is one of 23 colleges or universities and three non-academic organizations awarded grants for these programs by the Kauffman Foundation.
The Center for Entrepreneurial Leadership (CEL) also established a $3.0 million equity fund in October 1994 with Capital for Entrepreneurs, Inc., the venture capital affiliate of the non-profit Center for Business Innovation (CBI) to foster women-owned businesses as well as Afro-American and Hispanic businesses in a seven-county area contiguous with Kansas City. Equity investments can be made up to a maximum of $300,000 per venture. Proposals are evaluated by a professional team, but actual investment decisions spring from the recommendations of an Investment Committee composed of seven noteworthy women in business (volunteers). The dividend and capital gains earnings from these equity investments in women-owned businesses are to be rolled-over and re-invested in new women-owned enterprises.
A different kind of resource is Women Incorporated (WI), a membership organization founded in early 1995 in Sacramento, California, by Lindsey Johnson and Judith Luther Wilder to facilitate the availability of credit and capital (and other ancillary necessities) to women entrepreneurs. Through a national financial network embracing The Money Store, Banc One, Bank of America, BankBoston, Chase Manhattan Bank and other financial partners, WI members have access to a multibillion dollar loan pool.
WI’s financing network is complemented by a national technical assistance network. Access to capital is the organization’s outstanding strength enabling qualified members to be referred to a continuum of financial assistance ranging from micro-loans of $500 to loans and lines of credit up to $5.0 million. WI also offers access to preferred sources of equity capital.
The continued examination of sources of equity capital for women-owned businesses will be the focus of our subsequent column.
Your comments and suggestions for these pages are most welcomed!
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Revised: April 20, 1998 TAF
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