Calling All Smart, Connected Women: Investing in Entrepreneurial Companies is Good for You and the World!
This past week, I joined 5,000 women in Washington DC to imagine a new world for women. Sponsored by the White House, the United State of Women Summit was an eye-popping, star-studded event of epic proportion. The line-up of speakers included the President and Michele Obama, Billie Jean King, Oprah, Jessica Alba, Amy Poehler, Shonda Rhimes, Gloria Steinem, and Patricia Arquette, to name just a few. It was exciting and awe-inspiring. I was thrilled to be included as a speaker, sharing the vision and goals of our company, Portfolia.
But the true measure of this Summit isn’t the number of eye popping celebs (as cool as it was!) but its ability to bring us together to rapidly increase the pace of change for women. How do we work together to create the world we want? Each session was filled with high energy women leading massive change agendas. But for these audacious visions to become reality, the energy must move beyond these 5,000 women to 50+ million women. And it begins with us speaking our visions:
At Portfolia, we believe the world will shift when women use their money and influence to green-light the entrepreneurial companies, products and innovation we want in the marketplace.
(You may be thinking: OMG!! Investing in entrepreneurial companies? I don’t know how to do this. I hate spreadsheets. I don’t even open my investment statements. Don’t I need an MBA? Do I have time? Could I really do this?— Stick with us — We’ll come back to the ‘how.’)
There are five ways you shift the world when you invest:
1) Your priorities decide which new companies, teams and products get funding and come to market. When women make these decisions different companies are selected. 90%+ of entrepreneurial investors are men, and –no surprise — 90%+ of their investment dollars go to other men, solving problems that men are most aware of. No foul here, it’s just how it works.
When women make investment decisions, they are more likely to select products and services that speak to them, to a gap in the marketplace, to their needs, and that of those around them, business or personal. If we want funding going to the products and innovations we seek, we need to be putting a small amount of our investment dollars behind companies we want in the market.
2) You shift ‘The Ick Factor,’ which determines what investments are NOT made. This is the reverse of the first point, but important enough to stress separately. What companies and products DON’T get funded because they make the traditional guy investor uncomfortable? Again — no surprise — what turns off men may be exactly what you would love to have in the marketplace.
For example: A few years ago, I saw a presentation for an amazing new breast pump. I was captivated by the team and technology, as was every woman who saw it. I was shocked when I heard that they had been turned down by a number of investors, so I talked to a few of them. This is when I discovered a very technical investing criterion that I have since named “The Ick Factor.” Though it was a radically better technology in a huge market, it made the guys feel ‘icky’ because they were embarrassed and uncomfortable talking about breasts in this context. (Really, friends, you don’t need to be intimidated by the level of analysis here;-)
I’ve since discovered many ‘Ick Factor’ companies — in women’s health, reproduction, plus-sized clothing, active aging, caretaking — and these companies are some of our very best investments. We all have our ‘Ick Factors’ though. Mine? I passed on Bang with Friends, which had some top male investors lined up to back them.
3) You know markets, products and people — the trifecta of analyzing entrepreneurial investing. Years ago, when entrepreneurial companies were almost entirely made up of huge computer systems and hardware sold to the government or Fortune 100 companies, men engineers were understandably the investment gods. Today, the majority of companies gaining early investing dollars are consumer facing or business services sold below the C-suit. Women, we own this world, and it’s time for us to take our rightful place as investment mavens.
Women buy 80% of all products in the US, and are the majority purchasers in nearly all major categories except big screen TVs (note: only men buy TVs larger than their bodies). We know the brand players, the competitors, the market gaps, competitive advantages, pricing and channels.
And in the most important space of evaluating people and teams, there is a world of data showing that women are actually better in evaluating individuals, seeing through hyperbole, and understanding the context, connections and disconnections in and among teams. Early entrepreneurial analysis is not about reams of spreadsheets, but about people, markets and products. Women, we get this.
4) Your knowledge and networks add value to our companies, as market-makers and connectors. A key premise in investing in entrepreneurial companies is being able to add value beyond your money. As we discussed, the majority of companies seeking private investment dollars are now focused on tech-enabled consumer markets. The majority of consumer purchase decisions are impacted by virality, networks, influencers, and word of mouth. Again, we own this world.
Women are more highly networked, more active on social media, and are deeply engaged in sharing products they like and companies we believe in. We’re more likely to try new products and services and share the ones we like. We’re also more likely to provide the feedback loop from other important customers.
This is why we at Portfolia like to maximize the number of smart investors in companies. And smart entrepreneurs would rather have their influencers buy into them as investors, rather than take more traditional investor dollars, give up more ownership in their company, then attempt to buy their markets through major advertising and marketing expenditures. Women, we are high-value investors.
5) You create wealth, jobs and opportunity by backing young entrepreneurial companies. It is estimated that if women-led companies providing new products, services and platforms were adequately funded, they would add $30 billion dollars annually to the US GDP. There are so many gaps in the marketplace that just aren’t being addressed by the traditional finance world. By selecting and backing those companies we want in the marketplace, led by women and men, we create wealth and opportunity for ourselves, our families, our interests and our economy.
Certainly you can and will lose money investing in entrepreneurial companies. But over time you invest across a variety of companies to create wealth and opportunity. It can be financially rewarding, and it’s exciting to back teams that are on-fire to create new products and services. This is why men have invested in entrepreneurial companies for years.
For generations, our accepted roles were as volunteers and philanthropists. This is still important of course, but investing in the innovation economy is good for society, for the economy and for you and your family. Taking risks with a small amount of your investable assets (less than 5%) to create wealth and opportunity can be smart and impactful. In fact, you and your family can become entrepreneurial investors together, in your areas of interest and passion. We’re the kinder, gentler, more respectable version of Shark Tank. We nourish our entrepreneurs, not consume them.
Finally, we’re at a truly historic time. For the first time ever, in any culture, women in the US own half of all wealth. We can now create investing processes and cultures that work for us. It’s our time.
We know that investing in companies we believe in can be an exciting and empowering process, as well as enriching. Now let’s talk about HOW you can begin investing in entrepreneurial companies in a way that works for you.
At Portfolia, we set out to design an entrepreneurial investing experience that would be enjoyable, empowering and enriching.
Here’s how it works:
- We offer Annual Entrepreneurial Venture Funds, each with a community of 99 investors, focused in a specific field or industry, for a minimum investment of $10,000.
- Each fund is advised by an experienced cadre of Lead Advisors who identify and recommend top company investments nationally. While committed to guiding the fund, the Lead Advisors are also committed to sharing their knowledge and expertise with you and the wider community.
- Each fund invests in 6–10 high-potential U.S. based entrepreneurial companies over a 12-month period, quickly providing a diversified ‘Portfolia’ of entrepreneurial companies.
- We invest the funds on your behalf, but you have an opportunity to be involved in the full process: viewing pitches, asking questions, making recommendations and attending key events and learning modules, joining due diligence teams and success teams after the investment.
Each Portfolia Fund is a virtual learning laboratory for entrepreneurial investing. Offered in a collaborative and supportive environment, we share our knowledge and experience as we invest our members’ funds, so that you also grow and develop as you invest. We believe a transparent, open and collaborative process makes us each more successful. We also know that we have different demands at different times in our lives — you are welcome to be as involved or removed as best works in your life and schedule.
Our vision is 100,000 women investing annually — $1.7 billion — backing companies we want in the marketplace, and helping them succeed.
And when our companies win, we all win together.
This is how we activate the energy of 5,000 women, and spread it around the world to hundreds of thousands of women.
This is how we focus our creative economic energy in a new way.
This is how we shift the world.