Did you know that less than 3% of venture capital funding goes to companies with female founders? I didn’t, until I had the chance to photograph my client June Manley for her next big project. I’ve been so honored to work with June over the last few years. She is a passionate entrepreneur and industry thought leader with over 15 years of high-tech experience at companies like HP, Citrix, Riverbed, and NetApp. When she came to me for photos and videos to promote her new organization, I was more inspired by her than ever.
After her experience seeking funding for her own startup, Phala Data, June learned first-hand the extent to which VC Funding is not as available to women as it is to men. Never one to sit on the sidelines, June was inspired to do something to fix a broken system. June founded Female Founders Faster Forward (F4 Capital), a non-profit with 501c/3 status, in 2017 to address gender bias in venture capital funding. Their immediate goal is to increase the VC investments for Female led startups from 3% to 20% by 2020.
I’m thrilled that we had a chance to talk with June about this important work. I hope you enjoy our conversation and take the opportunity to support F4 Capital however you can!
-Nancy
NR: What surprised you when you started your first company, Phala Data?
JM: There were a few surprises when I founded Phala Data – a big data analytics software startup. The positive ones were: I thought getting a product developed from an idea in my head was going to be a challenge, but not only did I successful get the product developed, I was able to file six patents along the way. I thought getting my first customer was going to be a challenge but ended up with a Fortune 50 software division with over $3 in revenue.
The negative surprises came when I began seeking venture capital funding. It wasn’t the rejections that were the surprises, it was why I was being rejected. The reasons that I had no control over, it was not because I did not have a viable product in a massive market, it was not because my investor pitch needed improvement, it was because I was a female founder without the right social connections. What surprised me most was less than 3% of venture capital funding goes to startups with female founders. In 2017, nearly $84B was invested in startups, again only 2.2% of the investments went to startups with female founders.
NR: Did you receive venture capital funding? What was is like to try to get
funded?
JM: No, I did not receive venture capital funding. I bootstrapped my startup all the way through product development, first customer and filed six patents. I walked away after I realized that unless I was willing to bring a male counterpart to the VC meetings I wasn’t going to get the funding. That was not how I wanted to get VC funding. If they did not believe that I could bring a product to market, without a male co-founder then I didn’t want their investment.
NR: Without venture capital funding, what options do startups have to establish and grow their companies?
JM: Without venture capital funding there are limited options to establish and grow your startups. According to research conducted by the Kauffman Foundation 80 percent of female founders used personal savings as their top source of funding for launching their new startup. Women go broke, even bankrupt, trying to bring viable enterprises to market. It shouldn’t and doesn’t have to be this way. Imagine the startups that get left behind due to lack of sufficient funding. They represent lost opportunity, unrealized, positive financial impact, possibly paradigm-changing solutions that died on the vine. These ventures could have changed an outcome in a person’s life, a business, an industry, an economy.
NR: What advice do you have for people who have want to start a company but
don’t know if their idea is viable?
JM: I would suggest leveraging a tool like Business Model Canvas or start
with the questions below to guide your thinking.
1. Who is your customer? For example, if your customer is businesses,
answer: What kind of businesses? How big or small is the typical
business? In a particular market? What is the title of the buyer?
2. What problems are you solving? How does your product solve those
problems? How does solving their problems make their life better?
Does it make them more money? Look better?
3. What are the key features of the product? The features need to solve
specific problems. The more quantitative (e.g. time saved, money
made), the better.
NR: What inspired you to start Female Founders Faster Forward?
JM: Last June when I was reaching the end of the runway for Phala Data,
and I had to shut down the operations and the development effort, I was at
the lowest point in my career. I was looking through a presentation that I
did for the SBA’s Innovation & Investment Office Director back in March 2017, I had a used a tagline: Female Founders Faster Forward. It dawned on me that I had to change how startups got funded. I had to be part of the solution that increased the current 3% of venture capital funding to 20% by 2020.
NR: How can we support the work F4 is doing?
JM: F4 represents the struggles of female and all under-served founders
being systematically shut-out of venture capital funding—not because of
their startup investment viability, but because of their gender, race and
social economic background. F4Capital was founded specifically to help
change the current, archaic, venture-investment model and to help deliver
more venture capital to female founders. Our Startup Investment Model
Index (SiMi) effectively measures startup maturity, opportunity, and risk,
while eliminating bias and prejudice in prevailing venture-funding
processes.
In the simplest of terms, SiMi is like a FICO Score® for Startups. Much like
the impact of the FICO Score on consumer lending, SiMi assesses,
informs, and empowers startup founders on venture investability—outside of gender, race, or other identities. By focusing purely on the state-of-the-startup, SiMi also facilitates smarter investing. Using sophisticated data and analytics driven by artificial intelligence and machine learning, SiMi delivers entirely new levels of funding transparency and benchmarking, creating entirely new positions of funding for under-served founders, whether women or other minority groups. Our effort is not about personal profit. We created SiMi to literally disrupt and revolutionize startup funding, so that more qualified startups succeed, whether founded by women or not. As such, we organized as a 501c3 non-profit.
You can help get SiMi developing by donating today.
NR: You’re an incredibly dynamic person, what do you do to maintain your
energy?
JM: Thanks Nancy. My family and friends have been tremendously
supportive in my journey as a female founder and in leading the effort to
increase the investments for startups for female founders from 3% to 20% by 2020. When you have an ambitious 10-yr old daughter who wants to be an entrepreneur, an innovator and a future female founder, you find the energy to be part of the solution that paves the way for the next generation.
NR: What are you currently reading?
JM: Educated: A Memoir by Tara Westover
NR: Thank you so much, June!