Women Entrepreneurs Rise Up in MN
Avoid the #ValleyOfDeath. A message heard loud and clear during the February 17 second annual MN Cup Women in Entrepreneurship Conference at the University of Minnesota Carlson School of Management. MN Cup, now in it’s 11th year, supports emerging entrepreneurs across the state through events, educational programming and an annual new venture competition. They help entrepreneurs by providing tools, resources and support through a network of mentors to guide them on their startup journey.
It is a journey. In a room filled with 300+ women entrepreneurs, there was a definite sense of openness conveyed by the presenters through the insider info they shared and the attendees who boldly asked questions and sought resources and answers. The 12:30-6:00p.m. program included a full-group discussion on financing followed by two breakout session panel discussions with a keynote at the conclusion. And of course, ample time for networking before, in between sessions and after.
The financing panel of Cathy Connett, Maia Haag, Katie Jasper and Chris Mahai, began with a overview of the research and development tax credit and angel fund loan program. This context set the stage for opportunity in Minnesota. $15M (up from$12M last year) is available in 2015, $7.5M of these funds are reserved for minority and women owned businesses through September 30, 2015. These businesses are not necessarily high tech centric as MN Cup has opened more doors for additional focus areas like food/agriculture/beverage (recently creating a food innovation program) in their annual competition.
Cathy dove right into her first slide, which included the #ValleyOfDeath (where most businesses fail) and its place in the top left of the funding chart in the high risk and entry intersection (coinciding with the Friends and Family Funding or FFF). The low risk (or proof of concept) and mature stage businesses live on the opposite side of the spectrum. She walked us through past and current landscape of business financing across FFF, angel investors, venture capital, private equity and public equity, noting angels tallied $71M with an average deal of $350,000 and VC came in at $368M with an average deal of $7.2M in 2014 in Minnesota.
As any good panel does, the women panelists represented diverse backgrounds, a wealth of knowledge, different perspectives and relatable case studies. Maia, co-founder and president of I See Me, the largest publisher of personalized children’s books in the world, shared her story highlighting her strong relationship with her banker and the importance of asking for support in small increments in the beginning and building that trust.
Katie, co-founder and CEO of Prescribe Nutrition, an interactive, virtual whole food based nutrition education company, relayed her insights and experience having completed a $40,000 reward based crowd funding campaign through Indiegogo in September 2014. There was brief discussion about MNvest, which introduced crowd-sourced equity funding via the internet as an option in Minnesota. Katie noted the advantages and challenges of their approach citing the importance of transparency with their 285 contributors and the fluidity of getting insight and developing their community of support and demand for their service early in the process.
Chris, managing partner of Aveus, LLC, an investment company, and author of ROAR: Strengthening business performance through speed, predictability, flexibility and leverage, brought depth and insight to attendees through her lens as an investor of women-owned and led businesses. She gave an example of the too-often seen women ask of $100,000, where a man would ask for $1M, citing that women have come along way since 1998 when 98% of all startup funding went to men, but women still need to be more assertive in their asks.
Chris also touched on structuring your financing and what to anticipate during different phases of business development. Throughout the session, panelists commented on the role of an investor, most agreeing that investors should not be involved in management but could be involved in governing and advising. A reality check – investors want a high return and expect that if your business succeeds, they can come along for the cash flow ride. They don’t view their investment as a loan.
At this time, attendees headed to one of two breakout sessions. 1. Communicating Your Value or 2. Leveraging Your Network. I attended the latter, featuring panelists Christina Cackoski, Senior Financial Analyst at Target; Anna Klombies, VP of HR at SportNgin; Lili Hall, founder and CEO of Knock, inc.; and Pamela York, founder of Atasi Ventures. These influencer-type women shared their networking practices, approaches and results.
I appreciated how candid and open they all were. They were willing and available to help in mentor roles, encouraging people to just be direct in what they’re asking for. Do your research before you approach someone so your ask is reasonable, even if bold. I thought back to Chris’ Madeleine Albright quote from the first session that had loosened up the audience, “There is a special place in hell for any woman who won’t help another woman.”
The panelists covered canvasing-type networking (Pamela) to being deliberate in three types of networking (see Anna’s reference to Harvard Business Review and my recap of the U of MN’s recent networking study both outlining strategic, operational and personal network types). Lili talked about building your brand and messaging across the board in a very consistent way so that you as the business owner aren’t the sole owner of brand and you can delegate as your business grows (recommended read: Made to Sell).
Just before 4:00, the full group reconvened to take in keynote Ann Winblad’s wisdom. Ann is the co-founder and managing director of Hummer Winblad Venture Partners and a software industry entrepreneur, investor and technology leader. With a slideless, story-driven presentation, the audience seemed to be hanging on every word, term and nugget of advice Ann shared. Like the term Unicorn as it relates to investments and the quest to discover companies valued at $1B+ first devised by Aileen Lee, founder of Cowboy Ventures (see the related article by TechCrunch).
Ann shared insight on business structures investors seek and how location plays a role from Malta to Stockholm and Austin to Boston. The audience probed deeper, “What needs to happen in the Minnesota investment market to make us competitive?” To which Ann cited anchor tenants (large global companies), scalability (as in workforce) and a rising entrepreneur ecosystem, noting that change is in process in Minnesota with concepts like Google Entrepreneur’s selection of CoCoMSP as one of nine North American hubs.
Aside from accessing the startup community in Minnesota, as an entrepreneur, you might need to hop on a plane to find your people. She highlighted some tactics for beginning businesses including diving in early via crowdsourcing (if an option), engaging with technology to learn from your early adapters and supporters, letting people rip your idea apart (look for challengers vs dependable supporters), meeting new people outside of your industry and asking, Am I thinking big enough? After sharing her story about a personal encounter with Bill Gates in 1988, who shared with her his vision to build a company worth $500,000 when others in the field weren’t even near $100,000, she left us with the empowerment to seek truth, surround ourselves with challengers and make bigger asks.
MN Cup 2015 opens on March 23, 2015. Ladies, who’s ready?