Female Founders Face an Uphill Battle. This Contest Wants to Give them $50K

According to First Round Capital, startups with a female founder or co-founder outperform all-male founder teams by sixty-three percent. Despite that …

Seventeen percent and three percent.

Those numbers reflect the percentage of startups that have a female founder and the percentage of all venture capital going to companies led by women.

Do women just have less interest in entrepreneurship than their male counterparts?

No—quite the opposite, in fact. Last year, the business planning and assistance nonprofit, SCORE, conducted research that showed female-owned businesses have increased by fifty-eight percent, and that women are now slightly more likely than men to start a business.

And women don’t just start companies.

They start successful companies.

According to First Round Capital, startups with a female founder or co-founder outperform all-male founder teams by sixty-three percent. Despite that success, female founders struggle to get funding—but one nonprofit is trying to make a dent in that.

Since 2012, Arch Grants has hosted a competition that provides $50K equity-free cash grants to startups with the condition that they relocate to St. Louis, Missouri. The results are impressive: More than ninety percent of the 134 Arch Grant Recipients are still in business today.

Though the competition is not exclusively focused on any one demographic, the organization is actively working on funding more female founders.

“One of our missions is to fund startups through our Global Startup Competition that are reflective of the community we serve,” said Arch Grants Executive Director Emily Lohse-Busch. “To be clear, we are not doing that to meet some sort of diversity quota. Research has shown that startups founded by a woman—and startups founded by immigrants, for that matter—are disproportionately successful.”

There is a reason for that.

“As a woman, I know I have to work to prove myself from Day 1,” said Megan McKissen, the former director of a startup incubator and now co-founder of communications firm McKissen + Company. “When you have to earn a seat at the table, what you do once you’re at that table has a good chance of being something pretty special.”

While Arch Grants is working to increase the number of female-led startups entering its annual competition, the organization has already funded some of the country’s most exciting female founders.

“Arch Grants helped us establish our business model and move our product into beta testing,” said Nadia Shakoor, co-founder of Argela Ecosystems. “Thanks to them, we were able to turn our research project into a viable company.”

The program has also helped female founders expand their existing startups.

“Because of the funding we received from our Arch Grant, we were able to hire two new account executives that supported our shift into agribusiness,” said Beth Handrigan, co-founder and CEO of Lean Media.

Of course, one organization will not break the glass ceiling that exists in startup world. In 2018, just seven percent of the partners at the top 100 venture capital firms in the country were women.

The barriers don’t end there.

A study by the Harvard Business Review found that the questions investors ask female founders make a difference. The HBR research found that female founders are frequently asked “prevention-oriented” questions around safety and responsibility, while male founders were more often asked “promotion-oriented” questions about hopes, goals, and achievement.

In other words, investors ask women questions about what could go wrong while asking male founders questions about what could go right.

It’s a process that lends itself toward biased funding decisions.

It’s also a process that drags down the economy by leaving talented, high-performing female entrepreneurs starved for capital.

No single organization will solve a problem that is ingrained in a society. However, collective action from several investors, VC firms, and organizations that support entrepreneurs will make a difference. In St. Louis, one organization is doing its part by making a push to increase the number of female founders entering its global startup competition.

The prize?

Fifty thousand dollars, a seat at the table, and the chance to do something pretty special.

Related Posts:

  • No Related Posts

Most trendy 2018 technologies unveiled in Chicago and beyond

In five years, the power of your iPhone will be the same as that of an IBM Watson.” New business models in an epoch of transformative growth.

By Xieyang Jessica Qiao

Medill Reports

Today may the slowest day you’re ever going to have during the rest of your life. The pace of change tomorrow will be faster than the pace today.

Chicago’s burgeoning VC opportunities and tech scene

An entrepreneurial spirit, fueled by investors who bet big on the city, is driving Chicago’s tech startup scene. According to the 2018 Chicago VC Ecosystem report, the city continues to outperform other U.S. venture ecosystems – including Silicon Valley – in terms of median multiple on invested capital (MOIC).



“You look at all the dollars that have been invested in these startups and compare that to how many dollars have been returned to liquidity,” said Elizabeth “Betsy” Ziegler, chief executive officer of 1871, a Chicago-based tech incubator. “Chicago has the highest median MOIC.”

Another metric to weigh Chicago’s VC prowess is exit valuation, which estimates the proceeds when an asset or business is sold. In addition to being at the top of the MOIC heap, Chicago is the nation’s leading cities for exits, producing a tenfold return on investment (ROI).

“If you look at the exit values of all these companies that had gone public in cities outside of Silicon Valley, Los Angeles created the most value in the last five years at $30 billion,” Ziegler said during the ABA TECHSHOW 2019. “Chicago created $15 billion – [followed by] New York, Boston and Austin. But $20 billion created in Los Angeles was from the Snap IPO.”

Ziegler said Chicago continues to invigorate support for entrepreneurs. When 1871 was founded in 2012, it was the only startup hub of this kind to serve and graduate entrepreneurs. Now, over 100 organizations in Chicago define themselves as incubators and accelerators.

“It’s exciting that we live in exponential times now,” Ziegler said. “But we need to remember that what got you here is not going to get you there. The rate of change is accelerating. In five years, the power of your iPhone will be the same as that of an IBM Watson.”


New business models in an epoch of transformative growth

The largest music company in the world, Spotify, does not produce any of its music. The largest hospitality company in the world, Airbnb, does not own any of its own rooms. Winning business models are evolving beyond services and products.

“These companies don’t own any of their assets, don’t follow any of the rules from the past than any of their nearest predators,” Ziegler said. “This is happening over and over again and at an ever faster pace.”

Since 2000, more than 50 percent of companies in the Fortune 500 have disappeared from the list due to bankruptcy or acquisition. The outburst of new technology disrupts the operating model of an enterprise.

“Every company is a tech company and every company is a data company,” Ziegler said. “What that means is every company has to start to operate like a software company. The rule of thumb is that if the rate of innovation inside your organization is slower than the rate of innovation outside your organization, you are on a downward slope.”

Top technologies and trends to pay attention to

1. The Internet of Things

Last year, a 4,000-mile-long undersea cable that can transmit 160 terabytes of data per second began operation, connecting Spain to Virginia Beach. This Marea cable has enough bandwidth to stream 71 million HD videos simultaneously- 16 times faster than household internet.

Loon, a project undertaken by an Alphabet subsidiary, is a network of stratospheric balloons that sits in the atmosphere. Currently operated in Puerto Rico and Kenya, Loon can be arranged to form one large communications network and bring internet to people who have never used it before.

There is a bit of a race on the satellite front. In February, OneWeb launched the first six of its 648 planned satellites, while SpaceX continues to deliver a constellation of satellites into orbit for broadband services.

“There will be new wealth creation, shift to the middle-class, new consumption group, need for access to education and different infrastructures,” Ziegler said. “When we are able to touch every single person on the planet by the internet, it’s going to be a massive shift that is coming in the next five years.”

The IoT has also fueled the sensor revolution – massive volumes of data from sensor sources are connected intelligently to deliver scaleable results. In Sweden, over 4,000 people have already implanted microchips under their skin.

“People can use microchips to unlock their doors, share contact information or pay for things,” Ziegler said. “In the next three to four years, a trillion connected sensors will populate our world, embedded in everything we make.”

2. A gravitational shift in the future of mobility

Uber is buying up to 24,000 Volvo autonomous SUVs to create the momentum for self-driving cars. Waymo is the first company to get the permit to test autonomous cars without safety drivers. General Motors slashed more than 14,000 jobs, yet doubled down on electric and self-driving vehicles. Ziegler said this new breed of autonomous vehicles will emerge as “rooms with wheels.”

“As cars become autonomous, they don’t have to look or feel like a car,” Ziegler said. “They may look like a game room or a man cave. You will have vehicles you can drive in a completely different way than you do today, and the impact of that on the hospitality and airline industry will be disruptive.”

With the advent of other technologies such as AI, autonomous vehicles that operate like hotel suites on wheels may also make decisions and spend money on our behalves. Ziegler said “know your customer (KYC)” is just as important as “know your machine (KYM).”

“Let’s say you are traveling and you get stuck in traffic and your flight is about to take off,” Ziegler said. “Your car, in the not too distant future, can pay other cars to get out of your way. You give rules to your car and your car can make decisions on your behalf.”

While autonomous vehicles continue to gain traction, flying car projects are also underway. Boeing’s flying car completed its first test flight in January, while Miami is building high-rise luxury condos with landing pads for flying cars.

“With so many people moving to cities in 25 to 30 years, our roads at some point can no longer handle these vehicles,” Ziegler said. “With residences, we move up. With cars, we have to go up into the air or go down. That’s why flying cars and underground Hyperloop networks are happening.”

3. Artificial Intelligence

Sundar Pichai, chief executive officer of Google, said that “artificial intelligence could have more profound implications for humanity than electricity or fire.”

Driven by AI, automatic speech recognition (ASR) and text generation open a new frontier for human performance, allowing for faster and more creative processing of information. Jordan Mizrachi, account executive of Verbit.ai, said the company builds AI technology that incorporates “acoustic and linguistic models” to optimize transcription and captioning accuracy.

“AI is able to reach an accuracy of about 90 percent, which is unparalleled in any other technology,” Mizrachi said.

Reduct, an AI-powered cloud video platform, automatically transcribes any speech in a video uploaded by the end user. It can tag each word to the corresponding visual frame, and users can edit text while watching their videos automatically do the same.

“We’re the first text-based video editor,” said Kyle Wesson, Reduct’s business operations engineer. “The technology leverages human transcription, machine learning and smart algorithms to do precise time synchronization of the transcript to the video.”

AI has a wide breadth of uses beyond ASR. In Australia, advanced biometric facial and fingerprint recognition in lieu of a passport is in the works. Face++, a cognitive services provider in China, allows train stations to match passengers’ tickets to their IDs using face scanning. In the territory of conversational commerce, AI-powered virtual assistant is transforming our relationships with brands.

“AVA, Autodesk’s virtual agent, is an empathic digital human being trained to respond the way a human would,” Ziegler said. “There is no limit to how many conversations she can handle at the same time because she is infinitely scaleable. Google assistant has been downloaded to one billion devices and Alexa got over one million marriage proposals.”

While AI can be coached, one debate is the extent to which AI can learn and develop things on its own, not just repeating tasks that are predictive.

“Can AI create and do things on its own?” Ziegler said. “The answer is yes. Last year, a painting created by AI sold for more than $430K at Christie’s auction.”

4. Robots and drones

Robot farmers developed in the U.K. are able to successfully harvest barley by themselves. In Japan, H.I.S., a travel agency that owns the world’s first hotel staffed by robots, aims to have 100 robot hotels in operation by 2021. Disney Imagineering, the research arm of Walt Disney Company, created a robotic stuntman last year that can catapult into the air.

Companies worldwide are investing heavily in a robotic future. The XPrize Foundation announced last year a $10 million prize, sponsored by All Nippon Airways (ANA), to attract top-notch developers to a four-year global competition. The vision is to develop an Avatar System that can remotely transmit sensory data to the operator in real time.

“Let’s say the robotic Avatar is at the Olympics in Tokyo,” Ziegler said. “If an athlete gives the Avatar a high-five and I’m connected to its system, I will feel the high-five even if I’m staying in Chicago.”

The future is here

In the “most exciting time of our collective lives,” Ziegler said business leaders should consider how to craft market conditions where ideas are generated continuously, act on these ideas, and spread them throughout organizations to make human lives “legitimately better.”

“Lots of people do number one, but they don’t have the mechanism to translate that into actual work and they certainly don’t tell the story and narrate through it,” Ziegler said.

Technological advances spark an unprecedented degree of complexity and ambiguity. Those companies that are the most successful should be the ones most worried about the future.

“Those companies that are the most successful are least worried about the future because they think they are Gods,” Ziegler said. “But for those whose revenues start to be disrupted by new technologies, they are already on a downward spiral and it’s almost too late for them.”

Photo at top: Elizabeth “Betsy” Ziegler, CEO of 1871, gave her keynote speech “The Future is Now” during the 2019 ABA TECHSHOW in Chicago. (Xieyang Jessica Qiao/MEDILL)

Related Posts:

  • No Related Posts

Oyo Rooms plans to tap venture debt route for fresh funding

Oyo recently raised a total of $1 billion in equity in a round led by SoftBank Group Corp. The round saw Chinese ride-hailing giant Didi Chuxing …

Bengaluru: Hospitality startup Oyo Rooms (Oravel Stays Pvt. Ltd) plans to tap the venture debt route to raise fresh funds as it seeks to double down on its Townhouse property vertical in India this year.

The company, which recently raised $1 billion in equity, is in talks with several venture debt firms and some of the top private banks to raise several hundred crores in debt financing, said three people familiar with the matter. The idea is to use the funds to buy properties for Oyo Townhouse, as the company looks to deploy its recently-raised equity for overseas expansion, they said.

Oyo, founded in 2013 by Ritesh Agarwal, is bullish on Townhouse, which was launched in January 2017. Townhouse properties, owned and fully managed by Oyo, have played a key role in improving the startup’s image with customers.

“When they started with the marketplace, they didn’t need any leverage at that point,” said a venture debt investor, requesting anonymity. “But once they got into Townhouse, there was a need for investing into the properties, which made them turn to debt financing.”

Oyo is not the only one to diversify its balancesheet with debt. This is a trend and several top startups in the Indian ecosystem, including Swiggy, BigBasket, and Byju’s, have turned to debt even while racking up millions in equity funding.

“For most startups, if they are only using equity capital to grow, it gets expensive,” said Vinod Murali, managing partner at venture debt firm Alteria Capital. “But with the larger startups, the idea of turning to debt financing would be more for a specific transaction—an acquisition perhaps or brand marketing or any situation where value is created ahead of assets,” he said. In February, e-commerce logistics firm XpressBees raised 35 crore in debt financing from InnoVen Capital.

Oyo currently operates 88 Townhouse properties in India. “We have worked with multiple marquee NBFCs and new-age financial institutions to supplement our strong balance sheet and help our asset owners gain access to affordable financing solutions. Oyo will continue to explore such options in-line with our financing strategy,” said an Oyo spokesperson.

Oyo recently raised a total of $1 billion in equity in a round led by SoftBank Group Corp. The round saw Chinese ride-hailing giant Didi Chuxing pumping in $100 million.

Oyo, which is present in 10 countries, recently committed to an investment of $200 million in its businesses in India and South Asia. The company says it is present in more than 259 cities in India, with over 8,700 buildings and over 173,000 rooms. The debt financing would play a significant role in expanding Townhouse properties in India, said the other person mentioned above.

Related Posts:

  • No Related Posts

The AlleyWatch NYC Startup Daily Funding Report: 3/14/19

Smart dog collar Fi has raised $7M in Series A funding from investors that include RRE Ventures, Lerer Hippeau, andFreestyle Capital. Founded by …

The latest venture capital, seed, and angel deals for NYC startups for 3/14/19 featuring funding details for Fi, OOVA, and much more including two never before reported funding rounds. This page will be updated throughout the day to reflect any new fundings.

Related Posts:

  • No Related Posts

London proptech startup Nested has laid off 20% of its workforce citing ‘Brexit uncertainty’

The equity part of the round was led by Northzone and Balderton Capital, while the source of that debt financing, to be used primarily for the cash …

Nested, the London-based “data-driven” estate agency that provides a cash advance to help you buy a new home before you’ve sold your old one, has laid off 20 percent of its workforce, TechCrunch has learned.

According to sources, the more than 15 staff being let go were informed earlier today. The majority of departures are within Nested’s operations team, including sales, although I understand they also include a number of engineers and other product people.

Contacted by TechCrunch, Nested co-founder Matt Robinson confirmed the departures, citing the uncertainty of Brexit, and the impact this is having on liquidity in the housing market. It is understood that the layoffs are designed to place Nested in a better financial position and enable it to continue weathering the Brexit storm, and ultimately position the company to reach profitability in the future.

Robinson provided the following statement:

We have come off a record year and quarter but with continued uncertainty around Brexit market volumes have fallen significantly. We will continue to grow share, however, given the external environment we must remain cautious as we build the business for the coming years.

Launched in late 2016, Nested competes with high-end estate agents by providing all of the services needed to sell your house, but with a key difference. In addition to handling valuation, marketing and sales, the startup will loan you between 90 and 95 percent of the market value of your property as a cash advance so you can purchase a new home prior to your old one selling.

Before Brexit and the uncertainty it has caused with regards to U.K. house prices, that figure was “up to 97 percent” of the market value of the property.

More broadly, the idea behind Nested is to eliminate much of the stress and uncertainty of selling and buying a home, including what your final budget will be, and also ensure that you’re never caught up in the dreaded property “chain” and miss out on your desired home. By becoming a cash buyer, it also puts you in a stronger position to negotiate your onward purchase.

Related to this, it is unknown to what extent the downward pressure on house prices in the U.K. has affected Nested’s market fit, or its ability to use data to accurately value the properties it lends cash against. However, the core value-add of not being stuck in a chain would seem to be just as useful in a downturn as it is in an overheated market.

Meanwhile, the downsizing of Nested comes just four months after the startup raised a further £120 million in funding, a combination of £20 million equity financing and £100 million in debt. The equity part of the round was led by Northzone and Balderton Capital, while the source of the debt financing, to be used primarily for the cash advances Nested provides to sellers, was not disclosed.

Previous backers in Nested include Rocket Internet’s Global Founders Capital, and London-based Passion Capital. The current listed directors are CEO Robinson, Rocket Internet’s Oliver Samwer, COO James Turford and Northzone’s Jeppe Heinrich Zink.

Separately — and unrelated to today’s layoffs — TechCrunch has learned that Phil Cowans, who co-founded Nested alongside CEO Robinson and COO Turford, stepped down as CTO of Nested in the last few weeks, although he remains at the company in a different role and as co-founder. He also resigned as a director of Nested on the 25th of February, according to a regulatory filing with the U.K.’s Companies House.

Related Posts:

  • No Related Posts