A Silicon Valley community is bringing its wealth of knowledge to London. Its goal is to breed female entrepreneurs with staying power
Sharon Vosmek wants to teach female entrepreneurs "how to speak investor". Vosmek, a well-known face in the Silicon Valley tech scene, says that learning the language of investment, the idiosyncratic ways of the venture capital community, will go a long way towards helping female technology entrepreneurs to access the funding they desperately need. "Women tend to have undercapitalised companies in the UK," says Vosmek. "They tend to bootstrap longer than male-led companies, and that leads to all sorts of growth challenges."
Vosmek is the CEO of Astia, a not-for-profit boot camp community for female technology companies. Astia made its name in Silicon Valley, rounding up some of the most promising female-led start-ups, preparing them for seed and development capital and then connecting them with venture capital companies. It has a network of over 450 experts. Vosmek is now bringing Astia to Europe, and specifically to the UK, which she sees as a natural "gateway" to other markets.
She says crossing the Atlantic is a natural step. "Years ago entrepreneurs went global. Now investors are trying to work out how to be relevant for global entrepreneurs." If you're a mobile start-up, adds Vosmek, "you'd better have a European strategy because the US market is not going to meet your needs. The same is true of some of the pharmaceutical companies that we work with."
Since 2003, the Astia programme has raised over $500m for its US entrepreneurs, achieving a hit rate of over 60 per cent. It's an accomplishment that Simon Walker, chief executive of the British Private Equity and Venture Capital Association, describes as "phenomenal". That success is largely down to the prep work Astia entrepreneurs do. "The last thing we want is for entrepreneurs to present to investors the first time they meet them," says Vosmek. "The ideal relationship is that the investor starts as an adviser to the company and progresses to become an investor."
Astia helps start-ups at all stages of development, but for early-stage companies, expanding their networks is crucial, particularly for female-led firms, which find it hardest to source VC money. In the US, even though the number of female-led start-ups is increasing, the number of VC-backed female-led start-ups is decreasing. "If you ask any VC who they invest in, they invest in who they know. But men and women are in separate business networks," says Vosmek. "Building relationships between entrepreneurs and investors at an early stage breaks down the barriers to entry. It's not a glass ceiling, it's about building these relationships so that investors are included in your ecosystem long before you actually begin fundraising."
Silicon Valley, of course, is famed for its Rolodex network of tech professionals. Its investors, lawyers, accountants, PRs and programmers are there largely because there is nowhere better to be. Over the years, Silicon Valley has developed its own operating methods, its own quirks of nature. The Valley is "its own animal," says Vosmek. But how will Astia cope with the wider cultural spread of European investors and entrepreneurs? "We're about building relationships that will lead to understanding between investors and entrepreneurs—and that goes across cultures. In Silicon Valley, 40 per cent of the companies we worked with came from outside Silicon Valley. And they were achieving the same funding success rate as those companies from within."
Only around 10 to 15 per cent of the UK IT sector is made up of women. Vosmek says she'd naturally like to see more female software engineers, but she says that many entrepreneurs' inherent discomfort with the language of investment is a bigger constraint than gender. "Most of our companies have a really solid product conversation, but that's a very different conversation than an investor conversation. We have to spend time helping them understand how an investor looks at a business, how to speak investor. My observation is that once you do that, investors are ready to invest. I don't think it's a gender hurdle."
Tomorrow, seven well-prepped women will pitch for funding in Astia's first European Investor Forum. Although the event is in London, Vosmek has been careful to include a geographically wide range of VCs. "My favourite thing about London is how multicultural it is. If you are thoughtful to invite a diverse mix of people to the table, the rich ecosystem that currently is very strong in Silicon Valley I do see having potential here in London."
Astia prefers to take on companies with the potential for high-growth in the cleantech, internet services, and life science sectors. Among the entrepreneurs hoping to catch the eye of VCs tomorrow are Isobel Beauchamp and Elinor Olisa, who launched DegreeArt.com to help emerging artists connect with the art-buying public, and Heather Fairhead, founder of Phico Therapeutics, which makes anti-bacterial drugs.
Vosmek says her ultimate goal is to add value to the female IT sector through the development of start-up skills. "We focus on leadership of the founding team," she says. "We hope these entrepreneurs will achieve success to go on to become investors and board members. We want them to stay in the high growth sector and build up a more comprehensive ecosystem of serial entrepreneurs."
Posted 17 June 2009 : Director.co.uk
