Astia and Inforum on Pulling Women Into MI’s Entrepreneurial Ecosystem
I was talking to a female entrepreneur recently. I can’t say who because, in that self-effacing way that women do so well, she had reservations about criticizing Michigan’s entrepreneurial ecosystem without the protection of anonymity. She suggested I look up a picture of the recent winners of the Great Lakes Entrepreneur’s Quest to see that only two of them are companies founded by women. (Two of the women pictured aren’t founders.) ”There’s definitely a bias, especially in the Midwest, but it’s everywhere,” she told me. “I wish that gender wasn’t ‘a thing.’ It’s pretty classic, the lack of diversity. I don’t think anyone goes in and says ‘I’m only going to fund white guys,’ but people go with what’s familiar, maybe more so in high risk endeavors.”
The persistent gender disparity in local startups has led to two new initiatives in Michigan that aim to reverse the trend, or at least to entice more women to throw their hats into the entrepreneurial ring. Inforum, an organization dedicated to the professional development of women with 1,800 members statewide, will take the lead on the new programs, which will launch at the end of summer.
The first program, Activate, is a series of classes meant to help women turn ideas into viable businesses and develop existing businesses. Accepting applications until August 1 and launching August 28, Activate will be split into two halves, with each half containing 20 classes. The first 20 classes are dedicated to developing a business concept, crafting a personal mission statement, due dilligence, and exploring the target market and its avenues of monetization. The second 20 classes cover the specifics of developing a business plan and financing structure, with the ultimate goal of a viable business plan that can move forward. The program runs from late August to the following June, with a break between January and February.
“We’re really looking at innovation-based entrepreneurial ideas and companies that are tech-based or tech-enabled,” says Kathleen Mechem, Inforum’s executive director of entrepreneurial strategies, adding that the program is geared toward mid-career women with at least five years of experience in science, tech, or business development. “The ultimate goal of the Activate program is to help develop innovative, high-growth companies that can contribute to the revitalization of Michigan’s economy.”
Mechem says that 2010 census information shows that women now earn 58 percent of the nation’s bachelor’s and advanced degrees, outpacing men for the first time in history. Despite that high rate of education, only about 3 percent of tech companies are founded by women. The way to turn that around, Mechem says, is through business development programming and access—to mentors, to networks, and to investment capital.
Which brings us to our second program: a collaboration with Astia, the San Francisco-based global non-profit that works to to ensure access to capital for women-led companies, offer intense mentorship to develop the executive leadership skills of female founders, and increase the likelihood that the client companies that successfully raise capital will achieve high growth through its extensive international network, which includes 300 investors and 300 former and current CEOs.
Last week, Astia announced it had received a $600,000 grant from the Kauffman Foundation to help high-growth companies founded by women scale up. Astia CEO Sharon Vosmek says that Kauffman data indicated that the market wasn’t very robust after the incubator/accelerator growth stage—that hypergrowth tended to take place, on average, in a company’s fourth year of operation. “That’s almost a three-year gap,” Vosmek notes. “That was our first warning.” Astia also discovered that women-owned firms were still underperforming in the greater context of overall U.S. economic growth, so Astia will use the grant to try to acheive 25 percent year-over-year growth in its portfolio of client companies.
It’s with that in mind that Astia comes to Michigan for the first time and works with Inforum to recruit women and startups founded by women into its network. Astia has already worked with one Michigan startup: Local Orbit, which provides ecommerce and digital tools to food-based local businesses. Vosmek calls Local Orbit a “really exciting” company targeted for hypergrowth. “When we focus on the Midwest, it’s not our intention to move companies out of Michigan, but to build the network and access to capital and expertise regardless of geography.”
The Michigan Economic Development Corporation (MEDC) is backing both Activate and Astia with $700,000 to get the programs off the ground. “The MEDC is very visionary on this front,” Vosmek says. “Within this space, with women, there is very little investment.” To that end, Inforum will be educating angel investors to increase the capital flowing to women-founded startups.
Both Mechem and Vosmek say that the most important thing is that women boost one another with networks to override the “boys club” atmosphere that saturates the startup world, no matter how unintentionally that boys club may be. Mechem advises any female tech entrepreneur interested in Activate or Astia to get in contact with her at Inforum (email@example.com). “After all, the system works through referrals,” she adds.