For women in business, a Harbinger of hope

BOULDER — This is the 21st century, right? For women entrepreneurs seeking venture capital, you’d never know it.

In 2919, according to data from research firm PitchBook, the largest Series G venture-capital deal completed by a team of female founders was $165 million. For their male counterparts, the largest was worth $3 billion.

Megan Bent is among the women working from the ground up to change that.

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Her four-year-old Boulder-based early-stage growth equity fund, Harbinger Ventures, closed its second fund with $21.7 million of committed capital last October, and today has about $25 million in assets under management. But it’s been an arduous climb to get past the stereotypes.

“When I raised the first fund in 2016, the gender gap was lightly reported but quite material,” Bent said. “Two to three percent of capital went to women. Very few women were actually investors themselves. And yet it was not something that was top of mind for people. There were a handful of microfunds, a handful of investing programs, loan programs, but it was not only a white space but it was just an overlooked opportunity, generally. Even when I first started talking to my investors about this, they had real questions about whether it was viable, scalable, could create return. We continue to see stagnation in terms of percent of capital going to women. The list of top venture capitalists was just published, and there’s one less woman than there was last year. There’s been some progress on the grassroots side that the total number of deals is going up that include women, but the dollars remain quite stagnant.

“There’s more and more funds like me that are small but persistent in putting this front and center,” she said, “but it’s going to take some time until it really changes the numbers on a macro scale.”

Persistence is the key, however. That’s what she practices by targeting her investments to businesses that have at least one female founder on their teams. She preaches it as well to women in the branded consumer products space. Be persistent. Be tenacious. And if you can’t defeat the stereotypes head on, find ways to work around them.

“What I always say to our founders is that knowledge and data are power. In any business you run, you have certain headwinds and challenges. You just need strategies around them. If as women you acknowledge and know that there are certain expectations — that women are more conservative, more risk averse, don’t know their numbers as well, stronger at marketing and less decisive, less cutthroat or ambitious — then when you go into a room with an investor and show your materials and your presentation, you can completely abolish those stereotypes.”

Women also can overcome an “experience gap,” which is the message she carried to the female founders of Cora, makers of organic cotton tampons.

“If you’re pitching tampons to a male investor, they can’t experience the product, so how do you close that gap and allow them to participate in the product discussion in a more meaningful way? Using the economics and the opportunity as the shared dialect is a way to close that gap,” she said. “Acknowledge and understand where those implicit biases are going to come up and be prepared to hit them directly, head on.

“The second thing is building your network and your relationships to really support you in that effort. Accessing capital is very much a relationship-driven business. It’s about building trust, building excitement and alignment, and those relationships take a really long time to build. Proactively developing a network of female investors and advisers — but also male investors, and building that balance into your own cap table and advisory board  — can dramatically improve your ability to access those types of capital.”

Harbinger helps women founders develop their narrative, their story, and then conducts dry runs of meetings with investors.

“You pitch us, and we give you feedback,” she said. That way, “you get some of your nerves worked out in advance. I think that is really valuable to both the men and women, but particularly more the women.

“The second thing we do is bring our teams together quite a bit so they have a peer group where they can share feedback with each other,” Bent said. “What worked for them in the meeting?  What didn’t work? What investors are great to work with? What aren’t? What different strategies or tactics can sort of change the tone of a meeting? What things to watch out for.”

Last September, Harbinger brought together about 50 female executives and partnered them with a professional coach and Colorado-based program called Enjoy Success for a full-day, deep-dive seminar on leadership.

Part of it is acknowledging that raising capital is hard anyway, she said, “and rightfully so because there’s a leap of faith an investor has to take when they’re putting capital with you for the first time. When you’re raising capital for the first time behind an unproven thesis that’s sort of complex and structural and values-driven. It’s even harder. I definitely had some hard conversations with investors who just didn’t agree. They just didn’t get it. That’s frustrating on a personal and professional level, but it’s also something that has me rise to the challenge and say, ‘Great. I’m going to go deliver exceptional returns and prove to the world that this is viable.’

“I did have one investor say to me, ‘What about the guys? Is this exclusive the other way?’ Well, sure, but you’re missing the point here; 98 percent of dollars go to 50 percent of the population  and 2 percent go to the other 50 percent, so there’s clearly something that needs to be done here. I think it requires acknowledging that not only is it a social issue but it’s an economic opportunity.”

Bent is buoyed by the fact that from the time she started working with an entrepreneur in Boulder, she’s seen a gradual change in attitude about impressions of female-owned businesses.

“If you fast forward to today, it’s quite top of mind,” she said. “Some large institutional investors have put this front and center as a priority. Their investors and allocators are looking for more diversity. They’re very aware of the gap that just is so persistent, year after year. It’s getting more focused.”

For Bent, it’s just a matter of helping them see what’s right under their noses.

“Most investors spend their whole career looking for pockets of inefficiency or arbitrage where they can really create an economic advantage — and there’s one right in front of us. We’ve got a growing pool of talent. All the data suggest that women perform equitably if not better in some metrics than their male peers — but they’re consistently underfunded, for reasons that are quite irrational.

“So that’s a great opportunity, and it’s really fun for me personally to get to spend most of my career in a most unusual way, which is mostly surrounded by women,” she said. “We’re so proud of our teams. They’re not just women; they’re the next business leaders of the consumer world. They’re hard charging, they’re ambitious, they know their businesses, they know their consumers and they’re great to work with, and we’re really proud that we get the chance to work with some of these leaders. Many of our businesses are the market leaders in their categories from a brand perspective. They’re the leading challenger brands. They’re growing 100 percent plus year over year.

“On the investor side, 40 percent of our investors are female and they’re really smart women — but equally we work with really progressive men who saw something in us and took a risk with us. People we work with are the thing we’re most proud of.

“My highest ambition is to prove that our values can create value. That’s got to be proven out, so that’s one thing we really aspire to do.”