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You Can’t Be What You Can’t See: Tips for Female and Minority Entrepreneurs

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Thoughts on how minority and women entrepreneurs can position themselves for success.

Women Entrepreneurs

An entrepreneur faces many decisions as he/she decides to plunge into the start-up world. In the early stages of venture, every decision is consequential since your early choices will affect your choices later on. As we have seen in our Founder’s Dilemma Class, the first few months (or years) of a business venture will be fraught with questions that have the ability to determine the success or failure of a business: Who should join the founding team? How should the equity be split? How will decisions be made within the team? Who should the entrepreneur take money from? While these questions are all pressing and should be thought through carefully, I believe that female and minority founding teams face a unique set of challenges as they increasingly step into the roles of “CEO” and “Co-Founder.”  This particular demographic set often lacks role models that provide frameworks from which to build upon. I’ve compiled actionable advice that will (hopefully) position minority and women entrepreneurs for success.

1) Have a clearly defined purpose

Why are you pursuing your particular idea? Where does the source of purpose and passion come from? Jessica Matthews from Uncharted Play relied on her sense of purpose to fight for her idea when all signs indicated she should exit her venture. When I co-founded Tressed with HBS classmates, we were fueled by desire to 1) Give women access to more affordable styling options and 2) To give great stylists additional sources of revenue. Through our platform, we believe that we are inspiring a host of women to reimagine how the service industry can look like and will look like in the coming years. Conviction, purpose, and passion will help you persevere through the downs of your entrepreneurial venture.

2) Seek out mentorshiplightbulb

80% of women entrepreneurs have mentors. While the importance of mentorship in the initial stages of a venture has been understated to some extent in our cases, mentors will help you 1) think through the challenges you will face and address as you start your business 2) help you think through the process of how to approach those initial challenges. It is worth repeating: your early choices will affect your choices later – it is always a good idea to seek advice from those who may have more perspective on the situation.

3) Don’t ever lose sight of cash flowmoney-bag-of-dollars_318-60043.png

Investment dollars are hard to come by – more so if you are a woman or minority entrepreneur. Women run 10% of VC-backed startups. A 2010 CB Insights analysis found that only 1% of seed and series A funding went to black founders. To overcome these barriers, women and minority founders should try to optimize their business model for superior cash flow. While this is not always possible, especially in the beginning stages of a venture, it is helpful to understand how you can tweak your business model to drive cash flows in the absence of a strong funding environment.

 

1 thought on “You Can’t Be What You Can’t See: Tips for Female and Minority Entrepreneurs

  1. Julisa, thank you so much for starting the conversation on an issue that I fear does not receive the attention it warrants in the HBS classroom nor outside. Everyone from Pepsi, PWC and BP has finally come to accept the importance of including minorities and women in the business world, yet as you point out, the start-up world seems to be a few steps behind.

    What troubles me is that it is difficult to tease out advice that applies more to women than to men. This is not to say that I believe that men don’t deserve the guidance that women do—I think we can all agree that being an entrepreneur is tough regardless of your gender—but I do think that it is in everyone’s best interest to identify barriers specific to women that we can knock down. In other words, are there steps we can take that will directly impact female entrepreneurs

    1) Develop professional networks for female entrepreneurs. I am often reluctant to advocate for women-specific initiatives—I believe that they can sometimes result in more harm than good by excluding men from the conversation—but this is one context in which I think it is especially important for women to be able to easily find peers. This plays to your point about mentorship; my hope is that we take it a step further and ensure that we have platforms where women can engage with one another on all things personal and professional related to starting a business.
    2) Leverage the interest of large corporations in investing in female entrepreneurs. Another idea is to ride the wave of interest in female inclusion coming from large private sector corporations. Goldman Sachs’ 10,000 Women initiative is one such example of a private sector giant support female entrepreneurs in developing countries, where the challenges women face in starting and growing businesses are intimidating at best, and impossible at worst. We should be able to convince these players—who have the resources, networks, and PR power—to invest in female-led businesses both in the U.S. and internationally.
    3) Get more women into VC. I think one of the best ways to empower female entrepreneurs is to have other women invest in them. It seems straightforward, but what I’ve experienced in my limited exposure to women in VC has been disappointing. Two examples come to mind. First, I went to a “Women in VC/PE” event last year organized by the WSA event. When I asked the panelists how they think about mentoring women, their responses were flippant, insinuating that they didn’t feel that they had time to invest in mentoring young women interested in the industry. The second example came during our FIELD 3 pitch simulation last year. The short version of the story is that I was shocked at how the female venture capitalist “investing” in our section treated the only all-female team, Pregnant & Posh. She shamelessly confessed that she had dissuaded the other two investors (who were both male and had agreed that this team was the strongest) from including P&P in the top three. Her argument was that she knew more about this business as a woman, but to be frank, the rest of us felt that she had just set the bar hire for them. I think beyond all else, it is important that women support one another in entering and succeeding in this space, and I believe that can best be done with commitments from women at the top.

    Those are just a few quick thoughts sparked by your post. Thank you again for tackling this issue—you’ve inspired to focus more on this in my own reflections and blog posts. And I look forward to continuing this conversation with you through the rest of the semester and after!

    p.s. Congrats on crushing Tressed ☺

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