- The Washington Times - Monday, August 7, 2000

Naming all the female venture capitalists in the Washington area is not hard: They are fewer than a dozen in a game of more than 200 players.Yet as small as their number may be, it's a big change from six or seven years ago, when there was none in the region.

Historically, the business of venture capital has been closed to women, and the service it provides funding for high-risk and fast-growth businesses has mostly gone to male businessmen.

While women have broken the glass ceiling across much of the American work world, venture funding has been among the last male-dominated industries to open its doors. Now more Washington-area women are wading into this once foreign frontier.

"Today's situation represents the leftovers of many years of an old boys' network at work," said Sherrye Henry associate administrator for the Women's Business Ownership program under the Small Business Administration (SBA).

"But as more and more do become successful … they will be the wedge for the future to widen for other women in the field," she added.

The few women working at venture funds in the region are mostly former executives at high-tech companies who retired early, but wanted to mentor start-ups and continue expanding their wealth.

Traditionally, women-owned business are mostly small and service-oriented, like dry cleaners and flower shops, said Ms. Henry. That began to change in the mid-1990s, when more women joined in the information technology boom. Soon female entrepreneurs were knocking on venture funds' doors first for financing, and later for jobs.

Still, the list of women in the private investment field is still short, said Charles O. Heller, senior principal at Redwood Shores, Calif.-based Gabriel Venture Partners.

"I have a suspicion that it's still very much an old boys' network," he said. "The venture capital world in general is very clannish."

The closed network has translated into little funding for women, who run 38 percent of the nation's businesses, according to the National Foundation for Women Business Owners.

Despite their prevalence at the top of businesses, only 2 percent of venture capital awarded last year went to women-owned firms, according to a July survey conducted by the Foundation and Wells Fargo & Co.

Amy Millman, executive director of the National Women's Business Council (NWBC), a federal advisory panel that promotes women in business, said the percentage is a little higher at about 8 to 12 percent but still not high enough in her view.

She expects, however, that as more women become venture capitalists, it will be easier for female executives to raise venture funds. "Investors look for people they feel comfortable investing in," Ms. Millman said. "It's also an access issue, a matter of familiarity."

Ms. Millman said Silicon Valley has about 40 women partners, and another 150 women in junior positions at venture funds. Locally there are fewer than a dozen women, less than half of whom are partners.

Aside from a tight-knit com-munity, venture capitalists tend to keep low profiles, which has added to the difficulty of women breaking in, said Laura Witt, an associate at Baltimore's ABS Venture Fund.

"It's something I gravitated toward as I found out about it," said the 32-year-old former strategy consultant, who helped startups develop their business models.

Jane Dietze, a former high-tech executive now partner at Columbia Capital in the District, is another female venture capitalist who began working in the region in the past five years.

"Generally venture funds are very small and they don't do a lot of hiring," she said. "So there is not a lot of opportunity for new people to get involved. And they are small partnerships, generally hiring people they've worked with before and are comfortable with."

While most female investors have a background similar to Ms. Dietze's, Patty Abramson, another local investor, came from marketing.

Two years ago, she looked around and decided there were too few women-run companies getting venture capital. So she and two partners Wendee Kanarek and Rob Stein started the Women's Growth Capital Fund in the District, which invests only in women-run companies.

"I always jokingly say, you go to a venture fair and there is no line in the women's bathroom. It's great," said Ms. Abramson. "It's really a guy's world it's like a club and it's somewhat difficult to get in."

Last year, Ms. Abramson decided to introduce the area's successful businesswomen to private investment clubs. The result was WomenAngels.net, a club of female "angel investors," so called because they make the very first investment in a company.

Ms. Abramson and Kip Sirinakis, who was recruited as managing director, last fall started a series of breakfast meetings intended to convince wealthy women around Washington to join the club. The goal was to gather 85 persons by March or April of this year.

By January, however, the club was overbooked, said Ms. Sirinakis, who used to run George Mason University's business incubator.

"I think angel investing is intriguing," said Ms. Sirinakis, who might start another club this year. "It's appealing realizing that many of these women hadn't done this before, and to work with a group of successful companies … and bring a new dimension to these women."

WomenAngels is just like any other investment club, said Mr. Stein, one of the club's few male members. The difference between WomenAngels and other angel networks is that many of the women are new to investing.

"Women have always had a lot of wealth, but they have never controlled it," said Ms. Millman. "What we have found now is the emergence of women as active angels, active private investors … That's a new phenomenon."

First partner baby

In December, Suzanne King became the first partner at a local venture fund to have a baby.

"The wives of partners and administrative assistants had had babies before, but never one of the investment professionals," said Ms. King, who is one of three women at 18-partner New Enterprise Associates (NEA), a Menlo Park, Calif.-based fund with offices in Reston.

When it came time for her to go on maternity leave, she realized that the fund had never dealt with the issue before and had no maternity policy. So Ms. King, 36, researched other businesses' policies, and wrote a memo to the chief financial officer. "It was a unique experience," she said. "But everyone was very excited, and wanted to see pictures when [the baby] was born, and followed the whole saga while I was on bed rest for eight weeks."

The presence of women at venture funds, said Ms. King, is "a function of how many successful women entrepreneurs there are that have the money to make large investments."

Ms. King's road to success was smooth and surprisingly short. Her first job after college was in Atlanta for Arthur Andersen, a major national consulting firm, where she worked as an accountant.

"I realized early on I didn't like the big company atmosphere," she recalled. "I wanted to work with the CEO of a company, see what the company was really doing, and embrace it."

At 24, Ms. King took a job at a start-up for less money and much more work. She left Atlanta six years later as the vice president of finance of the company, which had grown to 120 employees.

Ms. King stumbled across the venture capital business during her graduate studies at Northwestern University's school of business. She took a fellowship, which placed her at NEA as a temporary partner. After graduating she joined the fund full-time.

"I can't imagine what else I would do," Ms. King said. "Every day you read a business plan you are reading about the future … you never mark anything off your to-do list you are always behind. It never gets boring."

Few new faces

Ginger Lew, CEO of the Telecommunications Development Fund (TDF), said things have changed since she first started in the field just two years ago.

She recalled attending a venture fair about 18 months ago hosted by a prominent technology magazine. Executives from about 60 or so companies were presenting their ideas in hopes of securing capital. None of them was a woman or from minority groups.

"I went up to the editor and said 'I'm really shocked,' " said Ms. Lew, who was one of only a handful of women investors at the fair. "It was San Francisco. I thought at least there would be some Asian-Americans there."

Ms. Lew said she understands the hesitation some women may feel toward entering the world of finance or business.

"When I was with the start-up, back in 1991, and had to raise money … I ran into some hurdles. There was no one to mentor us … no one to guide us or tell us how to put together a winning business plan," she said.

"Frankly, there are also gender barriers. You put extraordinary hours into this, and if you happen to be someone with a family, it becomes very, very difficult."

To help women break into the field, NWBC organized a venture fair last year in Silicon Valley targeting women-run companies. Ms. Millman, of NWBC, said it was so successful that the organization held a second fair last month in Sterling, dubbed Springboard 2000.

"It's getting in the door that's so difficult," said Ms. Lew, who participated in the event. "And that's exactly why we did Springboard."

Ms. Lew and TDF's business director, Penny Pinkett, are among 85 members of WomenAngels. They agreed that the field has come a long way.

They recalled that just a few years they would be the only two women at industry meetings. "Now we see a little more women. It's encouraging," Ms. Lew said.

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