Women now control more than half the spending power in the U.S. So why is venture capital—the engine that powers innovation—so cold to their ideas? A panel of women entrepreneurs addressed the problem at the summit.
“One of the biggest problems is that there are just no women in the rooms where the decisions are being made,” said Susan Lyne, CEO of Gilt Groupe. “It’s simple calculus,” said Lyne, who formerly ran Martha Stewart’s OmniLiving Media and is now readying Gilt, a flash sale intenet site, for an IPO. “If you have a room filled with men, the ideas they’re going to want to finance are the ideas that appeal to men.”
Candace Browning, head of global research for Bank of America, called such thinking “completely out of touch with the reality.” A report she recently released advised clients to invest in businesses that harness the purchasing power of the 30- to 39-year-old women and women in the 60-plus age bracket. “That is where the growth really is.”
Amanda Steinberg, CEO of DailyWorth, a firm that aims to be a Kiplinger’s for women, said she had raised $3 million to finance her efforts, $2 million of which came from women who had never before invested in a start-up.
The solution, said Lyne, is “more noise. I see a lot more women being invited in [to pitch ideas], but it takes time, it takes pressure.”
Moderator Gayle Tzemach Lemmon asked the panelist if there was any truth to the idea that concentrating on start-ups that involve such traditional areas as fashion or child-rearing would consign women to a pink-collar ghetto. “I think that’s ridiculous, illogical,” said Lyne. “You should go where there is white space.”
With so much buying power shifting to women in the U.S. over the next decade, an effect amplified by the wealth transfer of the baby boom generation, “it would be foolish to stay away from such potential markets,” said the DailyWorth’s Steinberg.