Funding the Next Generation of Women Entrepreneurs
Vicki Saunders is the founder and chief executive of SheEO — a crowdfunded venture capital fund that invests in women-led, socially positive ventures.
For twenty years, I had thought about the problem of women lacking access to venture capital — and I couldn’t figure out how to solve it. It was the emergence of innovation in the financing space — crowdfunding — that allowed me to see the solution.
This is literally a radical redesign. Not only the funding model, but also how we think about female entrepreneurs: understanding what kind of businesses women run and the persistent challenges that they face in garnering capital.
It is not just about capital and investment. The 500 women in your cohort instantly become your customers, your network, and your advisors. Demand has been off the charts. We have about 150 regions around the world where activators and entrepreneurs have applied, and we are working on how we are going to scale that up.
We call our investors “activators” because you are activating your capital and your networks and your expertise to grow business. Each “cohort” — consisting of the 500 activators and the heads of the five ventures — comprises a network, and each network actively works together to build their businesses. The activators serve as advisors to the ventures — and to each other — working with the ventures to help them scale up and build a marketplace. In return, activators can participate in follow-on funding rounds.
This is not a transaction, it is a relationship. And the benefit to you as an activator is that you’re going to help create a perpetual VC fund for our daughters and our granddaughters — our goal is to reach $1 billion over time. In addition, you are also now going to have a relationship with these entrepreneurs and this network.
With seven billion people vying for jobs that are disappearing, we are facing a completely different planet than we did in the past.
We are at a really interesting moment in time where we are redefining what capitalism can mean and finding new approaches, like crowdfunding and the sharing economy. I am fascinated by that, and also by financial innovation and how we can redistribute capital in an inclusive way. What a great time to be alive if you are a creator, a maker, an entrepreneur.
I grew up in a family of entrepreneurs, surrounded by that spirit of dreaming and creating. But I didn’t think I was going to be an entrepreneur. I happened to be in Prague right after the wall fell, and it changed my life completely. One day, nobody there thought they were free. And the next day, the tanks drove away and for every single person, it flipped a switch in their brain — suddenly they were all free. It was intoxicating. As everybody was dreaming about what they were going to do now, I started to think, “What am I going to do?” And I started a business. And then I started another business, and eventually I became an evangelist for entrepreneurship.
With seven billion people vying for jobs that are disappearing, we are facing a completely different planet than we did in the past. And the future is very much about identifying what you are amazing at and then contributing that to the world — and differentiating yourself in that very large labor pool of seven billion people.
We really need fresh thinking around how we are going to incentivize people and innovators for taking risk and incentivize people who provide risk capital. Sometimes as an entrepreneur, you feel very alone — and it is really challenging. When you can be validated by hundreds of women in a network who are all excited about you and want to help you market and introduce you to people, it changes your confidence.
Since launching in 2015, SheEO now has funds based in the U.S. and Canada and will launch in the Netherlands and New Zealand this year. In the SheEO model, 500 “activators” each donate $1,000 to create a $500,000 perpetual lending-based fund, and the activators select five ventures in which to invest those funds in the form of five-year loans. In the U.S., nominal interest is charged on loans, which is invested back into SheEO. For each fund of $500,000, the entrepreneurs, with the input of activators, determine the loan size for the five ventures.