From mobile apps to data viz to digital audio, bold ideas are driving innovation in the news industry. But women and minorities are too often left out of the startup ecosystem in media and in many other industries.
In the U.S., for example, women-owned ventures accounted for just 16 percent of all businesses seeking funding in the first half of 2013. Only 13 percent of companies that received venture capital last year in the U.S. had women as founders.
A recent segment of National Public Radio’s "Tell Me More" program explored the cycle that leads to this reality: If the gatekeepers have a certain worldview, background or relationship network, they're going to see and value the ideas that appeal to them and their existing circle.
"We're not getting invited into the room," said Natalia Oberti Noguera, founder of the Pipeline Fellowship, which works to address the lack of gender diversity in the world of venture capital and improve funding options for women-led businesses. Many women don’t realize that their business is scalable and could benefit from financing, she said.
The solution, she said, lies in expanding both the pool of ideas and the sets of eyes that are listening to and learning about women’s ideas.
The Pipeline Fellowship pursues those goals through angel investing, a type of funding for small startups or entrepreneurs that has gained in popularity in recent years. “Angels” are often entrepreneurs or executives with money to invest. But beyond just pure monetary return, many angels also have a vested interest in the particular business idea and may even provide mentoring, advice and contacts. Oberti Noguera describes angel investing as “smart money.”
It is "not just about the financial capital that someone can put into a startup,” Oberti Noguera said on the program. “It's also about human capital and social capital, meaning someone's expertise; the different sorts of skill sets that they can bring to the table and offer the entrepreneur.”
Since launching its first angel investing bootcamp in April 2011, the Pipeline Fellowship has trained over 70 women in how to be effective angels. Those women have committed more than US$350,000 in investment, and the fellowship has expanded from New York City to Boston, Chicago, Los Angeles, San Francisco, and Washington, D.C. Investors attend monthly workshops on issues like due diligence and are paired with mentors who are seasoned male and female investors.
Diversifying the pool of gatekeepers and entrepreneurs in media
Oberti Noguera is also a judge in the NewU: News Entrepreneurs Working through UNITY project, which delivers training boot camps and strategic mentorships to develop and nurture the entrepreneurship skills of journalists of color in the U.S.
Of NewU’s seven judges, “three are women, women of color and founders/CEO of their own companies,” project co-director Doug Mitchell told IJNet. “And that adds value to our competitive process.”
NewU, funded by the Ford Foundation, has seeded 12 companies with investments ranging from $3,000 to $20,000 since 2010. Women lead 11 of the 12 companies.
Removing the gatekeepers
On the international crowdfunding site Indiegogo, where people raise money for small businesses, films, music and more, the gatekeeper has been removed altogether, letting ideas “rise to the top” based solely on merit. This has “given the power back to people,” said Indiegogo founder Danae Ringelmann on "Tell Me More."
“One of the things that's interesting is if you actually do inspire people to take action and you do remove the barriers and make access to capital more efficient, people of all kinds do just as well,” she said.
On Indiegogo, nearly half of the campaigns run by women reach their funding target.
Said Ringelmann: “If you provide an equal opportunity and a level playing field for all people to succeed, then all people do succeed equally.”
Why the time to pitch an idea is now
Oberti Noguera says that too many women entrepreneurs struggle with a perfection impulse, meaning they wait until an idea is perfectly formed to present it to a funder, rather than take a chance.
If women don’t “step up to the plate [and] share ideas, we're not going to be able to connect with those other potential investors who are not in the room that day,” she said.
Listen to the full "Tell Me More" segment here.
Image courtesy of Flickr user 401(K) 2012 under a Creative Commons license.