Stephany LaPierre didn’t think of herself as a female founder until she tried to raise venture capital for her tech startup, Tealbook. A successful serial entrepreneur whose grandmother and mother were also entrepreneurs, LaPierre never anticipated that being a woman would be seen as a disadvantage in starting a technology company — until investors made it clear it was.
On paper, Tealbook is solid: It meets a market need, is scalable and has no direct competitors. Tealbook’s platform makes sourcing and selecting suppliers faster and easier for large corporations by providing up-to-date, credible supplier information. And it already has paying blue-chip clients. “I was pitching four, five, six times a day and I kept hearing I was too early,” says LaPierre. One investor was more direct. “He told me I had zero chance of raising venture capital because I was a woman and had children.” The fact that she is Canadian and speaks with a French accent didn’t help.
LaPierre’s experience is more common than not. To help level the playing field, today Business Development Bank of Canada (BDC) and MaRS Investment Accelerator Fund (IAF) are launching StandUp Ventures Fund I, with a $5 million contribution from BDC Capital, and is seeking to raise additional capital from investors to a maximum of $15 million. The fund is one part of BDC’s Women in Tech initiative. This fall, BDC will launch a $50-million program to support the capital needs of women-led firms from pre-seed to late stage.
StandUp Ventures will invest in Canadian pre-seed and seed-stage high-growth, capital-efficient ventures in health, IT and cleantech. Qualifying investments will have at least one female founder in a C-suite role, who holds a significant ownership position. Twelve to 20 investments will be made over the next three to five years, ranging from $250,000 to $1 million.
Statistics show that women-led businesses tend to be underfunded. Part of the problem is that the overwhelming majority of venture capitalists are male (it’s been estimated that 94% of VCs are men) and have an unconscious bias. That is changing. “We are starting to see that when women are at the partner level of a venture capital fund, the number of women-led businesses that gain access to funding improves,” says Michelle Scarborough, BDC’s managing director, strategic investments and women in tech. “The StandUp Fund is an important step in the evolution of venture capital and in providing more capital to women-led technology businesses.”
“IAF has been actively investing for more than 10 years and we’ve always had female directors,” says Michelle McBane, Investment Director, MaRS IAF. “More than 12% of our portfolio of 120 seed-stage companies has female representation at the founder of C-suite level. When BDC approached us about the StandUp Fund it was a natural extension of what we were already doing.”
Scarborough and McBane see the fund as an opportunity to change the culture and break down the biases that create barriers for women tech entrepreneurs. “You can’t be what you can’t see,” says McBane. “With more women role models, we can help address the lack of diversity in the tech space.
“Research shows, and we believe fundamentally, that diverse organizations outperform homogenous organizations on all fronts. Tech has a problem with all types of diversity; we’re tackling gender. With more women in leadership, you’ll see that change.”
Lorna Borenstein, who launched eBay Canada and held senior roles at HP, Yahoo! and Move, Inc. before launching Grokker, a wellness site/community featuring thousands of expert-led fitness, yoga, mindfulness and healthy cooking videos, agrees. A Canadian who moved to Silicon Valley 15 years ago and made the most of the growth of the consumer internet, she will be sharing her experiences at today’s launch of the StandUp fund in Toronto.
“If you are trying to create better companies, you have to put money to work that will advantage the diverse communities who are not getting enough money,” says Borenstein. “If a network is full of men, the first hundred people you see will be dudes. A fund like this is important because there isn’t that same network of female entrepreneurs. This fund will help create those role models.”
Role models like Stephany LaPierre; Tealbook is StandUp’s first investee. The company has received $500,000 from StandUp and IAF.
For her part, McBane is looking for “the best and brightest ventures. We want to pull from 100 per cent of the talent pool versus just 50 per cent.”