Clearing the Hurdles : Women Building High-Growth Businesses

by Brush, Candida G.; Carter, Nancy M.; Gatewood, Elizabeth; Greene, Patricia G.; Hart, Myra M.

• ISBN13: 9780131112018
• ISBN10: 0131112015
• Format: Hardcover
• Copyright: 2004-01-01
• Publisher: FT Press

Summary

Women Building High-Growth Businesses "Even in the 21st century, much of the world still systematically excludes 50 percent of the smartest people from full responsibility. Entrepreneurship rewards excellence and results, not gENDer, and this book is a wonderful gift to women who would like to respond to corporate America by saying, 'Thanks, I'll do it myself'." --Jim Collins, AUTHOR, Good to Great, and Co-AUTHOR, Built to Last "Savvy and inspirational, Clearing the Hurdles is an important book for women intent on growing new businesses. The team of talented AUTHORs provides information, insights, and advice that will educate, motivate, and challenge women aspiring to become successful entrepreneurs." --Laura Tyson, Dean, London Business School "With women creating new businesses at a faster rate than males, it is imperative that today's venture capitalists take an active role in mentoring and recruiting women to become venture capitalists, business owners, technologists, entrepreneurs, and government leaders. Clearing the Hurdles is not only a wake up call; it is a roadmap to start this long overdue project." --Mark Heesen, President, National Venture Capital Association "Clearing the Hurdles examines all elements behind the lack of access to capital for women entrepreneurs who want to build high-growth companies. If you are a woman who has a vision for a high-potential business, this book was written for you." --Connie Duckworth, Kathy Elliott, Sharon Whiteley, Founders, 8Wings Enterprises, and Co-AUTHORs, The Old Girls Network: Insider Advice for Women Building Businesses in a Man's World "Clearing the Hurdles debunks the myths and defines the barriers that entrepreneurs confront--a perfect roadmap for women embarking on the entrepreneurial journey." --Kay Koplovitz, Founder, USA Networks, and former Chair, National Women's Business Council Starting, funding, and growing a new venture are significant challenges for every entrepreneur. For women, the hurdles are even higher, due to widely held perceptions about them, their capabilities, and their businesses. Now, five leading experts on women entrepreneurs offer systematic solutions to the challenges, offering timely advice to women dedicated to achieving success and claiming the rewards. Clearing the Hurdles draws on five years of original research, performed as part of the Diana Project--a major initiative that explores ways women grow businesses. The AUTHORs identify key factors associated with funding, growth, and success: the founder's goals, expertise, and commitment; strategic direction; team building; effective use of networks; and access to capital. Most important, they offer concrete strategies for overcoming obstacles: strategies proven in the marketplace by women entrepreneurs. Wealth creation: Don't get left out! Learn what it takes to build your high-growth business Get credible Fill the technical and management gaps in your expertise Get strategic Choose the right business, build the right plan Get connected Link yourself to the right resources, networks, and people Get over the funding hurdles. This book is a training manual for women who want to claim their place as winners in the entrepreneurial challenge.

Author Biography

Myra M. Hart, Class of 1961 Professor of Entrepreneurship at the Harvard Business School, currently leads the school's Models of Success initiative and directs the writing of case studies featuring women protagonists.

Table of Contents

Preface	p. xix
Women Becoming Entrepreneurs	p. 1
No Glass Ceilings Here	p. 1
An Entrepreneurial Venture Begins	p. 3
Venture Growth Is a Choice	p. 5
Women-Led Ventures	p. 7
Slow to Grow	p. 8
Are There Changes in the Offing?	p. 9
Private Equity--The Last Big Hurdle	p. 10
Angel Investing	p. 10
Venture Capital	p. 10
The Hurdle Analogy	p. 12
The Plan for This Book	p. 13
Notes	p. 15
Women Entrepreneurs: Pathways and Challenges	p. 17
The Entrepreneur	p. 18
Aspirations and Goals	p. 18
Capabilities	p. 19
Strategic Choices	p. 20
The Venture Concept	p. 20
Industry	p. 21
Resources	p. 22
Hurdles to Overcome	p. 24
Motives, Aspirations, and Commitment	p. 25
Human Capital	p. 25
Financial Knowledge and Business Savvy	p. 26
Growth Orientation and Strategies	p. 26
Social Capital and Social Networks	p. 27
Building a Management Team	p. 27
Funding Connections	p. 27
Higher Hurdles for Women	p. 28
Why Are the Hurdles Higher?	p. 31
Parents	p. 33
Peers	p. 33
Education	p. 34
Media	p. 35
Work Experience	p. 36
Winning the Race for Success	p. 37
Notes	p. 38
Funding Sources for Businesses on the "Grow"	p. 41
Money and the Start-Up Process	p. 44
Growth Capital versus Start-Up Funds	p. 46
A Strategic Approach	p. 46
Bootstrap Financing	p. 48
Credit	p. 50
Institutional Debt	p. 51
Equity	p. 52
Sources of Equity Capital	p. 53
Angel Investing	p. 54
Government-Supported Investments	p. 58
Hybrids: Government-Supported Venture Capital	p. 58
Venture Capital	p. 59
Notes	p. 65
Motives, Aspirations, and Commitment	p. 67
The Entrepreneurial Choice	p. 70
Motives for Entrepreneurship	p. 72
Women's Aspirations Contrast with Entrepreneurial Reality	p. 74
Family Role Expectations	p. 76
Women's Self-Expression Leads to Perceptions	p. 77
Truths and Realities	p. 79
Moving Beyond the Expectations	p. 82
Summary	p. 86
Notes	p. 87
Women and Human Capital	p. 89
What Do Resource Providers Look For?	p. 90
Assumptions about Women Entrepreneurs	p. 93
Sorting Fact from Fiction	p. 95
Education	p. 95
Experience	p. 98
Overcoming the Hurdle	p. 102
Assessing Your Education and Experience	p. 104
Enhancing Your Human Capital	p. 108
School	p. 108
Training	p. 108
Work Experience	p. 109
Summary	p. 110
Notes	p. 111
Financial Knowledge and Business Savvy	p. 113
Challenges Built into the System	p. 114
Do Women Underinvest in Their Businesses?	p. 115
Do Women Have the Requisite Financial Knowledge, Skills, and Experience?	p. 120
Separating the High Potential, High Performers from the Rest	p. 125
The Springboard Survey: A Study of Women Entrepreneurs Leading High-Potential Enterprises	p. 128
What Can Women Do to Clear the Financing Hurdles?	p. 133
To Overcome Any Shortfalls in Initial Funding	p. 133
To Demonstrate Financial Knowledge and Management Savvy	p. 135
To Overcome Concerns about Ability to Manage Risk	p. 137
Notes	p. 137
Growth Orientation and Strategies	p. 141
Are Women-Owned Firms Smaller?	p. 144
Why Are Women-Owned Firms Smaller?	p. 145
Why Are Women-Led Ventures Perceived Differently?	p. 147
Women Aren't Serious about Growth	p. 148
Women Are Better at Low-Tech Service Ventures	p. 150
The New Generation of Women Entrepreneurs	p. 151
Strategies for Growth	p. 154
Ambitious Strategy	p. 158
Deliberate Strategy	p. 159
Variable Strategy	p. 160
Maintenance Strategy	p. 161
Overcoming High Hurdles	p. 162
Summary	p. 164
Notes	p. 164
Building Useful Networks and Cashing in on Social Capital	p. 167
Are Women Unplugged from the Right Networks?	p. 170
Formal Networks	p. 172
Informal Networks	p. 173
Benefits of Networks	p. 174
Network Boundaries and Barriers	p. 175
The Case for Homogeneous Networks	p. 177
The Case for Heterogeneity	p. 178
Social Capital--The Currency of Network Exchange	p. 179
Reputation and Trust	p. 181
Spending Social Capital within a Network	p. 182
Some Networks Are Like Foreign Countries	p. 183
Women Have Diverse Networks	p. 184
Women Benefit from Strategic Sponsors	p. 185
Creating Effective Networks	p. 187
Notes	p. 189
Women Building Management Teams	p. 191
Perceptions about Women	p. 195
Women Don't Want to Share Ownership	p. 195
Women Don't Recognize the Types of People Needed	p. 196
Women Are Outside the Networks	p. 196
Women Just Don't Have What It Takes to Lead a Growth Venture	p. 197
Fact and Fiction about Women and Teams	p. 198
Building a High-Potential Team	p. 202
Challenges in Team Formation	p. 205
Summary	p. 206
Notes	p. 207
Networking for Venture Capital	p. 211
A Brief History of Venture Capital in the United States	p. 212
Tracing the Roots of the Industry	p. 212
The Context of Growth	p. 213
Understanding the Investment Process	p. 214
Risks and Rewards of Venture Capital Financing	p. 215
The Cultural Context for the U.S. Venture Capital Industry	p. 216
Venture Capital Cycles	p. 217
Building Partnerships, Professional Staffing	p. 218
The Venture Capital Community Today	p. 219
Women in the Venture Capital Industry	p. 220
The Pioneers	p. 220
Implications	p. 223
Getting Access to Venture Capital Investors	p. 224
A Connection or a Disconnect?	p. 226
Missing Links between Women Entrepreneurs and Venture Capitalists	p. 229
Do You Know the Right People?	p. 229
Getting Connected	p. 230
Do They Know You?	p. 231
Model Misfits	p. 231
Getting to Yes	p. 231
Can Women Venture Capitalists Change the Equation?	p. 233
The Research Process	p. 234
Performance Review	p. 240
What Next?	p. 241
What Can You Do to Change Things?	p. 242
Investigate Organizations That Provide Support	p. 242
Build Entrepreneurial Connections Now	p. 243
Do Additional Venture Capital Research and Make Contact	p. 243
Notes	p. 244
In Conclusion	p. 247
Note	p. 253
Index	p. 255
About the Authors	p. 271
Table of Contents provided by Ingram. All Rights Reserved.

Excerpts

Why do we care so passionately about women and high-growth enterprises? Because entrepreneurship is a driving force in the growth and prosperity of the nation. Because entrepreneurs create innovative products, provide new jobs, and gain substantial financial rewards for themselves and their partners in the process. And especially because, for women, there is a significant gap between the number who start new ventures and the number who are able to achieve high growth and substantial success. Entrepreneurs as Heroes... You know their names today, even though they made their mark 100 years ago and more. Cornelius Vanderbilt (railroads), Andrew Carnegie (steel), John D. Rockefeller (oil), Marshall Field (retailing), and Henry Ford (automobiles) left an enduring legacy of innovation, market dominance, and vast fortunes. They are among a handful of extraordinary entrepreneurs who not only achieved great wealth, but also won international celebrity. Whether you think of them as robber barons or heroes, these men who developed railroads, steel, oil, large-scale retailing, and automobiles continue to have a star quality associated with their names more than a century later. The creation of new ventures is deeply embedded in our American heritage. The exciting part is that it is even more vibrant and widespread today than it was in the days of Rockefeller, Field, and Ford. Ever-expanding technology, support from government policy and regulations, and the redefinition of corporate America in the 1980s and 1990s made the United States a hotbed of innovation and new venture creation. Entrepreneurs, armed with promising new business concepts, lured by vast new market opportunities, and convinced of huge financial payoffs, launched millions of new ventures in the past 20 years. That they did so in an environment rich with resourcesboth public and privateadded to the likelihood of their success. Some of the most celebrated contemporary venturers are Steve Jobs (Apple, Pixar), Bill Gates (Microsoft), Jeff Bezos (Amazon.com), Howard Shultz (Starbucks), and Michael Dell (Dell Computers). In our hearts, we know that the kind of entrepreneurial success these men achieved is reserved for a very few. We sometimes think of them as the lucky ones, but we also recognize their focus, talents, and personal efforts. Looking only at their successes, it is easy to imagine that they hurdled over all obstacles in their race to develop new products and services, and then build new markets and industries. However, that was not really the case. Their successes were built on astute observation, practical application, and hard work. Each drew on personal resources, but when that wasn't sufficient, enlisted the help of others. Each one confronted failure more than once, but never accepted it as final. Entrepreneurs starting new ventures today aspire to that same rarified air of success, but at the same time they recognize that these cultural icons are nothing short of heroic. The biggest winners among entrepreneurs are celebrities precisely because they are so unique in their accomplishments. Why This Book? Did you notice? The names on the preceding lists are all male. True, only a select few entrepreneurs become heroesbut it is also true that heroines are almost entirely absent from the list! With the notable exception of a handful of dynamos in the cosmetics (Madame C. J. Walker, Helena Rubinstein, Estee Lauder, Mary Kay Ash) and fashion industries (Coco Chanel, Liz Claiborne, Donna Karan), women have not been significant players in the world of high-stakes entrepreneurship. More recently, Carol Bartz (AutoDesk) and Meg Whitman (eBay) have become standouts in technology-based ventures. We didn't set out to write a book. We simply wanted to find out why women, who in 2003 were majority owners of 28% of all businesses in the United S