Fortune: Only 1% of Female Founders Have Used VC Money to Fund Their Business

By: Madeline Farber

Female entrepreneurs do a lot of things to get their businesses off the ground. They raid their life savings, take loans, hit up friends and family, and even rely on credit cards. But just one in 100 end up using venture capital.

That’s the finding of a new study from Ernst & Young (EY) and the Women Presidents’ Organization (WPO), obtained exclusively by Fortune.

The study looks at how 430 women-owned businesses were funded over their lifespan. It includes a mix of young and established companies; just over half (51%) of the businesses surveyed were launched 21 or more years ago.

While the 1% figure may sound shocking, it actually aligns with what we know about the breakdown of venture capital dollars. Indeed, in 2016, women got just 2.19% of all VC funding. Historically, those numbers have been even worse: Of 6,362 companies that received venture funding from 1991 to 1996, only 31 deals were with women-led ventures, according to a 2001 study for the U.S. Small Business Administration.

So, if women aren’t using VC, where is the money coming from? The majority (68%) of those surveyed by EY and WPO say they used personal savings to fund their companies. A bank or line of credit was the second most common response, at 27%. About 22% incurred personal debt, and 18% received a loan from a family member or friend. Meanwhile, a mere 2% or so used private equity, according to the study, which was conducted November 2016 through January of this year. (Participants were permitted to choose more than one response.)

More than three-quarters of the entrepreneurs surveyed have generated between $1 million and $20 million in annual revenues, with 14% reporting over $20 million.

Venture capital’s funding gender gap is clearly a serious problem, but it’s worth considering that many women consciously choose to avoid VC and private equity money, says Lisa Schiffman, the co-founder of EY’s Entrepreneurial Winning Women program. For some female entrepreneurs, funding their company independently can be a “source of pride”—and perhaps more importantly, a way to remain the primary decision maker in their business, she says.

Sarah Kauss, the CEO of S’well, a popular stainless-steel water bottle manufacturer, is a prime example. Kauss, whose company was a part of the study, used personal funds to grow her business—a decision she says she made in order to “maintain control.” And her choice seems to have paid off: She says the company brought in $100 million in revenue in 2016.

“I have the luxury of owning 100% of the business,” she says. “In the early days it wasn’t because I didn’t have access to the capital, but I didn’t think it was right for me and my business. I really wanted to maintain control—creative control, control over distribution, and where the product was sold.”

Laura Zander, CEO of a yarn company called Jimmy Beans Wool, is another woman who has produced millions in revenue without the help of venture capital. In 2001, she and her husband “ditched the dot-com rat race of Silicon Valley,” she once wrote in the New York Times, and started the company with the $30,000 they had in savings. Jimmy Beans Wool was also a part of the EY and WPO study.

“There’s one side of me that wants to grow this business so fast. But there’s another part of me that wants to have a life, and be a renegade and do things my way,” she says. And even after talking to “various companies” that were interested in investing in the startup, “we couldn’t figure out an investment balance that felt like it was worth giving up control,” Zander adds. Jimmy Beans Wool had $8 million in revenue last year, she says.

Schiffman also notes that many of businesses in the study “are not in a typical mold of a venture-backed company.” That can refer to industry—a large segment of the VC world focuses on tech or tech-related companies—or location, as venture-funded businesses tend to cluster on the east and west coasts, namely in New York or California.

“If you’re not in a hotbed, it just may not be part of the conversation,” she says.

The Encore – Chubb: Social Engineering Fraud

As an employer, you seek smart, helpful, and trusting people with which to grow your business.

Unfortunately, this means you or one of your employees may be more susceptible to being targeted and tricked into releasing confidential information that could be used to hack into the company’s network by someone who has manipulated them into helping them commit fraud–otherwise known as social engineering fraud.

Think this couldn’t happen at your company?  Think again. The Federal Bureau of Investigation Internet Crime Complain Center (IC3)*, exposed losses for U.S. companies totaled more than $960.7 million, and more than $3 billion worldwide between October 2013 and May 2016, through a social-engineering fraud called the business e-mail compromise. Victims ranged from small businesses to large corporations.

Chubb shares that by becoming more aware of the different types of encounters that could be socially engineered, as well as practical tips and preventative measures, you can make sure employees within your company are never unwittingly helping the wrong person.

*Source: FBI Public Service Announcement, June 14, 2016

WPO Guest Blog – Women’s History Month: A Time of Celebration and Recognition

By: Lina Gottesman


Men working with women will only add to the success of the business since sharing diversity of ideas leads to more creativity and success.”  – Marsha Firestone, Ph.D., President & Founder,  Women Presidents’ Organization and Women Presidents’ Educational Organization

I was very glad to play a part in this year’s Women’s History Month. As a woman leading a woman-owned business in a non-traditional field for over 28 years, I always welcome the opportunity to assist other women in realizing their potential.

As chair of the New York Women’s Chamber of Commerce (NYWCC), I was delighted to moderate the organization’s annual forum, State of Women in Business: Unlocking the Door to Success, held at Columbia University Business School. The event drew a crowd of 70+ established and aspiring women entrepreneurs, eager to hear the panelists speak about their paths to success and the ways they met and overcame challenges along the way.

I believe strongly that any woman who has achieved success has an obligation to offer a helping hand to women just starting out and to the next generation.“Believe in yourself, and don’t let anyone tell you that you can’t do something,” is my mantra. As my parents instilled self-confidence in me, I always did my best to do the same for my daughter. She has clearly passed the message on to her daughters.

I often invite my oldest granddaughter, Sarah, 16, to events where she has a chance to see large groups of high-achieving women. I am so proud to see that she is never intimidated, only inspired. Last year, when Long Island Business News honored 50 Top Women in Business, Sarah said, “I thought it was amazing to see all the successful women there are and to have my Grandma be one of them. I hope that one day I can be just like them.”

We know that she will.

Fortune: These Are The 50 Fastest Growing Women-Owned/Led Companies In the U.S.

By: Madeline Farber

Ellen Latham never thought her love of fitness would result in owning one of the fastest-growing businesses in the United States.

Latham, who owns a boutique fitness chain called Orangetheory, has snagged the No. 1 spot the annual ranking of the fastest growing women-owned or led businesses released by the Women Presidents’ Organization (WPO) and American Express on Thursday. Though this Orangetheory’s first time at No. 1, the Florida-based company is not a newcomer to the list; it was ranked No. 3 last year.

The list, which is in its tenth year, ranks companies based on both percentage and absolute growth. To qualify, businesses must be privately-held, woman-owned or led, and have reached an annual revenue of at least $500,000 as of Jan. 1, 2012. The 50 companies generated a combined $7.2 billion last year, up from $75 million in 2007, the first year the list was compiled.

Latham co-founded Orangetheory with just $50,000 from her personal savings in 2010. Since then, the business has flourished: In 2016, Orangetheory reported $451 million in revenue, up from $87 million in 2014— success Latham never truly expected.

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“We hit the ground running when we decided to franchise the company,” she says. “But I never thought it would explode to where it has.”

Orangetheory now flaunts 630 locations across the U.S., and has spent the last year breaking into the international market. “It’s been the biggest reward, but biggest challenge,” she says of expanding outside of the U.S.

Orangetheory is known for its metabolic training tactics—the roughly 60-minute, fat-burning classes are a blend of strength training and cardio, using exercise equipment like treadmills, indoor water-rowers, and free weights. Participants wear a heart-rate monitor, which is synced with monitors in the studio to see real-time readings.

“People are getting dramatic results in short period of time. That’s why the studios are jammed and we can’t open enough,” Latham says.

While the business on the list range across a wide variety of industries, there is one thing they—and the women who lead them—have in common, according to WPO president Marsha Firestone: innovation. “It’s definitely one of the characteristics that these women have that drive growth,” she says.

As for Latham’s advice to other aspiring female entrepreneurs, especially to those who have a great idea later on in life? “I was 53 when I started Orangetheory. So why not you?” she asks.

Top-ranked Orangetheory is followed by Pinnacle Group, an IT workforce solutions firm based in Dallas, which has remained in the No. 2 spot for the second year in a row. IT services firm Technology Concepts Group International, a newcomer to the list, was ranked No. 3. You can check out the full list here.

The Encore – PNC Wealth Management: How To Teach Your Kids the Value of Money

Talking to your children about money when they’re young can help them make good choices later. PNC’s Jennifer Dempsey Fox shares tips for how parents can teach valuable financial lessons to kids of all ages.

Whether your kids spend money like it’s burning a hole in their pocket or consistently save it for a rainy day, having frank conversations about how they earn, save and spend money can be crucial for their financial success later in life.

“As a parent, money is one of the hardest topics to discuss with your kids, but it’s also one of the most important,” said Jennifer Dempsey Fox, a mother of two teenagers and national managing director of wealth strategy for PNC Asset Management Group.

Few schools have formal courses dedicated to money management—and it shows. American teens scored below average on global financial literacy assessments, according to a study by the Organization for Economic Cooperation and Development. If not improved, this lack of knowledge could lead to financial problems in the future.

The solution? Experts agree that as a parent, talking to kids about money is a good start.

Teaching kids the basics of money when they’re young helps them develop a good foundation. Then, when they’re older, it becomes easier to have more nuanced discussions.

These conversations become particularly important when your kids receive money for holidays, birthdays or special occasions and must make decisions on how they will spend – or save – that money.

Let Cash be King

Saving money can be an abstract concept for some children under age five. However, most children at that age are learning about taking turns and being patient. You can maximize these life lessons by explaining that patience now can help them buy something they want later.

Every time your kids receive money, encourage them to set aside some to spend, some to save and some to share with others in need. Asking them to designate their money in this way helps them think about both their short-term and long-term goals.

It may help to keep their money in clear containers so your child can see it adding up (or dwindling). There also are digital tools to help your child visualize this, such as PNC’s “S” is for Savings® account. Your child can “fill” three jars (saving, spending, and sharing) and see images of coins and dollar bills in the jars.

Giving young children cash to use for small purchases can make a difference. When they have to hand over a dollar for a treat in the checkout line, it teaches them that money is more than just a number. Remind your child that a dollar spent on a treat now means they won’t have that dollar to spend on a toy they have been planning to buy later.

Teach with Tech

Teenagers typically can handle more planning when it comes to their money, so it’s not as imperative for them to pay strictly with cash. Fox recommends loading allowance or gift money on prepaid cards.

“Paying with plastic means teens have to keep track of their balance and educates them on the modern money system,” she said. Since prepaid cards have a set limit, teens learn to budget their money to make it last.

When teens want to buy something, they can check the balance on their card before making a decision. “This method has prevented a lot of conflict in our house,” Fox said. “I ask my son or daughter if they have enough money to cover the expense and the answer is simple from there.”

If your teen doesn’t already have one, open a checking account for/with them. Keep in mind you may need to be a co-signer on the account if they are a minor. Teach them to use online banking to track and evaluate how they spend their money and emphasize the value of setting aside savings.

Click here to read more.

WPO Guest Blog – Leadership Lessons: Always play the long game

By: PNC Bizwomen

FRI Blog

Congratulations to Beth Bronfman CEO and managing partner of View, and WPO Board Member, on this feature!

Leadership Lessons is a series of Q&A sessions with members of The Committee of 200 (C200), an invitation-only group of the world’s top female entrepreneurs and C-suite executives who work to foster, celebrate and advance women’s leadership in business.

Beth Bronfman, director at large of the C200 governing board, is CEO and managing partner of View, a New York advertising, interactive and branding agency that creates category leaders. Bringing brand expertise and insights acquired throughout her career, including as vice president of advertising at Macy’s New York, Bronfman has built her agency into a multimillion-dollar firm. She has earned accolades including the Presidents Award of the Women Presidents’ Organization (WPO) and the Enterprising Women of the Year Award.

What’s the most important business lesson you’ve learned, and how did you learn it?

Early in life, I learned the lesson that has become the foundation of my company’s culture: It’s not about me. Delighted to be visiting my father at his office in the Empire State Building when I was 12, I burst through the doors, blurting out who I was and why I was there. Overhearing my spirited entry, my father took me aside and reprimanded me, explaining that I needed to look beyond myself and be considerate of the person I was speaking to — in this case, the receptionist. In that moment, I realized how important it is to look at things through the perspective of others. In business, this means checking our egos at the door and understanding that it’s always about our clients — not about us.

How did you develop your leadership style?

My parents, as well as my grandparents, were exceptional role models. They taught me to be kind, generous and collaborative above all else. They instilled in me the confidence to know that I could do anything in life, but also helped me understand that caring about people comes first. As I began working for various bosses, I discovered that people want to work with leaders who treat them with respect and kindness. As a leader, you don’t have to be the smartest one in the room, but you do need to care about and listen to the thoughts, feelings and opinions of others.

How do you hire?

I listen to my gut. Meeting someone face-to-face is much more telling than any resume. I like to share a meal and spend time socializing to see who candidates really are. When we are hiring at View, I always look for people who are smarter than me in their area of expertise and who exhibit flexibility, the desire to grow and the ability to communicate.

How do you continue to grow personally and professionally at this stage in your career?

We should all strive to grow every day of our lives. I grow by participating in leadership groups, including C200 and WPO; networking and connecting people; consulting my advisory board; reading; and asking for help when I don’t know an answer.

What advice do you share with young business leaders?

Remember that it’s about the long game, and have the vision to take your business where you want it to go. That means standing back and working on your business, not just in it; regularly evaluating whether you have the right people in the right seats; building strategic alliances with partners whose expertise contributes to your long-term growth; adding value to your business every day; and conscientiously monitoring your profitability. Also: Get a line of credit when you don’t need it so that it’s there when you do. But most importantly, create a culture of relationship building: At View, we serve as brand stewards for our clients, because no matter how your business evolves, maintaining a strong client focus is vital to your success.

PNC is a proud sponsor of The Committee of 200, which includes 500 of the world’s most successful female corporate executives and entrepreneurs, whose companies generate more than $1.4 trillion in annual revenues. To read similar stories or to sign up to receive PNC’s Insights for Women in Business e-newsletter, visit

Fortune: Startups With Female Founders Grow Faster

By Victor Lipman

Startup companies with female founders “almost universally outperformed their male-only counterparts.”

As an accompanying chart shows, at four out of five high-growth revenue breaks, female-founded companies showed stronger overall performance.  “The fastest growing companies,” the survey report noted, “at 200%+ growth, are 75% more likely to have a female founder.”

These are among the key findings from the 2017 Annual Start-up Report from TINYpulse, an employee research firm.The research, which examined startup culture, had a number of interesting insights:

  • Benefits and work-life balance didn’t drive retention so much as did management transparency and employee happiness.
  • Of various management attributes, transparency was the one most highly correlated with growth in revenue and headcount.
  • Company leaders typically felt their culture was performing better – in terms of transparency, valuing employees, etc. – than employees did. This finding didn’t surprise me at all, as my experience over a long management career was that senior leadership often feels considerably more positive about their operation than does the rank and file. (Perhaps the Kool-Aid in those c-suite water fountains?)

But to me by far the most intriguing finding was the strong gender disparity linked to financial performance.

I asked David Niu, the founder of TINYpulse, for some perspective on this disparity. His response: “This corroborates Sheryl Sandberg’s assertion that ‘endless data shows that diverse teams make better decisions’  – and it’s also backed up by similar research from MSCI, and from Noland, Moran and Kotschwar.”

This latter research rang a bell with me, as I’d read the study and written about it for Forbes back in February 2016, with The Best Reason Yet To Increase Women In Business Leadership. I remember being impressed at the time with both the scale of the study (21,980 firms in 91 countries) and the strength of its findings. “For profitable firms,” the report concluded, “a move from no female leaders to 30% representation is associated with a 15% increase in the net revenue margin.”

Indeed, the real takeaway for me in both these studies is nothing as simplistic as “women are smarter than men” or anything of that nature – but that the power of diverse perspectives and a broad range of thinking – whether gender, ethnicity, culture, experience, age, etc. – is of substantive value for something as complex and multifaceted as a business enterprise.

All worth keeping in mind at a time when issues like immigration and cultural diversity are receiving far more emotional national attention than at any period in recent memory.

Victor Lipman is an executive coach and author of  The Type B Manager.