FOUNDER BLOG: LET'S DO THE TIME WARP AGAIN
IT FEELS MORE LIKE 2013 THAN 2023 WORKING IN THIS "ECOSYSTEM"
It's just a jump to the (figurative) left, and then a step to the (figurative) right. It may really drive you insane, but Let’s Do The Time Warp Again!
By: Heather Wentler - Co-founder & Executive Director of Doyenne
Many of you know that when I talk about Doyenne and how we’re connected into the greater ecosystem I use the analogy of being on loner island. You also know that I say that I enjoy most days on loner island. I don’t like getting involved in the drama or politics of some of the groups that are considered “A game” when it comes to entrepreneurship, we have tried to pull out of some of that over the years because of behaviors and treatment. I enjoy being invited to the other islands that align more with Doyenne’s mission and those we serve, and will gladly jump in my boat to visit or put up the tiki torches to invite them onto our island.
Nothing I’m about to say isn’t anything most of us doing this work don’t already know. The landscape and ecosystem have shifted again in 2023. And for some of that shift, I feel like we’ve time warped 10 years backward.
Follow the Money
There’s been so much work done and progress made in addressing gender, racial and ethnicity barriers in entrepreneurship. When Doyenne first started in 2012, it was because of the gender barriers Amy and I were witnessing and personally experiencing in the entrepreneurial ecosystem across Wisconsin. When we pivoted and started building the organization in 2014 into something larger than just our behind-the-scenes work it was because we were told by the community that it was time and that we could make a difference. One of our first goals was that by 2023 Wisconsin would be a Top 10 ranking state for women entrepreneurs. Spoiler alert, we made strides as a state and then fell backwards
In 2014, Wisconsin ranked last for women entrepreneurship (tied with Mississippi), and overall we ranked 43rd for entrepreneurship. I always say this in coaching sessions; data can be used and construed for and against any topic. These rankings are hard to track and figure out the truth. According to one study, Wisconsin currently ranks 31st. Another study says Wisconsin is ranked 41st for women entrepreneurship. These studies typically use metrics around employee numbers, revenues, and outside capital raised as "entrepreneurship”. And they must be registered as an LLC, Corporation, and majority shareholders identify as woman/women. Sometimes they’re taken from census data (which has very low reporting numbers) or are independently studied usually based on who pays for the information.
Let’s break those traditional metrics down…On average, only 20% of women-led ventures have more than 2 employees. Most businesses are “lifestyle businesses” meaning they’re not scaling to bring or need investor dollars; they’re operating at cash even or minor profits over actual revenues from their annual budgets. Many women-led ventures don’t even have LLCs and operate as sole-proprietorship, so they don’t have an EIN (Employer Identification Number) which takes them out of reporting metrics. And many go into business with their husband/male life partner at a 50/50 ownership, therefore not making them eligible for “women-led” status (depending on state or agency’s requirements).
Looking deeper into investor or outside capital brought into a venture, it’s a similarly ugly picture. Only 2% of the $34 Billion dollars invested in startups in 2022 was awarded to solely women-led ventures. About 16% went to ventures with mixed-gender founders. This is a continued downward trend since 2019 when it was at its highest of ~13% of all Venture Capital dollars went to women or mixed-gender founding ventures.
We also know that the number of deals overall went up for women-led ventures, but overall, dollars awarded went down. And the number of deals for mixed-gender founders has been going down since 2020, which means either there are fewer ventures led by those founders seeking investment dollars or even fewer being selected to be awarded funding.
Please note that these numbers do not reflect angel investors, only venture capitalists. One reason for this is how angel investing operates and how numbers are tracked, and since you can be an angel without being part of a fund or some other SEC regulations, these dollars can be reported differently on people’s individual taxes and not as formally as venture capitalists.
Further, only 4% of all companies ever will go after or fit criteria for investor dollars, yet we continue to make that seem like the only way to be a successful entrepreneur. (Want to learn more about this, register for our Investor Accelerator program)
We also know that bank loans and lines of capital are incredibly necessary for ventures. Yet a study found that 59% of small businesses reported being in “fair or poor financial condition” when accessing bank funding. A staggering 85% of businesses (an increase of 20% since 2019) report experiencing financial difficulties.
All of this compiles to approximately 58% reporting as not having their financial needs met.
Who is an Entrepreneur?
People ask me all the time if they’re an entrepreneur or if they’re small business owners. A simple answer usually is you’re both. But, depending on who you’re talking to, there is much gatekeeping around the word entrepreneur. It’s definitely changed over the past few years to include a little bit of everyone - from “side hustle moms” to freelancers to Multi-level Marketing and franchise owners.
Traditionally, an entrepreneur was considered an individual who launched a product or service within the technology sector that required investor dollars and would scale big and sell, making everyone money, within 3-5 years. The Small Business Association’s (SBA) guidelines for a small business is any independently owned for-profit enterprise that employs less than 500 (to 1,500) employees and less than $41.5 million in average annual receipts. There are also many studies around who (based on gender, race & ethnicity) feels comfortable being called an entrepreneur vs a small business owner.
Doyenne falls on this continuum of believing an entrepreneur is a business owner leading a product or service company (for-profit or non-profit) with a new or innovative approach within their industry and/or target market. We look at scalability as defined by the entrepreneur, not solely by the number of employees, revenues, or outside capital. They haven’t bought into an existing business or put new labeling on an existing product.
I could also have a whole section on the terms venture vs. business, who and why those terms are used, and by whom. I’m sure there are many Fortune, Entrepreneur, and Forbes articles I could reference to start..(snark, snark)
Why Time Warp Again?
What we saw in 2020 through mid-2022 was a change happening. We saw agencies and funders changing and addressing inequities in the entrepreneurial landscape. More grassroots agencies and "non-traditional founders" were receiving funding than the “good ole boys club” - that doesn’t mean they were receiving what they needed to operate or that the traditional agencies were receiving less, but that it was being recognized as a change needed.
We saw more entrepreneurial incubator and accelerator programs addressing the diversity of gender, race/ethnicity, and business industry to be admitted. And we saw more social-innovation ventures (those “feel good” companies) securing investment and recognition.
What I have continued to see in 2023 is a regression. We haven’t learned anything from those changes that were made that were benefiting many more people than they had before. We’ve returned to “high growth” and “investor ready” as the buzz words to be accepted into programming. As a few people have told me lately, “The guilt money is gone and we’re all back to fighting each other while the few still benefit on the top with no questions asked”.
We have countless panels and publications that are labeled something like “the ‘non-white man’ entrepreneurial experience” to showcase and tokenize women and marginalized individuals as different or separate from the “regular” experience. Let me back up a minute on this one, I’m not saying anyone’s experience isn’t worthy of being heard. But when you say “This story can only be told here” vs all together on one stage, that’s diminishing the experiences and continues limiting people’s viewpoint under the guise of “we don’t want anyone to feel uncomfortable.” I don't need another “Women_” feed to follow on social media or be told “this is where you’re supposed to go” at conferences.
When I say that Doyenne is on loner island, it’s a choice and also because we’re trying to break away from where people think we should be. We’ve never done well with “staying in our lane” and we for sure have muff’d up along the way (and will continue to do so and hold ourselves accountable for it) as we break free and also expand our island. We want to build more partnerships that are true and not frenemies.
It’s time to time warp again for all of us to listen more and adapt to our society's actual appearance. The “I’m too old to change” is tired and tells me I don’t want to work with you. The "that's above my pay grade" means you don't feel that change will actually happen within the company you work for nor are you willing to fight for it. If we actually want to see Wisconsin as a Top 10 State for Entrepreneurs, we need to let go of the people and businesses that haven’t adapted and are holding our entire state back. Those ones that we just bankroll with the “they’ve always been here so we’ll continue to fund them” or “they remind me of myself” instead of holding them accountable to the same standards and assessments as newer players in the ecosystem.
It’s just a jump to the (figurative) left and then a step to the (figurative) right. It may really drive you insane, but Let’s Do The Time Warp Again!