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Boss moves: How women entrepreneurs are winning big

Michelle Scarborough heads up the Women in Technology Venture Fund at BDC Capital.
PHOTO CREDIT: Courtesy of BDC Capital.

More and more women entrepreneurs are seizing opportunities in the market, backed by investors who are working to accelerate the pace of change. BDC Capital’s Women in Technology Venture Fund is one of those investors. Since its launch in 2017, the $200-million fund — one of the world’s largest dedicated to investing in women-led tech companies — has reached more than 7,000 women entrepreneurs and investors. Here, Michelle Scarborough, managing partner of BDC Capital’s Women in Technology Venture Fund, shares where she’s seeing huge wins.

You have more than 25 years of experience as a founder, investor and executive. What’s it like for entrepreneurs raising money now, compared to when you were first starting out?

What’s the same is that building businesses that scale globally is hard. Finding talent is hard. And if you’re in the venture space, building a venture capital-backed business to a sizable exit is hard. While there are many more women investors, it is still a male-dominated field. What’s different? Women-in-technology funds. More and more women are creating venture-backable businesses — we didn’t see that in a real way even five years ago. We’re seeing the destabilization of many older industries and new industries emerging. Traditional banks are embracing fintech. Supply chains are decentralizing. Sustainability and climate are becoming essential parts of everyone’s business. This creates enormous opportunities for entrepreneurs.

What have been the biggest wins for women?

Being able to invest in women entrepreneurs and show that it’s possible to build a huge venture-backed business has created knock-on effects. Women entrepreneurs now have role models who’ve done it before, who can share what they’ve learned. There are many more women sitting around boardroom tables with their investor hats, talking about how to help women entrepreneurs — all entrepreneurs, actually — to be successful. But we still have a long way to go to make sure we’re all on stable footing.

You lead a team that’s predominantly women. What difference has that made at BDC?

We strive to have diversity of thought, diversity of skill and diversity of background. We plan for it. That means we want to have men at the table, too — we want our team to be as diverse as the market we serve. When we make decisions on opportunities, we make them as a team. We ask each company’s management team tough questions. Who they are and what they do and why they want to build this company, and also how they’re thinking about diversity. Is a team coachable? Do they want to partner, or do they just want the money? Our interests are in building a relationship for the long term. As VCs, we’re in the relationship business.

According to Pitchbook, global funding for women founders dropped 31 percent in 2020. What did you see in Canada during the pandemic?

It looks like it has rebounded fairly well, but it’s still relatively flat overall. We did see a big uptick in valuations, which has benefited a number of women-led companies. There were a bunch of exits in Canada, as well, so we’re starting to see more money flowing into women-led tech companies. But we still have a long way to go to disrupt the bias that women and diverse founders face when they’re looking for capital.

We still hear horror stories, like investors asking women if they’re planning to get pregnant. How do we get past that?

The only way we’re going to solve it is to have checks and balances on yourself and those around you. If you’re a VC listening to a presentation and someone on your team is doing something that is making the entrepreneur uncomfortable, you actually need to call it out instead of letting it slide.

Research shows women-led startups generate 10 percent more revenue than male-founded startups after five years. What accounts for that difference?

When you’re selling to a market, if your team does not look like that market, they’re not going to understand it. Also, women are very good at building relationships. They’re customer-service oriented. If you talk to the customers of any of our portfolio companies, they love the CEOs and the leadership teams and the salespeople in those organizations. Our companies all do an amazing job of that. Catherine Dahl at Beanworks is very authentic. Raquel Urtasun at Waabi is an incredible leader. They care about their people, they care about their families and they care about their customers — even when they’re having tough conversations. It makes for a stronger company.

What doesn’t create change?

When women try to just do it themselves. We’re investing in people we believe in, people we trust are going to build something great. But sometimes they just don’t trust the investors back. If you’re going to partner with someone, there has to be a level of trust and commitment to seeing things through. What does success look like for you? When we no longer need to have specialized funds for diverse, underrepresented founders. Just funds investing in entrepreneurs who want to build great things for Canada, for themselves, for the economy and for the ecosystem.



Making change

Leaders of portfolio companies from BDC Capital’s Women in Technology Venture Fund talk disruption, impact and the power of just being yourself.

How are things changing for women entrepreneurs?

“Entrepreneurs have become vastly more sophisticated over the past five years. The founders I’m meeting now have technology and business models more aligned with venture needs than I have ever seen in my career.”
— Lisa Shields, CEO and founder of FISPAN

“It’s not changing fast enough. Einstein famously said, ‘You can’t solve problems with the same thinking that created them.’ Systemic barriers need to be broken down — we need diversity. We’re trying to go as fast as we can using the venture world, but we’re also trying to break it down a bit at the same time.”
— Laura Zizzo, CEO and co-founder of Manifest Climate

What impact has an investment from the Women in Technology Venture Fund had on your business?

“It’s allowed us to take risks, grow faster and tackle harder objectives than ever would have been possible.”
— Katherine Homuth, CEO and director of Sheertex 

“The world had just entered its first COVID- 19 lockdown when we received our funding. Having this investment allowed us to keep forging forward, avoid preventative layoffs and navigate murky pandemic waters.”
— Alana Frome, CTO and co-founder of HiMama

What advice do you wish you had when you were first starting out?

“I can only ever do my best and be myself. If I show up as someone who people don’t expect, or am less a leader than what they demand, that’s their problem to figure out. Not mine.”
— Donna Litt, COO and co-founder of Uvaro

“Recognize your business will throw you some curveballs — a pandemic, for instance. From day one, you must define, report, analyze and optimize your numbers. This is your business telling you how it’s really doing, and you are the narrator of this story. Staying connected increases your chance for success.”
— Daniella DeGrace, CEO of ProcedureFlow 

This article has been produced in partnership with BDC Capital.

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