WES 2019, Growth in the Age of Unicorns & Zebras
Earlier this week I had the opportunity to attend the Women’s Entrepreneurship Symposium 2019: Growth in the Age of Unicorns & Zebras at the University of Nevada, Reno. It was a great event with wonderful keynote speakers including Angela Lee from 37 Angels, Astrid Scholz from Sphaera Solutions, and Justine Siegal, the first female coach in Major League Baseball.
Funding Unicorn, Lifestyle, and Zebra Companies
The whole symposium was dedicated to having an open conversation about the challenges and state of women finding money to fund their ventures in the current funding climate around Unicorns, Zebras, and Lifestyle Companies. In the world of investing in start-ups, the popular “unicorn” model for investing usually takes the stage. The unicorn model is the idea that angel investors invest in a large array of high growth potential companies with the hope that one will become a unicorn. A unicorn is a start-up company that reaches a $1 billion dollar market value or more and investors get a huge ROI (return on investment) through the sale of the company or through an IPO (initial public offering). Some start-ups that reached unicorn status in 2018 that you may know include: Postmates the food delivery service, Lime electric bicycles and scooters, and FormLabs the SLA 3D printer company.
Companies that don’t have rapid and large growth potentials typically get pushed off the stage. Companies that you interact with on a day to day basis, for example your local bakery, coffeeshop, or yoga studio, are often referred to as lifestyle companies. Typically lifestyle companies are not technology based, but that’s not a hard and fast rule. Lifestyle companies may become profitable down the road but will never grow past a small team operation and become a growth company. Funding for lifestyle companies typically comes in the form of loans, however these loans often have a high collateral requirement.
There is a large (and growing) sector of companies that are neither lifestyle companies, nor do they have the rapid growth potential of unicorns. Instead they have the potential to grow at a sustainable rate and become profitable… still sounds pretty good from an investment standpoint right? Zebras are valuable to our capital economy because they are solving meaningful problems in society while growing jobs and often leveraging developing technologies. To learn more about Zebras, this is a great article from Quartz on what Zebra companies offer.
Women in the Age of Unicorns and Zebras
In the age of Unicorns and Zebras, the roles and challenges of women entrepreneurs are very real. Female founders received only 2.2% of US venture capital in 2018 as of November. Male investors have unconscious biases towards women entrepreneurs, not out of malice, but because they don’t fit the look of what investors are used to historically. Furthermore, when the pitch is good, women more often get asked about their preventative plans to avoid failure instead of their growth potential plans. My favorite way to address the issue of subconscious bias against female entrepreneurs is to get more women on the other side of the table… women who are investing. 37 Angels is exactly that, a community of women investors that invests in all types of companies.
On a broader scale, changing the investment landscape to see the value of Zebra companies is a challenge in and of itself. Zebra companies become especially relevant to women entrepreneurs because women entrepreneurs are more likely to start lifestyle and zebra companies than unicorn-potential companies. This isn’t a surprise, women founders are in it for the long win and are more likely to be interested in benefiting society. As more forward thinking investors actively seek the potential of zebra companies and female entrepreneurs, we just might build a healthier investment and venture capital landscape.
To keep learning about Nevada’s Innovation Ecosystem, subscribe to my blog or add my blog to your favorite RSS feed viewer at crystalvharvey.com. If you’d like to chat about ways to support sustainable growth companies and women in entrepreneurship in Reno and Nevada, I encourage you to reach out to me on LinkedIn or Twitter.
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