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The Cash Ceiling

[whitespace] Robin Fash-Boyle
Christopher Gardner

Treasure Hunt: Accrete Software creator Robin Fash-Boyle says venture capital is the key to making her entrepreneurial vision come true. But VCs are not used to cutting deals with female CEOs.

Always a vice president of marketing, never a CEO. Local women entrepreneurs explain why Silicon Valley's vaunted meritocracy finds few women who merit venture capital funding.

By Lauren Barack

LAST FALL, Robin Fash-Boyle had a bottle of champagne chilling in the fridge for her six unpaid employees and herself. She was 10 days away from her first venture financing of $3.5 million. And she had just raced as the first woman in the Sand Hill Derby--cameras snapping pictures of her pixieish figure cloaked in pink boas, being pushed to the starting line by none other than venture capital cupid Guy Kawasaki.

She seemed to have attained the "it girl" status that Silicon Valley periodically bestows on a young entrepreneur who happens to be female. But today, her employees work for other companies, and Fash-Boyle is still waiting for venture funding for her start-up, Accrete Software. Two new venture firms say they're interested--though Fash-Boyle has cut her first round of hoped-for financing to $1.5 million--"to better prove ourselves," she says.

At 9:40am on a recent weekday morning, her new part-time assistant, Janine, fills boxes with papers from Fash-Boyle's home office while Fash-Boyle orders computers with her MasterCard. It's moving day, and with some funding from private investors, Fash-Boyle has opened Accrete's first office, instead of the living room of her single-story ranch house in Cupertino. It's a big step, but having previously founded two other companies with private investment, Fash-Boyle knows that her third company will need a healthy infusion of venture capital funding to grow the way she has envisioned.

Yet for many women entrepreneurs in Silicon Valley, the search for venture capital is often an ill-fated quest. Between 1991 and 1996, women received only 1.6 percent of the $33.5 billion in venture capital invested in high-tech companies, according to a study by Wells Fargo Bank and the National Foundation for Women Business Owners.

Silicon Valley may be breaking the rules of the old economy, but when it comes to letting women crash through the glass ceiling, it appears some of the old barriers persist. There's the stereotype that women aren't competitive enough to lead and that they choose family over work. Silicon Valley touts itself as the ultimate meritocracy, but clearly a boys club persists in the venture capital community that women say they can't enter, even as they try to build one of their own.

Lieutenants, Not Generals

A WOMAN who was nicknamed "Bob" by her father because she was the one he could teach about cars, Fash-Boyle finds the role of decision-maker quite natural. Yet the odds of a woman-led company getting venture funding are not good. In 1995, just 3 percent of all companies with women CEOs received venture-capital funding. By 1998 that number had risen only to 4 percent.

The odds skyrocket to 21 percent for companies that have men at the helm and women in top management roles.

"I would say the number is increasing, but slowly," says Darlene Mann, a partner and venture capitalist at Onset Ventures. "It's going to take a long time to reach parity."

As one of six venture capitalists at the Menlo Park-based Onset, Mann receives about 30 business plans a month. Women CEOs pitch about 10 percent of the ideas she hears, and over the years Mann has developed a theory about why women shy away from the leadership role.

"In general, women are raised to take on supporting roles," Mann says. "They're raised to be fantastic lieutenants but not generals. And our risk profiles are different. Women are less comfortable going for broke, and much more comfortable following someone else going for broke. Ask a woman why she wants to found a company and she'll say, 'I want to make this a kinder and gentler place.' And that's dangerous, because start-ups are already disadvantaged. We tend to be more empathetic and look at the whole picture rather than the business picture."

Fash-Boyle thinks that's ridiculous. As a leader, she's managed to keep her staff motivated and excited enough about Accrete to continue to work for free. Her assistant Janine does get paid for the three days a week she works, but came in on her day off to help Fash-Boyle move the office.

"You have to be willing to make them feel like there's an opportunity and that they want to be part of that opportunity," Fash-Boyle says. "And at our company, family is very important. With that you get a level of commitment from people and then they'll do anything for you."

All in the Family

WHEN A COMPANY IS in the start-up stage, 16-hour days, seven days a week, are the norm. Food is brought in to employees, naps are taken under desks, and social lives disappear. Venture capitalists expect this level of commitment from their investments, and while women don't hide that they have children, some choose not to advertise the fact lest it hurt their chance of being funded. Raising a family under these conditions can be difficult, if not impossible.

But Fash-Boyle is trying. Accrete's new offices are close to her daughter's and son's schools so she can still pick them up and spend part of the afternoon with them, make snacks and be there to talk about ideas.

"My kids need a strong role model," she says. "It's a shame that people don't view that as critical."

Dinner conversation can include businesses they'd like to start or ideas they want to create. Her son wrote his first business plan on their home computer--a proposal for a public park--when he was 8 years old.

But Fash-Boyle's life is not typical for a CEO. Accrete is still in the beta stage of building its first product and has fewer than 10 employees. As the company grows, she may find that a shift will need to take place in order for her to remain as the chief officer of her company.

The demands of family touch the life of venture capitalist Mann as well. After years of listening to pitches, moving to the other side of the game has certainly crossed Mann's mind more than once. As a new mom with a week-old son, though, she has shifted her focus. Going for broke means giving everything to your work. And when it comes to raising a family, the woman often takes on that supporting role. For now, it's one Mann wants.

"I think about starting my own company all the time," she says. "But the hard part for me is the issue of family. Being a CEO in a start-up is a 200 percent commitment."

From all appearances, Excelle Liu has the model life of a Silicon Valley entrepreneur. As co-founder of the San Jose-based software start-up Global Sight, and also the mother of a 4-year-old son, Liu works six days a week and still finds time for her family. But it's probably because her husband, Jorden Woods, is the other co-founder and because Liu has taken the role of vice president of marketing instead of CEO.

While she feels her experience is better used as a marketer than as the CEO, she also admits that being a woman gives her less of a choice.

It was Woods who pitched the start-up to Tim Draper at Draper Fisher Jurvetson, securing a $3 million first round of funding. And it is Woods who acts as the "face to the client," Liu says.

"It's more demanding on women," says Liu, her long dark hair pulled back in a soft ponytail. She wears the standard start-up uniform: khaki pants and jeans shirt. "Yes, Jorden is the CEO. But running the household, getting my son to school, is all me. As a mother you can't avoid that."

Boys Club

CHOOSING JORDEN to be the CEO of the company, Liu believes, may have opened more doors for the young company. "There is still a stereotype among men that it's rare to see a good woman CEO or founder," Mann says. "But I see encouraging signs. There's a lot more emphasis on women in sports. They're more comfortable in leadership roles--going out and getting killed on the front lines in order to get something done. Not all men are willing to do that, but more men have that attitude."

Women can also be shut out of the social structure where many deals are made. Venture capitalists don't fund companies whose unsolicited business plans are mailed to their doors. Deals are signed over breakfasts, and pitches are heard only after an introduction from a trusted source.

"Silicon Valley is driven by social networks," says Margarita Quihuis, the executive director of the new Women's Technology Cluster, a start-up incubator in San Francisco. "The challenge to many women is that they still don't have entry into that."

In order to gain access and get ahead, Global Sight's Liu has seen women change the way they act so they appear less feminine--and more like men.

"You have to be aggressive," she says. "You have to drink with them, smoke cigars with them. People who don't do that have less of a chance to get the information they need."

Gender Relations

BEING SHUT OUT of that world means women operate with fewer contacts and fewer skills to help them get their start-up off the ground. But doors are starting to open. As Mann did, some women have become venture capitalists and gained access to the world of money. Others are building social networks of their own through the Internet, seminars and groups like the Forum for Women Entrepreneurs. Both Fash-Boyle and Liu are part of Palo Alto-based FWE's eSeries, eight seminars over six months for early-stage entrepreneurs, which offers a forum where women can hear other success stories, perfect their pitch, shape their business plan and ask for advice.

With about 130 women entrepreneurs involved, it's clear that soon there will be plenty more names to join those of high-profile Silicon Valley women like Kim Polese, Katrina Garnett and Ellen Hancock.

Mann doesn't question how crucial networking is to the success of a start-up. "I have seen networking among women and it's been much more effective lately," she says. "And if you have been successful in some other aspect of the industry, the opportunities to network are certainly there. As more women get out there, it is less of an anomaly and more expected."

To Mann, ever the venture capitalist, the success of a start-up always comes down to one simple formula. "Really, venture capitalists don't care about gender," she says. "They care about whether or not they make money."

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From the April 15-21, 1999 issue of Metro.

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