Women help other women get their businesses off the ground
Elaine Turner's clothing boutique at Dallas' Preston CenterBy ANGELA SHAH / The Dallas Morning News
Founders of the Texas Women Ventures Fund had a simple enough goal when they started out six years ago: nurture women-owned companies that might otherwise fall short of their potential. With enthusiastic financial backing from prominent North Texans – largely women, but also oilman Ray Hunt – the fund has raised $5.2 million and made its debut investments in three local entrepreneurs last year. For companies that receive the money, the fund can be a financial lifeline.
Traditional sources of capital often hesitate to lend to firms like the Warrior Group, an upstart DeSoto construction firm that builds modular housing. "That's what I loved about the Texas Women Ventures Fund: It's made of entrepreneurs," she added. "They are people who understand the risk associated with doing business with growing businesses." Joy Wallace, president and chief executive of Joy Foods Inc., and JoAnn Brumit, chief executive and chairwoman of Karlee, form the rest of the fund's inaugural group.
So far, the Texas Women Ventures Fund has handed out only $3 million, small potatoes for a venture capital fund. But it comes as most VC money flows to male entrepreneurs. In 2006, women held majority stakes in 776,283 of Texas' privately held firms. These women-owned companies generated more than $131 billion in sales and employed 971,909, according to the Center for Women's Business Research.
Yet, across the nation, firms headed by women execs receive only about 4.3 percent of the dollars doled out by venture capitalists, according to Dow Jones VentureSource, a research firm in San Francisco. The Texas Women Ventures Fund was founded just after the tech crash in 2001 by four women – a banker, an entrepreneur, a public-relations professional and a venture fund manager. The fund attracted money from 40 area professional women, along with $2 million from Mr. Hunt.
Its mission has to do with more than doling out money, the fund's managers add. Each of them faced obstacles in their careers, so they want to provide mentoring and other intangible support to the next generation of women executives. The fund focuses on companies with an established track record, and those with more of an Old Economy bent. Recipients must already be profitable and have $5 million to $50 million in revenue. The Texas fund's debut came at the same time that other ventures sprang up to target women businesses, said Leslie Grossman, co-founder of the Women's Leadership Exchange in New York, which itself started in 2002.
"Women that have been successful are looking to invest in other women," she said. "In previous generations, there were so few women at the top of organizations, there was the idea that if you helped someone you might lose your position." Now, "There are more women at the top," she said. "It's not as threatening as it used to be." With the help of ventures such as the Texas fund, women are learning how to build business networks, in addition to the social and family ones they always had, Ms. Grossman said.
The Warrior Group's Ms. Warrior-Lawrence, 40, teamed with her husband to found the company in 1997, after her previous employer decided to move to Houston. Her father had owned his own business, so the Lawrences thought they, too, would try the entrepreneurial route. They led the company from infancy through a growth spurt in recent years that resulted in an exclusive subcontracting partnership with construction giant Hensel/Phillips. Included is a $40 million contract for the construction and installation of new barracks at Fort Bliss in El Paso.
The $1 million Warrior Group received from the fund enabled Ms. Warrior-Lawrence to virtually double her staff, filling such key positions as chief financial officer, and adding an estimation and design team as well as sales managers. That investment has helped boost revenue from $15 million in 2006 to an expected $42 million this year, she said. "We would not have been able to achieve the growth that we've had without the capital," Ms. Warrior-Lawrence said. "There's just no way." Joy Foods' Joy Wallace, another $1 million venture fund recipient, also added to her executive staff, as well as purchasing additional manufacturing equipment. Based in Dallas, Joy Foods started in 1998 as a spinoff of Pizza Hut, after that company decided to focus on its core restaurant business.
For nine years, Joy Foods supplied school cafeterias and military commissaries. Now entering its 10th year, the company has formed an alliance with Papa John's Pizza and started to develop its own product line. The advice as well as the money from the fund has helped, said Ms. Wallace, who is 56. "The fund is chock full of women who have all kinds of levels of expertise. The support they offer is amazing." Agreements between the fund and the companies it invests in are confidential and vary from company to company, said co-founder Whitney Johns Martin.
But, generally, the money is essentially a loan at a rate of about 14 percent, to be repaid in three to five years. The fund's total return over the years on any particular investment would be between 25 percent and 35 percent, depending on the perceived risk, Ms. Martin said. Should a recipient falter, the fund's syndicate is prepared to step in and help right the ship – but not in traditional VC fashion, which often involves replacing management with one of the fund's choosing, she added.
"We bring in resources to help current management," she said. "We look at it as a collaborative effort. Others will bring in their own team players to take over." The fund's managers say they do not want a piece of the entrepreneur's company. That's something women CEOs, in particular, seem to find attractive. Women often have shied away from turning to venture capital, said fund co-founder Cynthia Pharr Lee. "They got into the business to be their own boss," she explained. "But they'd grow to a certain level and stop."
Beyond the money, simply gathering businesswomen together can provide a powerful boost, helping them make connections and create networks, Ms. Lee said. An illustration of that, she added, came after a showcase the fund hosted last May, looking for potential fund recipients. The event was held at Elaine Turner's clothing boutique at Dallas' Preston Center. Eileen Kelly, who has a boutique of her own, was one of the attendees. Neither boutique owner won money from the fund.
But from that meeting, a connection was formed. When Ms. Turner's store grew large enough to move to NorthPark Center, Ms. Kelly heard of the move – and her boutique graduated to the Preston Center space.
Founders of the Texas Women Ventures Fund had a simple enough goal when they started out six years ago: nurture women-owned companies that might otherwise fall short of their potential. With enthusiastic financial backing from prominent North Texans – largely women, but also oilman Ray Hunt – the fund has raised $5.2 million and made its debut investments in three local entrepreneurs last year. For companies that receive the money, the fund can be a financial lifeline.
Traditional sources of capital often hesitate to lend to firms like the Warrior Group, an upstart DeSoto construction firm that builds modular housing. "That's what I loved about the Texas Women Ventures Fund: It's made of entrepreneurs," she added. "They are people who understand the risk associated with doing business with growing businesses." Joy Wallace, president and chief executive of Joy Foods Inc., and JoAnn Brumit, chief executive and chairwoman of Karlee, form the rest of the fund's inaugural group.
So far, the Texas Women Ventures Fund has handed out only $3 million, small potatoes for a venture capital fund. But it comes as most VC money flows to male entrepreneurs. In 2006, women held majority stakes in 776,283 of Texas' privately held firms. These women-owned companies generated more than $131 billion in sales and employed 971,909, according to the Center for Women's Business Research.
Yet, across the nation, firms headed by women execs receive only about 4.3 percent of the dollars doled out by venture capitalists, according to Dow Jones VentureSource, a research firm in San Francisco. The Texas Women Ventures Fund was founded just after the tech crash in 2001 by four women – a banker, an entrepreneur, a public-relations professional and a venture fund manager. The fund attracted money from 40 area professional women, along with $2 million from Mr. Hunt.
Its mission has to do with more than doling out money, the fund's managers add. Each of them faced obstacles in their careers, so they want to provide mentoring and other intangible support to the next generation of women executives. The fund focuses on companies with an established track record, and those with more of an Old Economy bent. Recipients must already be profitable and have $5 million to $50 million in revenue. The Texas fund's debut came at the same time that other ventures sprang up to target women businesses, said Leslie Grossman, co-founder of the Women's Leadership Exchange in New York, which itself started in 2002.
"Women that have been successful are looking to invest in other women," she said. "In previous generations, there were so few women at the top of organizations, there was the idea that if you helped someone you might lose your position." Now, "There are more women at the top," she said. "It's not as threatening as it used to be." With the help of ventures such as the Texas fund, women are learning how to build business networks, in addition to the social and family ones they always had, Ms. Grossman said.
The Warrior Group's Ms. Warrior-Lawrence, 40, teamed with her husband to found the company in 1997, after her previous employer decided to move to Houston. Her father had owned his own business, so the Lawrences thought they, too, would try the entrepreneurial route. They led the company from infancy through a growth spurt in recent years that resulted in an exclusive subcontracting partnership with construction giant Hensel/Phillips. Included is a $40 million contract for the construction and installation of new barracks at Fort Bliss in El Paso.
The $1 million Warrior Group received from the fund enabled Ms. Warrior-Lawrence to virtually double her staff, filling such key positions as chief financial officer, and adding an estimation and design team as well as sales managers. That investment has helped boost revenue from $15 million in 2006 to an expected $42 million this year, she said. "We would not have been able to achieve the growth that we've had without the capital," Ms. Warrior-Lawrence said. "There's just no way." Joy Foods' Joy Wallace, another $1 million venture fund recipient, also added to her executive staff, as well as purchasing additional manufacturing equipment. Based in Dallas, Joy Foods started in 1998 as a spinoff of Pizza Hut, after that company decided to focus on its core restaurant business.
For nine years, Joy Foods supplied school cafeterias and military commissaries. Now entering its 10th year, the company has formed an alliance with Papa John's Pizza and started to develop its own product line. The advice as well as the money from the fund has helped, said Ms. Wallace, who is 56. "The fund is chock full of women who have all kinds of levels of expertise. The support they offer is amazing." Agreements between the fund and the companies it invests in are confidential and vary from company to company, said co-founder Whitney Johns Martin.
But, generally, the money is essentially a loan at a rate of about 14 percent, to be repaid in three to five years. The fund's total return over the years on any particular investment would be between 25 percent and 35 percent, depending on the perceived risk, Ms. Martin said. Should a recipient falter, the fund's syndicate is prepared to step in and help right the ship – but not in traditional VC fashion, which often involves replacing management with one of the fund's choosing, she added.
"We bring in resources to help current management," she said. "We look at it as a collaborative effort. Others will bring in their own team players to take over." The fund's managers say they do not want a piece of the entrepreneur's company. That's something women CEOs, in particular, seem to find attractive. Women often have shied away from turning to venture capital, said fund co-founder Cynthia Pharr Lee. "They got into the business to be their own boss," she explained. "But they'd grow to a certain level and stop."
Beyond the money, simply gathering businesswomen together can provide a powerful boost, helping them make connections and create networks, Ms. Lee said. An illustration of that, she added, came after a showcase the fund hosted last May, looking for potential fund recipients. The event was held at Elaine Turner's clothing boutique at Dallas' Preston Center. Eileen Kelly, who has a boutique of her own, was one of the attendees. Neither boutique owner won money from the fund.
But from that meeting, a connection was formed. When Ms. Turner's store grew large enough to move to NorthPark Center, Ms. Kelly heard of the move – and her boutique graduated to the Preston Center space.
Labels: Elaine Turner Handbags, women helping women, women in business
posted by i-GlobalMall.com, Inc. @ 4:47 PM
Links to this post:
Create a Link
<< Home