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02/23/2010 1:00 am

Sheconomics

The VC Community Is an Insider's Game, by Kay Koplovitz

The founder of Springboard on the importance of creating a playing field for women entrepreneurs.

Editor’s Note: Kay Koplovitz is the Founder of USA Network, a company launched in 1977, and later expanded to introduce the Sci-Fi Channel and USA Networks International. Koplovitz is presently the Chairman of the Board of Liz Claiborne Inc., a Board Member of CA and she has served on the boards of Oracle, Nabisco, Instinet and General Re. Koplovitz created Springboard Enterprises in 2000, which has presented over 400 companies that have raised over $5.billion in new capital. She is also the co-founder of Boldcap Ventures and the author of, Bold Women, Big Ideas. Koplovitz is a frequent speaker and contributor on media, capital formation, corporate governance and leadership.

Recently, Professor Vivek Wadhwa, a visiting scholar at UC Berkeley, posted an article on TechCrunch, a popular Silicon Valley website that is titled "Silicon Valley. You and some of your VC’s have a gender problem." I am grateful that someone is finally taking notice that the VC ranks have a bias wholly in support of men.

Ten years ago, some colleagues and I launched Springboard Enterprises as a platform from which to launch women entrepreneurs in high-growth businesses into the venture capital markets. We did this because the statistics were so heavily favorable to men – 98.3% of all venture funding in 1998 went to men. Women starting companies in media, life sciences, biotech, devices, diagnostics, robotics and alternative energy that required equity funding were faced with enormous odds against them.

Armed with these devastatingly bad odds for women, I set out to find out why women were faring so poorly. After interviewing more than 50 VCs from around the country, I came to three conclusions: 1) There didn’t appear to be an inherent bias against women; more simply there was no connection between women and the VC community; 2) there were few women VCs, less than 3% of those interviewed were women and therefore little or no network of women VCs to go to for women entrepreneurs; and 3) VCs invest in people they know or are in their networks – hence men.

That’s it. There was an almost universal disconnect. As one private equity colleague reminded me just this week, the venture capital market is an insider’s game.

So faced with that realization, Amy Millman, now president of Springboard Enterprises, and I set out to create a network supportive of women entrepreneurs in high-growth industries.

We launched Springboard officially in January 2000 with our first Venture Forum. To our own amazement, 350 entrepreneurs applied to be trained in venture capital and become presenters. Ultimately, 26 were chosen, trained, matched with coaches to tune up their businesses and presented. The day we stepped onto the stage at the Oracle Conference Center in Redwood City, we knew it was show time. We also knew that, like opening night on Broadway, the critics’ reviews of the companies presented would determine whether the Springboard platform had legs or not.

Reviews in the VC business, like Broadway or Hollywood, travel by word of mouth. Instead of tickets to the performance, "Box Office" is determined by investors putting their capital into these companies in exchange for equity.

So what happened?

These women entrepreneurs blew their socks off. Of these 26 companies, 22 were funded, two companies merged their businesses. one woman sold her company and only one woman was left unfunded. Importantly, the first Springboard company to reach the IPO market presented in this class. Kathleen Chien, representing 51Job, the Monster.com of China, took the company public in 2004, and reportedly returned 18 times their investors’ money in less than four years.

In the intervening ten years, Springboard companies have had remarkable results. The nonprofit venture catalyst platform has screened more than 4,000 companies and selected 407 to be presented at our venture forums. Each entrepreneur is trained at our bootcamp, where we peel back the veil of the venture capital community and teach them how to present their companies. Each is assigned coaches who follow through with them until the day of presentations.

The results have been spectacular – 83% of the companies presented raise funds and 80% are in business today. These companies have raised over $5 billion in capital, and a third have already provided positive liquidity events for investors. Importantly, these companies now generate more than $4 billion in revenues and have created more than 10,000 jobs. This is our venture capital network at work.