Last week’s Women in Green Forum in Pasadena brought together over 500 women (and yes, some men) of different backgrounds with experience in various sectors. Many panels were focused on industries ranging from packaging to waste diversion, and one informative panel focused on finance—fitting as various data suggest that women make about 80% of consumer purchases. Even if that number is on the high side, perhaps women also have the know in determining which products can succeed better than others.
Three women representing firms behind the various stages of funding spoke last Wednesday afternoon. They stressed the opportunities and challenges that come with outside funding, as well as growth industries for the next several years.
Heather McCormick of Pasadena Angels gave the perspective of an angel investor—often the next step in growing a business after an entrepreneur starts with seed money and/or funds from family and friends. McCormick represented one of Southern California’s oldest angel capital groups; the group over the years has invested US$20 million into 60 companies. Angel investors look to put their money into companies that are not yet capital-intensive, and where that capital can get the company into a significant phase into their development. Through the years the Pasadena Angels have made a number of clean technology investments, with the most recent ones in water management technologies.
Funk Ventures, the Santa Monica-based venture capital business that focuses on wellness, medical devices, recreation, and the clean tech markets, sent its partner, Fran Seegull, to discuss VCs’ point of view. She emphasized that entrepreneurs in the clean tech and wellness space need to figure out how to push their products outside of areas like Santa Cruz, Berkeley, Santa Monica, and Cambridge, where these companies are preaching to the choir. The riddle young companies have to solve is to how to personalize environmental and other issues to consumers—and in the end prove the performance, not virtue, of their products or services.
Sandra Itkoff, Senior Vice President of Angeleno Group, a Los Angeles-based private equity firm that invests in high-growth alternative energy and energy efficiency technologies. When companies are at the revenue stage and need even more capital to expand, they have an opportunity with firms like Angeleno Group, which has worked with a broad portfolio of companies from turbine manufacturers to carbon capture and sequestration (CCS) firms. Itkoff emphasized the United States’ energy security, with the explanation that large growth potential exists in solar, wind, and battery technologies, largely because many of these companies are in Europe and East Asia. To import these technologies is expensive and foolhardy, so there still is opportunity in these spaces for young local firms
In the end, these three leaders and investors agreed that before young companies ask for outside capital, preparation is key. Entrepreneurs must understand the advantages and expectations that come with receiving outside capital; a company’s management must have a proven, vetted track record; and an understanding of the market is key. Intense passion is not enough—getting beyond the what of a product and emphasizing HOW a new technology or product offering can grow are necessary to gain that available, but difficult to attain, capital that companies often need to reach that next level of success.