The $10,000, second-place prize Christabelle Dozeman and her team received last spring at the Michigan State University Burgess New Venture Challenge was enough to launch her plant-based food company Veg-N in Lansing, Michigan.
Outside of the pitch competition, she doubts she’d have been able to raise as much as fast.
“Especially for a business like ours, which is food and very startup, there’s no way that we would get investment money (elsewhere),” she said.
Dozeman already graduated herself when she entered the pitch competition with her co-founder Jonathan Ristola, who attended the university, she said. The competition offered them not only the guaranteed chance to present their idea, but also to improve it, she said.
For now, COVID-19 has put a wrench in their plans to open their food truck. Instead, Dozeman is working to open a drive-thru location, a pivot that was made possible by the competition money, she said. She and Ristola are entering more pitch competitions around the country, many of which are open now that they are virtual, in hopes of raising a few more thousand dollars.
Dozeman is one of thousands of women participating in university pitch competitions nationwide, based on research by George Washington University’s Office of Innovation & Entrepreneurship (LINK). The high participation rates — and frequent wins at the university level s– tands in stark contrast to what happens after school, when budding women entrepreneurs hit the brick wall of gender bias and closed social circles.
Less than 3% venture capital funds went to companies with a woman as part of the founding team, according to Pitchbook data cited by Fortune.
Universities seemingly find it easy to involve women. More women are participating in pitch competitions as universities develop strategies to get more women involved. In 24 of the 27 competitions that universities provided information for, at least 30% of team members were women, according to 2020 data gathered by graduate fellow Janssen Keiger for the GWU Office of Innovation and Entrepreneurship.
Many young, female entrepreneurs are jumping at the chance to get training, and maybe more importantly, the opportunity to share their entrepreneurial proposal in front of investors through pitch competitions. In many cases, you don’t even need a fully developed and financed plan to get your foot in the door– just an idea and a one-minute pitch.
Take Rebecca Roman, who participated in Michigan State University’s pitch competition last spring. She and her partner Tony Froman had an idea for a 3D roleplaying adventure video game and stepped into the school’s Burgess Institute for Entrepreneurship and Innovation for a shot at making it a reality.
The institute helped them develop a business perspective to their pitch, and her team ended up walking away with $5,000 in prize money from the Burgess New Venture Challenge. This feat landed them a spot in the Conquer Accelerator program at MSU that provided the company with another $20,000.
At the end of it all, they gained a concrete business plan for both their game, Edge, and company, StarForged Studios, mentors and many investor possibilities, including Red Cedar Venture, a venture fund which is a subsidiary of Michigan State University Foundation.
After these programs, Roman and her team are continuing to fund and build their startup. They are wrapping up a round of family and friends funding, where they raised about $15,000, and are preparing to pitch to publishers. They hope to get half of their $3 million budget from Angel investors and the other half from a publisher.
Roman said their company likely won’t seek venture funds. These capitalists are not typically interested in games because they only make money for a few years. Not to mention, there’s no guarantee the second game released is as profitable as the first, so investors typically only invest on a game-by-game basis, versus gaining a stake in a gaming company, Roman said.
Roman said StarForged Studios is in a good spot for raising enough to produce Edge and are planning to release the game in 2022.
The Bias In Venture Capital
For women looking for venture funds, a chance to pitch is important, especially at high-profile universities such as Massachusetts Institute of Technology, where venture capital investors and other funders tend to flock in order to scout out the newest advancements, said Lakshmi Balachandra, a Babson College associate professor who researches female access to venture capital funding.
She tracked several years of MIT $100k pitch competitors, and what she found is that even though women made up less than half of the participants, they were just as likely as men to receive funding, and just as likely to win.
“There was no penalty for being a woman,” she said. “There was no outright discrimination.”
But this isn’t the case outside of competition playing fields. Venture capital is already “the Black Swan event,” according to Balachandra, and it’s typically reserved for those with the right connections. When more than 90% of venture capital investors are men, women tend to get left out.
Masculine pitching seems to be the only way to get many investors’ attention, Balachandra said.
“Anyone that seems feminine in a pitch is less likely to get interest from venture capitalists,” Balachandra said. “Because we have this assumption of success and the standard of quality as being bounded by what men typically do.”
Women also tend to run into different problems than men, which spark different entrepreneurial solutions. But many times, women’s ideas are deemed unprofitable because the issues don’t directly affect the male investor, she said.
While women pitch across all fields, they do tend to pitch consumer-based companies more than men, said Lori Fischer, the associate director of MSU’s Burgess Institute. Competitions create space for these ideas to get seed funding, which can sometimes be enough if the company has small expenses.
What pitch competitions offer that the outside world does not is that guaranteed spot in front of an investor. When someone is pitching through a competition, the need to meet a venture capitalist through social connections or convince an investor that their idea is worth the first meeting falls away. As long as their idea can get them to the competition, entrepreneurs have a shot.
Helping Women Flourish
Some schools have created women-specific spaces to help them succeed while pitching in front of mostly-male investors. Based on a couple of examples, it’s relatively easy to change messaging to attract women.
At George Washington University, Ash Asher, an associate director of innovation & entrepreneurship, founded GWomen a year and a half ago as an initiative to give women the tools to pitch successfully.
The organization strives to teach women skills such as talking about themselves as experts in their industry, building connections in the startup and profession worlds and conveying their ideas when pitching.
“This confidence is not something that women have the same social foundation for,” Asher said.
Many universities are continuing to make more efforts to up the number of women entering these competitions. George Washington University increased its number of women taking part in its New Venture Competition this year to 53% from 37% after diversifying its marketing strategy, Asher said.
MSU has shifted its marketing for the Burgess Institute to use less tech-style imagery and avoid the word pitch to get more female students interested.
Women tend to evaluate risk instead of just going for it, Fischer said. Whereas, men are more likely to try no matter what the outcome is. So, by creating a less risky environment around the competitions and groups designed to help women develop their pitches, more women are likely to join.
University entrepreneurship programs are following in the path of longer-established efforts to increase women’s presence in science fields. One effort to increase the number of women and other underrepresented minorities in computer science programs is the Building, Recruiting And Inclusion for Diversity Initiative, or BRAID, run by AnitaB.org and Harvey Mudd College. Fifteen schools across the nation are receiving funding to participate in the program to attract more underrepresented students to these colleges and universities.
Between 2014 and 2018, women’s enrollment in computer science programs at these schools increased by 108%, according to BRAID research led by UCLA professor Linda Sax. The study revealed that women’s enrollment is actually “outpacing the overall enrollment growth at all 15 BRAID schools,” according to the research report.
Universities should be having honest conversations about what the investment environment looks like for women, Asher said. Even as more women participate and win competitions, they must often work harder than men to distinguish themselves. Preparation is important because women are more likely than men to get questions from investors about their risk factors, Asher said.
Dozeman said she’s felt this need to prove herself. “As a woman, you really have to know your stuff that much more, to be able to present it effectively just because you’re already looked at as not as competent,” Dozeman said.
Beyond competitions and venture funds, women can turn to Angel investors, a group that’s made up of around 15% women compared to venture capitalists’ less than 10% women, or other organizations across the country that are aimed at providing women entrepreneurs funding, Balachandra said. Still, the search for funding can get exhausting, she said.
“(Women) are doing all the right things,” Balachandra said.
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