Battling Bias Against Women-Led Firms

[IMGCAP(1)]

SAN DIEGO—FundAthena, a San Diego-based investor marketplace, is rooted in the concept that gender-diverse real estate teams perform better than strictly male ones, but funding is biased against them. The firm, the first marketplace platform to emerge under the SEC's Reg A+ ruling, will focus on finding Main Street investors for gender-diverse companies to address the drastic funding disparity typical of this industry. FundAthena's co-founder, president and CEO Kim Folsom and co-founder Rod Turner tell GlobeSt.com exclusively why this is their focus and what they're doing to further gender diversity in our industry.

GlobeSt.com: How do you perceive women's roles in finance currently?

Folsom and Turner: Today, women have demonstrated that they have the talent, commitment and expertise to leverage the latest innovations and changing market trends to build excellent businesses. However, due to the gross disparity in access to growth capital, a majority of them are unable to achieve their goal of growing large enterprises. The current state of capital access for women-led business is heavily biased against them. According to the 2014 Diana Report, women-led businesses receive less than 3% of venture capital. Management teams that include one woman receive only 17% of venture capital, compared to 80% of venture capital going to businesses run exclusively by men.

[IMGCAP(2)]

GlobeSt.com: How are women's roles in finance changing for the future?

Folsom and Turner: FundAthena is setting the agenda for gender-diverse funding by deliberately changing the rules that have limited women-led businesses. Our goal is to raise capital for those with gender-diver management teams and companies that commit to make themselves gender diverse. Instead of ignoring the inability of women-led businesses to access growth capital, we are inverting the situation and exclusively funding those same companies. It's about time someone did!

We hope our focus on correcting the extremely difficult bias that great women entrepreneurs and executives face, we will cause a tidal wave of public focus and change for the good. That might sound ambitious, but the situation where so many talented women in the US are simply not able to leverage their acumen for their good and for the good of the US economy simply has to change, and now is the time. If not us, who? If not now, when?

GlobeSt.com: How do gender-diver companies make the real estate industry better?

Folsom and Turner: Several comprehensive research studies, including the McKinsey Women 2.0 study, have examined thousands of companies across a variety of industries and concluded that gender-diverse teams demonstrate superior productivity and financial performance compared with gender-bias teams. According to the same study, companies led by gender-diverse teams generate 200% better operating margins. The fact is that when women get to be a balanced part of the real estate business, more real estate companies will prosper. Efficiency, productivity and results will improve significantly.

GlobeSt.com: What else should our readers know about this topic?

Folsom and Turner: FundAthena is adapting the existing “brick-and-mortar” IPO underwriter model to the Internet. FundAthena utilizes Reg A+, which allows individual investors to buy shares in private companies. This is the method we use to raise capital for gender-diverse teams. Reg A+ was announced in March and through this decision mid- and late-stage companies are now able to sell up to $50 million of stock to the public after registering with the SEC.

To deliver on our promise, FundAthena is the first entrant into the new SEC Regulation A+ marketplace for gender-diverse companies. Reg A+ suits successful early- and mid-stage companies that need to raise from $2 million to $50 million of growth capital per year and some very special startups. We have coined the phrase “simple public offering” or SPO for Reg A+. It explains the approach in a nutshell and is less intimidating.

SPO/Reg A+ fills a void. There has been a huge gap in the capital-raising markets between startups; on the one hand, there are those served primarily by angel investors and VC firms, and on the other there are very late-stage, large companies that are served by the conventional  IPO underwriting market, raising on average $300 million per IPO. Reg A+/simple public offerings fit neatly between these two. Capital raises will range from $2 million to $50 million per company.

FundAthena is the first capital-raising platform to enter the Reg A+/SPO market. We are accepting women-led companies that want to raise capital right now. We are also building our investor membership and our community of enthusiasts who want to mentor, advise or invest in our companies.