NYTimes, The Risk-Taking Edge of West Coast Women
I had the pleasure of speaking with Pamela Ryckman for quite a while this past week. She had told me that this article, The Risk-Taking Edge of West Coast Women was coming out this week in the Small Business section of the New York Times. She plans on writing more on this topic and I am sure we will see a much longer article on women investors sooner than later.
There is no doubt that there is a difference between the West coast and the East coast. Those differences are seen in VC firms on both coasts too. There appears to be many influential women on the West Coast who have found themselves with tons of money and are using some of it to invest in start-up companies. Bravo. The women in the West Coast are not seeing the same thing from their peers on the East Coast. Perhaps they are different peers.
Many women on the West Coast have worked in large technology companies for years and have not only made a lot of money but when they leave the organizations such as Cisco, Google, Microsoft, etc, they fundamentally have a better understanding on how the tech companies work vs a woman who has spent years at an investment banking company. Certainly in the West Coast, SF, ever high school kid knows what a VC is. The tech industry to Silicon Valley is like the film industry to Los Angeles. NYC has more top notch industries that I can count on one hand. Exploding tech companies with a slant on content, huge media industries such as IAC, music labels such as Sony, a huge food industry with leaders such as Danny Meyer and the Bromberg Brothers behind Blue Ribbon Bakery, the garment industry, etc. Need I go on?
I am thrilled that these women have found each other and are putting money into start-up companies. The more, the merrier. There is a quote in that article that says "women on the East Coast may be highly philanthropic but most of their money is managed by outsiders. There's no passion around directing it. Instead of giving $100,000 to my favorite charities, maybe I should give $50,000 to charities and invest $50,000 in two start-ups I'm really excited about" Keep in mind that young entrepreneurs who take $50,000 at an angel level also have to manage the people they are taking money from. Helping people grow their businesses isn't always a slam dunk or that easy. People who have been investing in this area for 20 years still make mistakes.
One other quote is "It's a cultural, entrepreneurial revolution. It's the gold rush, and we want in." It might seem like a gold rush but keep in mind that nobody talks about the companies that have three rounds of cash poured into the company at higher valuations each time and then end up closing. Those companies are basically written off the balance sheet of an investor or VC. Nobody talks about the thousands of businesses that are pitched daily that nobody invests in because maybe nobody thinks it is a great idea except the people pitching it. We just hear about the winners. We rarely hear about the losers.
There are many women in the East Coast providing cash for many things that they are passionate about perhaps not all tech related. The tech industry on the East Coast is a small microcosm of NYC. That isn't as true for the West Coast.
Bottom line: I can hardly wait to meet the women who are taking their net worth and putting it into young companies on the West Coast. It isn't easy and it isn't always successful. It just isn't an easy slam dunk.