If you think pitching your business to VCs sounds intimidating, just imagine pitching it to the Investor-in-Chief.
Today is the first ever White House Demo Day, a gathering of more than 90 startup founders who will showcase their innovations in front of President Obama. The White House event is a take on the many "demo days" of the startup world, during which entrepreneurs pitch business ideas to prospective funders. There is one difference, though (aside from the attendance of the President)—today's event includes a particular focus on women and minority founders.
“Unlike a typical day where the funders are listening to pitches, it’s about celebrating these entrepreneurs, and talking about their journeys,” said Megan Smith, the U.S. CTO of Office of Science and Technology Policy (OSTP). “There’s just extraordinary talent across the country…this is an opportunity to lift up those stories,” she said.
As part of the Demo Day, President Obama issued a call to action to both the public and private sector, according to Tom Kalil, deputy director for technology and innovation at the OSTP. “We let a broad group of people know that we were going to be doing this and encouraged people to get in touch with us if they had ideas,” he said on a press call earlier today.
This call to action resulted in the announcement of slew of new women-focused initiatives in the private sector. More than a dozen major companies, including Amazon, Google, Facebook, Microsoft, Airbnb, KIND Health Snacks and Indiegogo used the event as springboard to launch new actions to ensure diverse recruitment and hiring of women at all levels. Initiatives detailed in the White House fact sheet ranged from committing to the “Rooney rule,” a recruiting practice in which at least one woman and one minority are considered for each position, to more specific ideas and goals.
For example, Google announced that it will hold its own Women’s Demo Day, which will feature women-led startups from around the country pitching to a group of judges at the Googleplex, with the goal of driving investment and providing Google mentorship and introductions to each entrepreneur. Meanwhile, IBM is committing to expanding its relationship with Girls Who Code to introduce the next generation of female software developers to cloud computing innovation.
Outside of tech, founder and CEO of KIND Healthy Snacks Daniel Lubetzky is earmarking $3 million to invest in female entrepreneurs. He has committed to investing in three women leading emerging health-conscious food startups. Beyond financial support, Lubetzky says he will also provide ongoing strategic guidance and direct access to a network of mentors.
In the public sector, the Small Business Administration is expanding the InnovateHER Women’s Business Challenge to more than double the number of local competitions. The SBA's goal is to identify products and services that have significant impacts on the lives of women and families, have potential for commercialization, and fill a need in the marketplace. As part of this expansion, Microsoft will more than double the prizes awarded.
The White House was clear that it isn’t just trying to increase gender diversity for its own sake, but in an attempt to boost U.S. economy. “Hiring women isn’t just the right thing for companies to do – it’s more profitable…and creates greater shareholder value,” Smith said.
Companies with women in senior level positions tend to do better than those without any gender diversity, Smith pointed out, citing research by First Round Capital, a major VC firm with more than 300 portfolio companies. According to First Round Capital's analysis of its own portfolio, companies with at least one female founder provided them with 63% better returns on investment than companies with all-male teams. Furthermore, of First Round’s ten most valuable portfolio companies, three had at least one woman founder.
Currently, only 3% of America’s venture capital-backed startups are led by women, and only about 4% percent of US-based venture capital investors are women. “We have a real opportunity [for improvement] here,” Smith said.
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