As the associate director of the University of Maryland’s Dingman Center for Entrepreneurship, Elana Fine represents two kinds of rarity: First, she’s helping broker important start-up deals out of a mid-Atlantic university, not a West Coast venture firm.
Second, she’s a woman working in the start-up world. Women represent just 12 percent of all angel investors, and women-owned ventures account for 12 percent of entrepreneurs seeking angel capital, according to a recent report by the Center for Venture Research at the University of New Hampshire.
Last year, the Dingman Center’s network of angels invested in eight regional companies, making it the most active year for the group since its start in 2004. Among the recipients were Veenome, a video indexing and discovery platform, and Brazen Careerist, an online video networking site.
We caught up with Fine at the Dingman Center, which produces the Business Rx column for Capital Business , to find out more about the university’s investing plans — and why there’s so few women in her field.
Describe the various projects that are part of the Dingman Center.
We focus on helping students, alumni and entrepreneurs launch and fund their business. We look at it as back-of-the-napkin ideas to their first million in financing.
First, every Friday we have Pitch Dingman, in which students can pitch their business ideas to resident experts. Twice a semester, all the companies that have pitched can come and compete. We award $2,500 to the best pitch.
Then we have the Cupid’s Cup business competition on March 30th. It’s sponsored by [UMD alumnus] Kevin Plank from Under Armour, and it awards $25,000 to a student or alumni entrepreneur who operates their own business. All of our winners are still in business.
Finally, we have the Dingman Center Angel network, which is the largest regional network of angel investors. They come once a month to campus to hear presentations from companies looking for up to one million in financing. [Neither the companies nor the investors have to be connected to the University of Maryland.]
What types of start-ups are you seeing now that seem especially viable?
Mobile security is big because of the bring-your-own-device system. You walk out of your building with all of your secured data on your phone.
We’re also seeing a lot more focused on the enterprise, as opposed to so many consumer-facing apps. Consumer apps and daily deals were the last 18 months.
To what do you attribute the Dingman Center’s record investing year?
There were a lot of companies that had been started in the past two years in a difficult economic environment. A lot of those companies were able to bootstrap and inexpensively get their products to a point where they had proven their concepts through having users or revenue. They could prove to the investors that they had a clear value proposition, beta customers and had thought through how to go to market.
It’s also helpful that there’s also such exuberance in early-stage and angel investing on the West Coast, and D.C. has lagged, but we’re starting to feel that excitement here as well.
Why are there so few women in venture capital and angel investing?
Venture capital has traditionally been a bit of an Old Boy network. But people who go into venture capital are people who have previously worked in technology start-ups. That field itself has not had that many women entrepreneurs.
In any organization, people tend to hire people who seem like themselves ... so until you have some more successful women entrepreneurs who want to go on to work in venture capital, it will continue to be harder. However, I don’t think it’s a purposeful exclusion on the part of venture capital firms.
It’s a cycle that has to be broken, but the key thing is that you encourage women and teenagers to start businesses and vocalize their ideas. There need to be more women who look at high-growth fields when they’re looking for jobs.
That’s why organizations like Network for Teaching Entrepreneurship and others are so great. Springboard has also been instrumental in helping women entrepreneurs make the right connections.
We just need a woman Mark Zuckerberg.
Are male venture capitalists slow to invest in female-headed start-ups?
I think venture capitalists are more and more attracted to women entrepreneurs. They’re unique, and anything that sets your business apart is an advantage. There aren’t as many women entrepreneurs, so that’s one way they can diversify.
But there is one thing: You don’t call someone a male entrepreneur, you just call them an entrepreneur.
A woman entrepreneur is a minority, and any time you assign a modifier for a minority, is that helping that person, or is that a disservice? I don’t know.
How can women’s start-up ideas garner more support from male venture capitalists?
There is a tendency that the ideas that women think of come out of their lives ... whether it’s raising their children or working with their house or with food. There’s a cycle where women sometimes don’t think big enough with their idea, so even if their idea can be broad, they make it seem small. They need to find a way to make it so it wouldn’t take a woman investor to understand it.
The key thing in angel investing is to demonstrate a very large market. Women can do two things if they’re looking to raise angel or VC money — think about technology or other high-growth markets, and when they talk about customer acquisition, they think beyond just their local area. Think of something that will be a nationwide product.
Let’s say fashion — that’s just one vertical, but you can see potentially many more future verticals. Think about the same technology and how it can apply more broadly.
But in general, this is a great time to be an entrepreneur. There are a number of people willing to help entrepreneurs, and it’s a great time to take some risks and test out your ideas.