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Money Matters: Understanding Funding and Finance for Your Business

With Samantha Huang, Connie Evans, Kathryn Weinmann, and Miriam Warren

31 minutes

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Many local business owners are masters of their craft—whether that’s baking, fence building, or running a successful restaurant. But what they might not be experts in is finding the right funding at the right time—especially during times of crisis or exploding growth. This panel discussion from the 2022 Women in Business Summit covers the topics of finance and venture capital and the basics about fundraising and financing—from where to turn for capital to the basics of making a pitch.


Moderator: Miriam Warren, chief diversity officer, Yelp

For more on this session and beyond, check out these tips for financing your small business and pitching investors on the Yelp blog.

Samantha Huang Principal of BMW i Ventures

Samantha manages investments across AI and big data, autonomous driving, Industry 4.0, sustainability, and the next generation of human experiences at BMW i Ventures. She serves as head of content for the Emerging Venture Capitalists Association, the most active pre-partner nonprofit organization for empowering the next generation of venture capitalists, and is a licensed attorney in California.

Connie Evans President and CEO of AEO

Connie is a leader, strategist, activist, and social entrepreneur who has founded three organizations. In 1986, she was the founding president of the award-winning Women’s Self-Employment Project, the first and largest urban microbusiness development organization in the U.S. In 2000, she founded WSEP Ventures, a social enterprise-hybrid organization developed to serve as a catalyst for social change, economic development, and community empowerment. In 2007, she founded CSolutions Consulting, an advisory boutique specializing in solutions that address social change. She has been recognized by the World Bank, Clinton Administration, and Obama Administration as an authority in her field and is passionate about philanthropy and social change.

Kathryn Weinmann Vice President of Norwest Venture Partners

Kathryn focuses on seed, early, and late-stage venture investments in consumer internet with a specific emphasis on fintech, marketplaces, commerce, and real estate. Previously, she worked at NerdWallet on the business operations team, focusing on small business lending. Prior to NerdWallet, she was a strategy consultant at Deloitte, where she specialized in financial services and retail loyalty. Kathryn obtained a bachelor of arts degree in Spanish, financial economics, and corporate strategy from Vanderbilt University and an MBA from Stanford’s Graduate School of Business.

Miriam Warren Chief Diversity Officer of Yelp

Miriam is the CDO at Yelp, board chair of the Yelp Foundation, and serves on the boards for Common Future and ETR. She has been quoted in the New York Times, Wall Street Journal, Fortune, Mic, Good Morning America online, and other notable publications. She has also been published in the Stanford Social Innovation Review, Fortune, and Fast Company, and is a frequent speaker and moderator. Miriam is passionate about health equity and workforce diversity and inclusion.

Emily: This next session is going to be jam-packed with information about all things money. I’d like to welcome Miriam Warren, Yelp’s Chief Diversity Officer to the virtual stage, along with her panel of fabulous speakers. We have Samantha, Connie, and Kathryn. You guys can all bring yourself on camera and join me on stage. Miriam, I’ll toss it to you, take it away.

Miriam: Great to see you, Emily. Thanks so much for having us. I am joined by a fantastic panel of folks who are going to be able to sort of dive into something that I know many of you are very interested in, which is how to fund these great business ideas that you have, or how to obtain more funding so that your business can grow. I’m accompanied here by Sam Huang, who’s a principal at BMW i Ventures, Kathryn Weinnman, a Vice President at Norwest Venture Partners, and Connie Evans, who is the CEO of AEO, the Association for Enterprise Opportunity.

Miriam: So excited to have you all here. Sam, let’s start off with you, would love to hear a little bit more about your day-to-day work.

Samantha: Sure thing. Thanks so much for the introduction and I’m very excited to be here. I’m a corporate venture capitalist. So we have a $300 million fund with BMW i Ventures and I invest in C to series B stage companies that are within the intersections of automotive, supply chain, manufacturing, sustainability, and some adjacent areas. I’ve been doing this for about six or seven years. I’m also an attorney. So my daily job is just kind of focused on a range of tasks, whether it’s investment, meeting others, even doing some legal work. So I do a bunch of hodgepodge different things.

Miriam: Awesome. Well, so glad to have you hear, Sam, and excited to get into hearing a little bit more about your work. Connie, can you tell us a little bit more about AEO, and what you’re up to over there?

Connie: Sure. Hello, everyone. I’m Connie Evans with the Association for Enterprise Opportunity. We are the trade association for microfinance and microbusiness. We have over 2,700 member organizations, who provide capital and business support services, that we call trusted guidance, to underserved entrepreneurs across the country. We have member organizations in every state and we provide them with policies, with research, and innovations. We create new products, new delivery methods, things that their entrepreneurs need. AEO innovates to solve the pain points experienced by entrepreneurs and we get these resources out through our membership. I’m looking forward to talking with my fellow panelists and to the group here.

Miriam: Awesome. So glad to have you here, Connie. And Kathryn, are you with us? And are you able to tell us a little bit about what you’re doing over at Norwest Venture Partners?

Kathryn: I am, and I apologize, my video won’t turn on, but they’re working on it. So hopefully I’ll be able to hop on video shortly here. But just for the sake of time, a little bit about Norwest, we’re a large, old, multistage venture capital firm, been around since the 60s, we’re investing out of our 16th fund now, it’s a $3 billion fund really designed to be across all stages of growth seed to pre-IPO rounds. Usually investing behind tech oriented businesses, but there are some exceptions to that as well. And I come at it from a consumer oriented lens. So everything from sort of things in the food industry, to FinTech, kind of all over the fun consumer land.

Miriam: Awesome. Well, so glad to have you here, Kathryn. As you can see with these panelists, we are in for a real treat, in terms of this conversation. Connie, let’s start with you. You mentioned that AEO has more than 2,700 member organizations, and those organizations are helping underserved entrepreneurs gain capital and tools that they need to build their businesses. How do you help those member organizations?

Connie: Great question. So I also want to make sure I mention, in addition to what I said about the research, and the policy, and innovation, we also distribute grant dollars to businesses. We have helped to distribute more than $300 million in grants during the pandemic, so since the pandemic. And we have other programs that are coming out to give grants, you can always go to our website and follow us for that. But what we are doing on a daily basis, Miriam, is that we are providing our member organizations new tools, new insights, and trying to change federal policy, in ways that can help the businesses who they serve. Entrepreneurs, like those in the audience here, can go to our members to actually find capital. We have one of the largest networks of what we call Community Development Financial Institutions, CDFIs, who actually give capital, up to $250,000, and oftentimes capital in amounts smaller than that… I’m sorry, larger than that, up to a million.

Connie: But generally, we’re talking about CDFIs, or these nonprofit lenders, who can actually get capital to business owners. Again, generally with employees, maybe up to 20, and financial needs, up to $250,000 in capital. We work with our member organizations to test new products or new services. Let me give you an example. We, right now, are testing three different potential new underwriting tools. So even though CDFIs are more likely to fund community businesses, what we call main street types of businesses, they still get turned down sometimes, right? Because they are having to use kind of a traditional underwriting with a lens to, how can this business really help the community, help grow their own business and hire locally. But their underwriting still needs constant revisioning and needs to be reimagined.

Miriam: Sure.

Connie: So AEO is testing a couple different… Well, three different tools. Two for black women, that we think could give them an edge up in getting more black women-owned businesses approved for capital. And we’re testing one now, that also is using a tool to make loans to entrepreneurs with prison records. So those who have come out of the prison, but they are starting their own businesses, they always have a hard time finding capital. So AEO does that kind of innovation work to solve a pain point, like access to capital, experienced by different segments of entrepreneurs. And then we test those with our members and then once they meet the proof points, then we spread them out for adoption among our members. So that’s an example of how we might do some things to support.

Connie: Another example is our work with the Small Business Administration, or SBA. SBA has a number of programs, like the Community Advantage Program, or the Micro Loan Program, where they put their money, SBA’s money, into the hands of our members, and our members disperse that money. Well, they follow the rules of SBA. We are working with the SBA to change some of those rules. So within, I think April 1st, you will hear a public announcement from SBA about new capital, and new rules for that capital, that you all will be able to attain. AEO is on the committee, working with them, and have gotten some of our recommendations approved. So those are two different examples of how we are working with our members to help them get the capital out to entrepreneurs.

Miriam: Love that Connie, super interesting to hear both about the innovation and then also the policy work that AEO is doing to try to open up that capital for access to more people, which I think is definitely a good thing. Turning to you, Sam. You’re typically investing in larger companies. When a business goes to pitch a venture capitalist or a smaller financier, is there a difference between how they might frame their pitch if they want $10,000 versus $10 million?

Samantha: So there’s kind of a line between when you want to go for a $10,000 financier route versus a venture capital investment, which is probably really like starting out, maybe seed, pre-seed, in the couple million dollars. And that’s really if you want to grow a small, medium business, you would probably get more like the SBA loans. Or if you have a business plan, and you have visions of growing a company to an exit, or whether that’s an IPO, or an acquisition, and you’re going to scale the business, and you expect your revenues to grow, not in the SMB stage, where you could grow up to hundreds of thousands, and loan millions per year, but you are envisioning your business to grow exponentially, first year would be $5 million, $10 million, $30 million, et cetera.

Samantha: And the reason why I would position it as this is just that, if you talk to a VC investor, what they care about is that exponential growth, the scaling narrative, as they would say. And so the reason why is because when they invest in you, what they’re seeking is to get an exit, again, with the acquisition or IPO, so that they can make money on their investment. If you’re going a more SMB route and getting a smaller loan, the lender has different criteria for what he or she wants to see. And so what they’re concerned about is not getting a return on investment that is like 10x, potentially, what they invested in you, but really just getting their principle back, plus a little bit of their interest.

Samantha: And so if you’re thinking about building up a business, you want to ask yourself, are you going to scale it to the bigger company that’s going to get tens of millions of dollars exponentially growing year over year, or do you want to do a more lifestyle business that you could have a constant stream of revenue, you could continue to grow, but not at the scales of what you would see an enterprise-size business. You can also think of this in terms of just, ask yourself what kind of business you’re actually building? So you’ll probably see small, medium businesses, they’re probably more aligned with, do you want to start a restaurant, or do you want to open a store to sell stuff? Oftentimes, brick-and-mortar will be more SMB, and then if you do a tech business, that’s often more enterprisey. Of course there’s some blurry lines there, but these are just kind of the general motions for how one should think about, when should I get SMB loan versus when should I go and chase the VC investments?

Miriam: Super helpful framing. Thank you so much, Sam. Kathryn, Norwest Venture Partners has invested in numerous companies in their seed round. What signals do you look for in a great growing company?

Kathryn: Yeah, I’ll definitely address that. And just, I think Sam really hit the nail on the head, in terms of when venture versus other types of financing makes sense. And I’ll just add on to that by saying that it can be easy to look at venture financing, as it’s more money and perhaps a better route, if you can get it. In most businesses, venture is not the ideal financing path. And part of that is because venture was initially designed to finance a period of extended research and development, before a product came out, and then could kind of explode onto the market, because they had spent all that upfront capital. Now, venture is so much more around sort of speed to the market adoption. So then, help you acquire more customers more quickly.

Kathryn: But that should be a very intentional strategy around spending more money than you’re bringing in. So losing money as a business for a period of time. And for most businesses, that can be a really risky strategy. And so I just want to advise against taking venture money just because it is in the news a lot or anything like that. There are a lot of opportunities for other types of financing that are better for the founder in certain circumstances.

Kathryn: But to answer your question, Miriam, on the seed funding, really what we’re looking for is a founder with a clear and strong vision that’s compelling, big market opportunities, something that they believe in the world should be different, or is changing. Usually that coincides with some sort of technology breakthrough or secular change. Consumer preferences have shifted and the world hasn’t caught up. And here I come in, as a founder, with an opportunity that has never existed before. But really nailing that “Why now?” question is super important to us.

Kathryn: Then we also really value founders that can be clear about the risk or challenges associated with building a business in this space, and then have a specific plan forward to mitigate those risks over time. Because each venture financing round should feel like the business is meaningfully risk mitigated from the prior round and obviously seeds very early, so there’s not necessarily a lot of data around customer adoption or things of that nature. And so it really boils down, in large part, to the founder and how they communicate the story that they tell. And then to the extent, there are any metrics, really knowing your numbers cold.

Miriam: Super helpful. Also really appreciate, Kathryn, the kind of framing of how venture capital was originally conceived, and the way it looks now. I certainly appreciate that and I think folks in our audience probably do too. Would love to turn and talk about some common challenges. So we know that women business owners face greater obstacles in obtaining financing than similarly situated men. I pose this question to anyone who wants to talk about it. What are the common barriers that women see when they’re trying to access capital, and what can the women in our audience do to avoid these barriers or to surmount them?

Samantha: Go ahead, Connie.

Connie: I’m happy to start.

Samantha: Continue. I will follow up.

Connie: Okay, great. What we see, there are common problems and challenges for all women, all business owners. But I want to speak to what I think are the real unique challenges and barriers for women of color, particularly black and brown women. What we have found is that they are disproportionately shut out of capital. And that happens for a number of reasons. One, is oftentimes just legacy of discrimination. There is so much bias and discrimination, within the financial institutions in particular, that banks are the least favorable to business owners trying to get capital, particularly, again, women business owners of color. We have found that, not only are they disproportionately declined, compared to their white business counterparts, but when they are able to receive capital, they receive far less than what they request. And so just those barriers of even getting in the door, being considered, is a big barrier that is unique to black and brown business owners.

Connie: Part of that is because of the lack of starting wealth that they have. They don’t have collateral, they don’t have assets, they don’t have big piggy banks that are coming in the door. And so their wealth is less. That means they have fewer assets to pledge for collateral or their capital needs are generally less than their white counterparts or men. And so you have a whole list of things that put them behind the barriers in accessing capital. One of the other pieces that we’ve found is that, oftentimes, what banks, or even CDFIs and alternative lenders, are looking for, even from the small business entrepreneur, there are still things that Kathryn mentioned: being able to know your numbers, speaking and telling a story with confidence. And so some of those things are just lacking on the business side.

Connie: Our research shows that cash flow and cash flow management is one of the top reasons why there are so many exits in the black and brown business community. And so if you don’t know how to really manage your cash flow, and you don’t have access to cash liquidity, when those problems do surface, black and brown business owners are less likely to have a buffer that gets them through it. And so again, they end up having to exit from their business and actually close. Those are some of the common, but yet unique, pieces of accessing capital for black and brown business owners, that not only our research has borne out, but just in talking with our entrepreneurs who we work with.

Connie: I mentioned, Miriam, that AEO has been working to get grants to black business owners across the country. And in that process, we’ve had a chance to look at bank statements, for the past three to four months, tax returns. And it is a miracle how black businesses make it through. The margins of the cash that they have available just runs out pretty much every month. And so the businesses are really fighting an uphill battle to be able to access any capital. When we were talking earlier about… I really love how Kathryn really explained what they are looking for, and what you should consider, if you’re going after venture capital. Those are similar considerations, but they’re just below level, there’s several steps down, in terms of considering. But you still have to have the same acumen. You still have to have the same level of confidence, even if you are running a business that you’re trying to get up to $100,000 or $200,000 in revenue a year, not $5 million or $10 million. Those things are still needed, they’re just needed at a different level. But that kind of skill in your marketing, in your record keeping, and understanding how to manage your customers, all of those same components are necessary for the business owner, along with the confidence. But black and brown business owners will just hit up against many more challenges.

Miriam: Yeah. Thank you so much for that, Connie. I really appreciate the perspective there. Over to you, Sam.

Samantha: Yeah. I just wanted to touch on a few practical things that I’ve discovered worked for me, because as you know, VC, it’s a very male-dominated industry. I’ve experienced sexual harassment, sexual discrimination, and about six years into it, I kind of figured out how to cope with these things. On one hand, as women, it’s just a natural fact, we’re going to face discrimination, but the flip side of that, is that we internalize that discrimination. And so, we might come to meetings a little bit more timid, or we don’t have the right, I guess, bravado that a lot of men do. And so my advice is that, when you come to a meeting, take up as much space as you can, in terms of body posture, because that is a sign of more dominance.

Samantha: Also don’t doubt yourself. I used to doubt myself a lot. And then, I’ve established a track record of VC investments that I’ve done well. And yet, throughout my career, I’ve always felt like I wasn’t good enough, I didn’t deserve to be here. And then I would have my male counterparts, in different VC funds, saying how amazing they were and telling me how I should think through investments, when actually my track record was better. So my takeaway is don’t doubt yourself. And in meetings, what that can translate to is, don’t say, “I think”, get away from “I think. I believe.” Say things as if those are the facts, because that’s kind of the language that men use. And one other practical point, that has really helped me as well throughout my career, what is important for us, as women, to do is just network, right?

Samantha: We all know about the boys club, where men smoke cigars at a hot tub, and I’ve been invited to some of those, and I just don’t want to go to those. I have a no a-hole rule. So I don’t work with a-holes and I refuse to be an a-hole as well. And you realize that there’s a lot of power in numbers. And I used to be a community organizer, believe it or not, just for a little summer internship. But there’s a lot of women, there’s a lot of allies that you can network with. And the power in numbers rule shows that if you continue to network, build those relationships, you’re going to get value out of that. You don’t have to work with the big boys club, you can develop your own club, because there is power in numbers. So those are kind of my takeaways for how to navigate a system that is unfortunately unfair, but there are some practical ways that we can navigate them, to make life and work a little bit better.

Miriam: I love that advice, Sam. So good. Kathryn, you jump in here.

Kathryn: Yeah. I couldn’t agree more. I’ll just briefly add one thing, because honestly the “I think” comment was one that I was going to say as well, because I hear it all the time with female founders and don’t want to hear it as much because it undermines their great contributions. We sort of joke, internally, that our best founders have an uncanny ability to sort of bend the world to their will. And some of that is because we’re investing in new technologies and new markets and things like that. So there is a lot of uncertainty about the future of the world, but that’s true for everybody these days. And so I would love to see that energy more from female founders. And that doesn’t have to manifest in an aggressive, overbearing way, it can be a calm confidence that is backed up with all of the knowledge that all of you as founders have already. But it just allows that knowledge to lead the conversation and not have sort of nervous energy or inflated posturing dominate the space, because really what should dominate is your vision for your business and the traction that you have so far.

Miriam: Absolutely. Great advice as well. We’ve got a question from the audience. We don’t have any debt in our business, but are considering a loan to buy a building and expand. What are the pros and cons of servicing debt like that?

Samantha: That sounds like a Connie question.

Connie: Sure. I can take a stab at that. So I actually believe that there is always a pro to servicing debt. It’s just making sure you get the right type of debt, with the right type of terms. And so it could be a very healthy goal for you to think about going into debt to purchase a building so that you’re making use of other people’s money in a very good way, that you know can bring returns to your business. So I just think you need to be careful and to look, again, SBA has programs that are specifically geared for being able to make that kind of purchase of real estate. Our CDFIs do that work as well, in terms of being able to help you explore the pros and cons of different products and different stages of capital to bring into the company. So I think it can be a very good thing, as long as you are careful and are informed about the different rates and terms of the capital that you seek.

Kathryn: And the type of building you’re thinking about, the use for that building, how your business might evolve over time, and how likely it is that that building still fits that size of company and operational structure. My best advice is just to talk to someone who’s done it before, within your category to the extent possible, because there’s so much specific advice wrapped up into that question, that I wouldn’t want to mislead you with anything more detailed.

Miriam: And amazingly, our conversation is already pretty much at its end. So I want to wrap up by asking you all to answer this question. And Sam, we’ll start with you. What resources do you recommend for business owners looking to expand their networks and raise capital? Feel free to take that in any direction. And that’ll be the question that each of you will hopefully end on. Thanks.

Samantha: Yeah, well, I think it just comes with, well, let’s do friends and family, of course. And if your network doesn’t extend to that, I would say, look at your local nonprofit organizations that are supportive of your small/medium business. I think Connie’s organization is one great example of that. But just type in SBA loans, the small/medium business SBA stuff, they often hold events that kind of get you started on how to do things. And go to your alumni events. My philosophy is, always cast the net far and wide, and you’ll end up with some gems at the end.

Miriam: Nice. Kathryn?

Kathryn: Yeah, I’ll add on to that. I mean, I think our loose connections in life are some of the ones that provide the most unexpected value. So obviously rely on your close support networks, but put yourself out there, try to meet as many relevant people as possible. And also don’t be afraid to be the change that you want to see. If you want to see a group of folks focused on your business category, try to call some of those other businesses and try to self organize a little bit, because then you’re leveraging all of their resources in addition to your own.

Miriam: Love it. And final word from you, Connie.

Connie: Yeah. Great question again. And I hope, I think, we’ll put some resources from AEO in your chat, that people can have access to. So I won’t go over all of those, but they are giving you access to find the locator for Community Development Financial Institutions. So again, alternatives to banks. You can come to one of the AEO sites that will… And actually put apply. And then it’ll take you to a form, where you can put in what kind of capital you’re looking for, and we can try to match you to a lender in our network. Another resource that’s one of our partners is Facebook. I am constantly amazed at all of the resources that Facebook has to offer. They now have a new hub specifically focused on capital access. And so there are lots of resources that are being built, some are already there, but others are there.

Connie: And then also, there are lots of communities that are focused on women entrepreneurs seeking capital or women entrepreneurs in certain businesses. And again, a lot of those communities, AEO moderates one on Facebook. So again, not to necessarily promote Facebook per se, but there are lots of communities and resources that have been built up for your accessing capital and just learning more and building up your own knowledge base around that. And again, being with like-minded entrepreneurs, who can exchange and help cross-mentor one another. So I think all of those are some of the resources I could suggest.

Miriam: Yeah. Awesome. And thank you all for that. There are some more of those resources in the chat now. Connie, Sam, Kathryn, thank you so much for spending time with us today. Really appreciate your words of wisdom, your advice, and look forward to watching your careers and seeing where things go next.

Kathryn: Thanks, Miriam.

Samantha: Thank you.

Connie: Thank you.

Emily: What breadth and depth of knowledge and expertise on that panel. That was so fantastic. I love listening to all the different advice and I think it’s important for all of us to identify, you’re at different places in your process, right? So what works for another small business, might not be what works for you.

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