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Women & Power 2022

‘Write the damn check’: How female funders can help women entrepreneurs grow

Barbara Clarke began investing in women-owned companies in 2013.Craig F. Walker/Globe Staff

Ladies, you can lament how the male-dominated venture capital world fails women entrepreneurs by only giving them a tiny slice of its money — or do something about it.

Barbara Clarke chose the latter. She had grown tired of hearing how women-owned businesses weren’t getting the funding they needed to flourish. After a lucrative career as a management consultant in Boston, she had the means. Yet, as Clarke put it, women haven’t been socialized to invest their own money into companies the way men have been. So she sat on the sidelines until one day she could no longer ignore the voice in her head: Write the damn check, Barbara.


That was 2013, and Clarke has been writing checks ever since. Her first three investments were small, ranging from $5,000 to $10,000. Some companies have been wildly successful; others have struggled or even folded. Today, Clarke estimates she has poured several million dollars into about 60 companies — from tech startups to a fair trade cocoa business — plus 15 funds that invest in women entrepreneurs.

While it was lonely in the beginning, Clarke is meeting more female investors like herself, partly because of the proliferation of funds that specialize in backing women-owned businesses. Investing used to be a much more exclusive and labor-intensive process; you had to have an introduction to a founder, sit in on a pitch session, and do your own homework. Nowadays, you can write one check and fund 10 women-led startups that have been vetted by experienced investors.

“There are so many on-ramps to investing,” Clarke says. “There’s no reason to wait.” But, she cautions, “You can get in the game, but never invest anything you can’t lose because this asset class is risky.”

Here’s the dirty little secret about funding: The vast majority of startups do not get venture capital. They self-fund, take out bank loans, and get money from friends and family, as well from a network of so-called angel investors such as Clarke.


Women who have come into money — whether through successful careers, smart investments, or family wealth — are realizing they can help close the gender funding gap.

And by the end of the decade, women are expected to become an economic force to be reckoned with, driven by demographic shifts when baby boomer men pass and leave assets to their wives. One study by McKinsey & Co. indicates that women are in line to control as much as $30 trillion — about the size of the annual gross domestic product of the United States.

But for now, even with more women wading into the world of startup capital, they remain a minority. Women make up only 15.4 percent of general partners at venture capital firms, according to an analysis by PitchBook and J.P. Morgan, and among angel investors, women represent about a third of the market, according to the Center for Venture Research at the University of New Hampshire.

Having women in control of checkbooks matters. Several studies indicate that women venture capitalists invest in twice as many female-founded startups at the early stages as compared with male counterparts.

None of this is charity. There’s also a growing body of research indicating that women-led startups are more likely to be successful. A 2018 Boston Consulting Group study, based on an analysis of five years of data from MassChallenge, found that women entrepreneurs deliver higher revenue — more than twice as much per dollar invested — compared with male-led startups.


“Women outperform. The data is clear and really important to understand,” says Jenny Abramson, founder and managing partner of Rethink Impact, a venture capital firm that specializes in funding startups led by women and nonbinary entrepreneurs.

Rethink Impact, founded in 2015, has raised two funds through high net-worth individuals, university endowments, foundations, and banks, among others. Women made up about 65 percent of the investors in its second fund of about $180 million. Rethink has backed 36 startups, including at least two Boston companies, CareAcademy and Eleanor Health.

Abramson acknowledges that it’s important for women to figure out what kind of investors they most want to be. Angel investors, who provide seed money for early stage businesses, are often looking to be hands on and actively engaged. Meanwhile, others may want to put their money in someone else’s hands.

“Is it that you want to invest in your daughter’s friend’s business, and really be able to touch and feel on a day-to-day basis what’s happening?” Abramson says. “Or is it that you want a professional investor vetting and selecting from a much larger universe of deals for you?”

Angel investor Dr. Uzo Ndukwe Erlingsson. Pat Greenhouse/Globe Staff

Dr. Uzo Ndukwe Erlingsson has taken both paths. In 2014, she was walking around the South End when she stopped by Follain, a shop that sells clean skin care products. She had become allergic to everything during her pregnancy, and she knew how hard it was to find beauty products made without harmful ingredients. Erlingsson tracked down the founder, Tara Foley, and offered to invest $200,000 to help grow her concept. “She thought I was crazy,” Erlingsson recalls.


Foley eventually took her money, and Erlingsson has since become a trusted adviser. The two women talk about once a month. Follain now sells its own branded line of clean skin care and has evolved into an e-commerce retailer known for selling healthy beauty products. “It’s a privilege to me to be an investor, not the other way around,” Erlingsson says. “The whole process has been my own personal MBA education.”

These days, Erlingsson doesn’t have as much time to study individual opportunities. She’s become an entrepreneur herself, launching health tech startup FHIOS Health with her husband, who is also a doctor. Instead she prefers to back women-owned businesses through funds such as Rethink Impact.

“I don’t own an Hermes bag,” Erlingsson says. “I’d rather invest in my community, and people who employ other people and who are providing a service.”

For women entrepreneurs, they feel seen by female funders. “They just got it more so than other people I was pitching,” says Foley, chief executive of Follain, who developed her business while pursuing her master’s in business administration at Babson College.

Among Foley’s first five investors, it was the two women — Erlingsson and EDENS chief executive Jodie McLean — who put in the most money initially and have become her longest serving advisers.


McLean, who runs one of the country’s biggest retail real estate companies, has counseled Foley on real estate. Meanwhile, Erlingsson, a doctor trained in biochemical genetics, helped Foley hone her restricted ingredient approach to skin care, which at the time was a novel concept, and made introductions in her health care network.

Follain reached a milestone in October when it was acquired by Credo Beauty, another clean skin care retailer, in a deal that will allow the Boston brand to gain a bigger national footprint.

“My female investors have always been there for me through the thick and the thin,” Foley says. “There is a lot to be said for that.”

Shirley Leung is a Business columnist. She can be reached at shirley.leung@globe.com.