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Women are gaining greater market share and momentum in startup space

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It was 2001, and the stock market had just crashed. But Saki Dodelson had an idea — one she knew she could turn into a $150 million company.

Her concept — to create educational technology that could help children improve their reading and writing skills — was unproven. Her timing was awful. And looking for money was not easy.

So she mortgaged her house to get her company to the point where it was generating a little revenue. It wasn't much, but it was enough to convince the NJTC Venture Fund, an arm of the New Jersey Technology Council, to invest three rounds of funding for a total of $12 million.

Now, her company, Achieve3000, has become a $150 million company, one that is growing 20 to 30 percent a year, she said.

"If you want to dream big, you need money to make your dreams a reality," Dodelson wrote in an email. "Once I had something to showcase, I was able to go to NJTC with a very detailed plan of how I was going to change the world while making money. Mission with a margin spoke to them, and they had the vision to invest in Achieve3000."

In the startup space in New Jersey and across the country, men still outnumber women, both on the entrepreneurial side and as investors.

Dodelson said that imbalance hasn't been lost on her over the past 13 years.

"There are definitely fewer women entrepreneurs, but that's not because of a lack of capability," she said. "If a woman has an idea and a detailed plan, she should be able to raise funding just as well as any man."

But it's not always that simple.

Multiple sources show that women have received just 7 percent of all the venture capital funding in the U.S., leaving 93 percent for men.

In addition, MIT published a study last month that found that attractive men are disproportionately successful in obtaining venture capital funding, much more so than women and less attractive men.

Even when looks were taken out of the equation, men had more success than women. In one controlled experiment, the researchers had a man and a woman each narrate a business plan video. Those participating in the study picked the video narrated by a man 68 percent of the time.

That imbalance does appear to be shifting.

Golden Seeds, a New York-based angel group that invests exclusively in early-stage companies that have at least one woman in a leadership position, was the most active angel group in the country in 2013, according to the latest Halo Report from the Angel Resource Institute, Silicon Valley Bank and CB Insights.

That means more women-led companies are getting a boost, but what about female investors?

Carol Curley, a managing director with Golden Seeds, said the angel environment has been male-dominated for so long because so much of the work is based around networking. And so many of those networks are made up mostly of men.

"A lot of the introduction to angel investing is through your peers and your network and your contacts," Curley said. "There aren't a lot of women angels, and they're not necessarily reaching out to other women."

Curley, who is also an investor with New Jersey's TechLaunch startup accelerator program, said women have made significant advances in the past five years. But honestly, she assumed it would have changed much faster.

Even today, she stills finds herself the only woman on many panel discussions.

"My metric is, is there a line to the ladies' room? And in most investment conferences, there is not," she said.

The statistics bear that out.

In 2012, women made up just 22 percent of the angel community in the U.S. That marked a significant increase over 2011, when the number hovered around 12 percent. Still, a 20-80 female-to-male split is far from even.

Some organizations are working to reverse that trend. The Pipeline Fellowship touts itself as an angel investing bootcamp for women. And at the beginning of May, the We Own It Summit, dedicated to supporting high-growth female entrepreneurs, will take place in Philadelphia and will feature an angel investor bootcamp of its own.

Elizabeth Crowell, an alum of the Pipeline Fellowship who is now an angel investor herself, said those efforts are working, getting more women involved on the investment side who can then support more women-led startups.

"Women are quickly increasing — and no, we're not half, but our numbers are increasing," she said. "We're really approaching a tipping point. The writing is on the wall, and it's so exciting. So it feels great to be part of this movement."

E-mail to: maryj@njbiz.com
On Twitter: @mjohns422

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