WMF boosts capital sources for some firms

January 24, 2011
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The Michigan Women’s Foundation is backing two new funds aimed at supporting women-owned businesses in the state.

BELLE Capital is a venture capital fund, independent of but supported by the foundation, for promising start-ups, while another fund is being set up for loans to help women take their enterprises to the next level.

“Women have started many of the businesses in Michigan, but have garnered only 4 percent of the capital,” MWF President and CEO Carolyn Cassin said. “We don’t go out and we don’t get the angel fund capital or the venture fund capital. So we decided to take that on.”

After a year of research, the foundation’s board of directors decided to back BELLE Capital, Cassin said. She and Lauren Flanagan, a businesswoman and tech industry entrepreneur who lives in Douglas, are BELLE’s co-managing directors.

“Many of the women who have been involved in the foundation have been involved in that,” Cassin said. “This is a money-making, for-profit fund. It’s a fund that will take equity in companies. It’s a real venture fund that women will expect a return on.”

Flanagan said the goals of BELLE Capital are four, and at the top is to make money for investors. Due diligence is in progress on the first two potential investment targets, she said.

“We expect to do our first close next month and to make our first investments shortly thereafter,” added Flanagan, who also is managing director of the Phenomenelle Angels Fund in Wisconsin. The two funds may make some joint investments, she said.

BELLE is an acronym for Bold Enterprises Leveraging Leadership and Experience. The fund’s focus will be information technology, Web 2.0 and mobile technology companies, clean technology, medical devices and advanced manufacturing women-owned businesses in Michigan, the Midwest “and other underserved geographies.”

The companies must have at least one woman C-level officer or significant owner and board members, or be willing to hire women for those jobs.

Other goals include serving the underserved market of women entrepreneurs with capital and human resources; increasing women’s familiarity with early-stage investing; and placing women in upper management and board positions at emerging companies.

BELLE Capital’s initial ask has raised about $5 million, Cassin said. Leaders are seeking another 25 women and institutional investors willing to pony up $100,000 over five years, with a total goal of $25 million. The investors intend to donate 1 percent of the profits from the fund to the MWF, Cassin said.

The MWF’s Women-to-Women Fund will use donations to the foundation for loans for small businesses, such as restaurants, bookstores and day care centers, Cassin said.

“Those are businesses that do change the fabric of this state. It’s just a different approach,” Cassin said. “We will invest anywhere from $1,000 to $25,000 in a women-owned business or a woman entrepreneur, and hopefully surround her with what I call wrap-around services.”

The foundation intends to create a statewide database of women willing to network and lend their contacts, expertise and knowledge to new women-owned businesses receiving those loans, Cassin said.

She said the MWF is hoping to generate matching grants from other Michigan foundations to build the Women-to-Women Fund quickly to its goal of $200,000 for 2011.

“The lack of support for women, statewide or nationally, is really well-known,” added Jackie Taylor of Grand Rapids, MWF vice-chair and a former vice president at Davenport University.

“What we need to do is to be able to turn that around to build economic development for the whole state. This is one way that we, as a foundation, can help with economic development and job development for the entire state of Michigan.”

The U.S. had 7.8 million women-owned businesses in 2007, or 28.7 percent of all businesses, according to a survey of businesses conducted by the U.S. Census Bureau every five years. The bureau released the latest survey results in December.

Some 88.3 percent of women-owned businesses in the U.S. have no employees, the bureau reported. Another 17 percent of the nation’s 27.1 million firms are equally owned by women and men.

The survey revealed that Michigan had 248,426 women-owned businesses in 2007, or 30.4 percent of the 817,461 businesses in the state, prior to the recession.

Some 46 percent of women-owned businesses were in repair and maintenance; personal and laundry services; health care and social assistance; and professional, scientific and technical services.

In the health care and social assistance sector, women owned 52 percent of the businesses.

“This is a new venture for women. Women have not typically invested in this way,” Cassin added. “We have not invested our money in funds that re-invest in women. It’s new for all of us. It just feels like we’re on the cusp of something very exciting and very big.”

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