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More Women Become Net Entrepreneurs

When Martha Stewart took her company public in October 1999, she drew a lot of attention. Shares in Martha Stewart Living Omnimedia doubled, making her a billionaire on paper.

Many investors viewed her company as largely an Internet company. That's because Stewart, America's most famous homemaker, dispenses advice and sells products from her Web sites (as well as her TV show and magazine).

Stewart is one of many women entrepreneurs carving out a niche on the Internet. The potential financial rewards, as Stewart's example shows, are huge.

Women are a minority among Internet companies, as they are in other high-tech fields. However, more and more women are becoming involved in Net start-ups. These entrepreneurs are changing perceptions about women's involvement in high-tech.

"There are a lot of women becoming entrepreneurs. There's no doubt about it, especially on the Internet," says Margarita Quihuis of San Francisco.

She's the director of the Women's Technology Cluster. It helps women launch and fund Internet and IT businesses. "It seems to be a great time to be a woman entrepreneur on the Internet."

Women are not just attracted to the Internet for the potential of a big payday. For Marianne Turcke, it was "the opportunity to have a greater amount of responsibility at a faster rate."

Turcke is vice-president of operations at a branch of Internet Pictures Corp. She moved there from a big company where she had handled corporate mergers and acquisitions. Turcke has an edge -- she has both a technical and a management background, with two engineering degrees and an MBA.

Turcke has a wider range of responsibility at the Internet start-up. Like many start-ups, her company demands a lot of hard work. For someone who thrives on challenges and constant change, it's all worth it.

"It is a tough job," Turcke admits. "I work easily 12 to 14 hours a day.

"You're growing so fast that the jobs become really, really big in a very short amount of time. The rapid pace of growth is really, really exciting."

Many women entrepreneurs might feel held back by their current employer. Men still dominate the top ranks in traditional businesses. The New York research firm Catalyst found in a 1999 census that women held only 11.2 percent of board seats at the 500 largest publicly traded U.S. companies.

When the Internet was first taking off in the early 1990s, companies started by people with technical backgrounds were viewed as more viable by investors. Because most engineering and computer science graduates were men, they started most Internet companies.

They found it easier to get investors to provide venture capital because of their technical backgrounds.

There's a lot of venture capital being doled out to Internet companies. In fact, 1999 broke all records. The five largest investments involved information technology companies.

Research from VentureOne shows venture capitalists invested $6.8 billion in 661 transactions in the second quarter of 1999. That's more than twice the amount a year earlier. Internet-related companies received $3.81 billion of all funds!

Universities still find men are the majority of computer science and engineering students.

"That's one of our soft spots," says Catherine Purcell, MBA career manager with a university business school.

"We don't have a lot of women in our MBA program because we're an MBA for science and technology, and because that's an area that's male-dominated, we don't get a lot of women. We only get about 22 or 23 percent women in our program."

Without the technical backgrounds, many women have faced hurdles getting venture capital for Net start-ups.

In fact, according to Cheskin Research, women started twice as many businesses as men in 1997, yet received only two percent of venture capital money. VentureOne, another research firm, estimates women-owned companies get less than 10 percent of all venture funding.

"It has been, historically, more difficult for women to get access to venture capital," says Quihuis. "We think the tide is beginning to change in that area."

The tide is changing because perceptions are changing. Today, what's most important is having a good idea, along with management and marketing skills.

"There's a recognition that the Internet doesn't require the technology background," says Pat Hill Hubbard.

Hubbard is managing director of the Santa Clara University Center for Innovation and Entrepreneurship. "To be a successful entrepreneur in the Internet, business [skills are needed] in the traditional study fields such as management, sales, marketing -- those kinds of things."

Quihuis agrees. "You don't have to be a technologist to start a company. You can have a background in retail and marketing."

Women have traditionally been well represented in business and marketing programs. Now that those backgrounds are more valued by venture capital companies, it's easier for women to get funding.

Of course, people with high-tech backgrounds are still needed by Internet companies. However, "you can have a concept for a business and then just hire the right people," says Elainna Houghton. She's president of the Silicon Valley chapter of the National Association of Business Owners (NAWBO).

Houghton says the fact that the Internet is new helps women. Industries that have long been dominated by men can be tougher to break into, because having a network of personal contacts can be so important. Who you know in the business is not as important with the Internet.

"The Internet and the Web business is so new that there isn't that history to deal with, so it's open to everybody," Houghton says.

Calvin Fairbanks is the executive director of the Canadian Advanced Technology Alliance (CATA). He agrees. He says the atmosphere is more welcoming in the Internet sector.

"There isn't the Old Boys club of male dominance in the corporate environment of an Internet company," Fairbanks says. "[Women's involvement] is definitely growing, and I believe, in time, it's definitely going to be equal."

The CATA has just started a survey of women entrepreneurs. Fairbanks says the association is doing the survey because "we would like to increase the number of women in technology." The association will then devise programs to increase women's participation in technology.

"I think it's just a rocket ship and it's going to keep going for a long while here," Turcke says.


Who are the Champions of Women in Technology?
Article profiling leaders in technology

National Association of Women Business Owners
Silicon Valley chapter representing women's business interests

Women's Technology Cluster
Entrepreneurial resources, news, and events
Founded by women for women, with chat rooms and articles on women's issues

Center for Innovation and Entrepreneurship
Download the Women Entrepreneurs Study

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