Women own 48% of all businesses, but only receive 4% of all private equity to start and grow those businesses. As a result, only 3% of women-owned businesses have annual revenues of a million dollars or more. I’m here to change that. Kim Lavine
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In 2002, after my husband lost his job, I took my kitchen table idea, the Wuvit® – a designer spa therapy pillow you heat in the microwave – to $225,000 in sales in just 8 weeks. In 2004 we rolled out to 250 Saks Inc stores in just 4 months, quickly followed by Macy’s, Gottschalks, Von Maur, Bed Bath & Beyond, Whole Foods, and Tabi, a 90-store chain in Canada. In 2005, at Saks request, we launched a signature line of designer pajamas under the Green Daisy brand to record sell-throughs.
There were at least a hundred spectators in the crowded room, all focused on a panel before them made up of three investors, one of them the most buttoned-down, formidable-looking Master of the Universe I had ever seen in my life whom I called Smart Money. The presentations were over and I dashed up to the front and made my pitch to Smart Money. It wouldn’t be long before we were talking regularly.
I understood this was a big chess game with all kinds of players who needed to sense risk and imminent fear of losing in order to keep forward progress. Emotions were just the playing pieces, not the players. Suddenly I was pulling strings, applying pressure and threatening to walk, not meaning one word of it. I could have never done it without the help of Smart Money. The question was: would other women be able to do this? And who would teach them how?
I saw a segment on Oprah where she was interviewing moms who created million dollar businesses in their free time while homeschooling their children and thought it was a myth that would demoralize millions of women. I wrote a segment pitch for her producers called the “Myth of the Mommy Millionaire.” My assistant thought it would be a great book. I emailed it to 6 agents that day and had 2 contracts on my desk by the end of the week.
"Everything begins with a search for something better, a dream, an idea, the courage to face a challenge and the passion to get it done. You can do it.Believe in yourself.. Change the rules. Join the revolution." from MOMMY MILLIONAIRE
My first book tour appearance would be on the #1 morning news program, THE TODAY SHOW. I had a 5 minute segment with 4 remotes answering questions from 4 viewers around the country. I had to prepare 3 bullet point answers in advance for each question which would be displayed on TV’s, but not on my monitor, and I had to hit each one in order.
My book tour was supposed to be three weeks, but it turned into three months. I was crisscrossing the country hitting every TV and radio station on the way promoting book store and speaking events. I was staying at the Conrad Hotel in downtown Indianapolis when I woke up one morning and had to call the front desk to remind me what city I was in.
I thought I knew just how fabulous the most fabulous person in New York was, until she took me to Michael's, where we sat at her “own table.
Michael himself ushered me to where she was seated, exclaiming, “Diane is your Editor? You’re so lucky, she’s the best Editor in the world.”
My business was built on a vertical business model of design, manufacturing, sales and distribution into premiere retailers like Saks Inc, Bed Bath & Beyond, Gottschalks, Whole Foods and others, all of which I had brought on before bringing on investors. My CEO wanted to convert to a licensing model, and if anybody could do it, he could. It all looked good on paper, but I was the only one in the board room who worried if the vertical money would run out before the licensing revenues kicked in.
I was home with my kids when I caught an interview with John Micklethwait, Editor-In-Chief of THE ECONOMIST on C-SPAN. I was immediately captivated by his urbane yet modest demeanor and witty command of recondite economic theories.
“Closing the Gender Gap is estimated to boost US GDP by 9% Eurozone GDP by 13%, Japan GDP by 16%.*Companies with a higher percentage of women in top management experienced 35% higher Return on Equity and 34% higher Total Return to shareholders. Emerging Global Talent Crisis resulting in ‘Brain waste’ due to widespread gender gap caused by traditions, conservative attitudes and social norms. Global economy will face demographic shock of a scale not yet observed.” Nadereh Chamlou in a report to the World Bank
A few weeks later I was back in New York staying at the Melia hotel on West 35th near Fox Studios where I was appearing on the nationally-syndicated Morning Show Mike & Juliet. My limo driver picked me up from La Guardia and spent the whole drive into the city telling me how worried he was about the economy. I told him everything was going to be alright, that a few sub-prime mortgage brokers were going to go under, but they probably deserved to.
In October of 2008, the Governor’s office called with an invitation for dinner at the official residence in Lansing. I pulled up to the iron gates in the dark of an unassuming, ultra-modern dwelling and was asked to state my name by security into an intercom. A guard met me at my car and led me to the mammoth red front door, opened by the First Gentleman.
I was shocked to promptly find myself seated next to the Governor with only 8 people in attendance: her Chief of Staff, Press Secretary, the VP of the MEDC, and the Directors of the MWF and the MWC. The Governor had to excuse herself throughout dinner to take calls from leaders at Chrysler as she negotiated a multi-billion dollar bail-out in Washington as I watched.
They called me back that week and I would return to the Governor’s residence and capitol offices many times in the next year. Over 10 million jobs had been lost overnight—with Michigan the hardest hit. Everyone in the state was trying to figure out how to create jobs. The answer was obvious to me: women were starting businesses at twice the rate of men, When 70% of all new jobs come from small businesses, connecting women with capital to start and grow businesses was job #1.
It was early spring when I drove to Kalamazoo to meet with my first investor contact. Intoxicated by the beauty of orchards in bloom I missed my exit and arrived late. He was gracious as I told him women owned 48% of all businesses and were starting businesses at twice the rate of men, yet only received 4% of all private equity to start and grow those businesses. As a result, only 3% of women-owned businesses had annual revenues of a million dollars.
It was my strategy to look him in the eye from across his desk and ask him why he wasn’t investing in women-owned businesses. I wasn’t prepared for his answer.
I was back in the Governor’s office for a final meeting. Our part of the deal was done; we needed $1.8 million to manage the infrastructure necessary to connect the $100 million with women entrepreneurs. The Governor’s staff rushed from the capital building across the street to our meeting. The grounds were covered with news trucks running live satellite feeds from every station in the state.
There was bare-knuckled debate going on on the floor as the national economic crisis was creating catastrophic budget shortfalls for states dealing with historic levels of unemployment, foreclosures, corporate bankruptcies and bail-outs. The writing was on the wall: Governor Granholm was a lame duck, budgets were being slashed, and Lansing was embroiled in all-out partisan infighting. This deal was dead but I wasn’t about to let my dream die
But things were going to get much worse before they got better. When the bottom fell out of Wall Street, it fell out of my business, and millions of other businesses across America.
- Every one of my national retail accounts went bankrupt and closed
- The retail industry went into crisis and shut down, freezing new buying indefinitely.
- The credit markets disappeared overnight, making it impossible to carry 180 day manufacturing runs out of China like I had been.
- My father died.
I decided it was time to start that media company everyone wanted, but this time without investors or loans. It. Was. Not. Easy.
I was back in New York on business. The licensing model my CEO had envisioned had become a reality. We had just launched a new home decor line in New York’s premiere showplace on Fifth Avenue. My Creative Director and I were invited to celebrate with my Editor and her (rabbi, Vietnam veteran, Wall Street attorney) husband at the Yale Club
At times of historic change comes historic opportunity, and I was all about opportunity. What I feared from the beginning had become reality: the vertical revenues dried up before the licensing revenues replaced them. Everyone was reinventing themselves so I did, too. I went to the mat with my investors and fiercely negotiated the buy-back of my company Green Daisy, assuming all the debt in return.
I checked into the Andaz Hotel on Sunset and looked out from the rooftop pool over the Hollywood hills; they had lost my reservation, it was late so they ‘comped’ me an upgrade to a suite where Robert Plant reportedly stayed during the heyday of Led Zeppelin, with pictures of them riding in on motorcycles adorning the walls. Looking down Sunset Boulevard at night from the rooftop pool, with Tom Petty singing “the future was wide open” in the background, I was totally swept away by Hollywood glamour.
We worked for months producing a sizzle reel for the show, writing, casting, filming, and then to my surprise, summarizing it all in a PowerPoint presentation. Forget about all the glamour, this was big business, and in Hollywood there were no barriers to entry—as long as you had a dream.
This time I stayed at the Hollywood Roosevelt, eating my breakfast of granola and fresh fruit next to the David Hockney pool, as I went over our busy pitch schedule for the day.
Before he arrived I got the PAGE 6 gossip from my Editor about the feud between her and Liz Smith.
“Didn’t she know that anything said at FREDERIC FEKKAI in the early hours reserved for private clients was off the record?”
I returned to my hotel just as Rosemarie Terenzio called. My heart skipped a beat when she said she was JFK Jr’s personal assistant until CAMELOT was INTERRUPTED. I couldn’t believe she wanted to work with me on THE NEXT BIG DREAM. But we had crossed wires; she was planning on meeting the next day and I was planning on leaving. It was one of those moments my Editor would call “beyond coincidence.” Instead she would go on to write a blockbuster bestseller about the young man whom I could tell in her voice she still dearly loved and mourned.
Our meeting was shattered by a bomb drill in a building just blocks from Times Square where a real bomb had been left weeks before.
I felt like I hit another dead end and I needed a call from my kids to tell me to “Suck it up!” Instead we decided to stop at the Plaza Hotel to see if we could grab a cup of tea. The dining room was packed so we went back outside to survey our options from the incomparable vantage point of the hotel’s front steps.
A lack of patience is probably one of my biggest character flaws. My passion can also sometimes make me come on too strong. At this point, I had an overabundance of both.
WHAT DO INVESTORS REALLY WANT? Find out in this interview with Terry Cross at my Private Equity Summit kick-off at my H.O.M.E. Office.
- Break down conventional wisdom that investors are only interested in high-tech ventures.
- Take networking opportunities out of Silicon Valley, boardrooms and "old boys clubs.”
- Teach women how to package and drive a deal.
- Elevate women’s business funding from a charitable subsistence model to one of exponential financial return.
- Vet and qualify women to be money-ready investments, then empower them to be leaders in the boardroom.
- But the most difficult and most important paradigm shift is teaching women to think they can.
I was coming off a high generated by the spectacular media success of my modest Summit just weeks before. I arrived slightly late and had to wait to be seated during an intermission between speakers.
I bumped into one of the organizers of this TED event and asked him what he thought would happen if you plugged TED into a $100 million of investor capital. He eagerly answered that he wanted to know more. I had the same response from event speaker Lisa Gansky, who as a rare woman in the tech field had raised millions years ago before selling her company to Kodak. The smartest and most successful investors are the ones who can discern a needle of opportunity in a haystack of mundane moments that make up any normal business day—then act on it with haste. I was beginning to realize that some people just could not see the opportunity, unless they were a “crazy person, or a person with vision.”
We stayed at the Waldorf Astoria and the OCCUPY movement was in full swing. There were protesters in the street with bullhorns and banners and a news team was filming them as we entered the building. Security was tight and we were escorted up to offices high above the street where we looked down on the protestors. They were so loud, their voices carried over our meeting and our hosts apologized for the intrusion.
What they said next stunned me: a percentage of billions in public funds they managed was earmarked for investment in women and minority-owned businesses, and there was more money than there were businesses. But there was more to follow.
Even in the midst of these historic times, America is an embarrassment of riches, a melting pot of freedom and democracy and money that makes this the greatest country on the face of the earth to start a business. This new reality wasn’t easy, but it was the cure, and entrepreneurs—not protesters—were the heroes, taking on personal risk today to create the wealth and employment opportunities for millions tomorrow. A new class of Super Angels were being born, using feet on the street to snap up deals, and one of the smartest guys in the room confided in me off the record that he thought Wall Street would become irrelevant in our lifetimes.
Crowd-funding was the newest phenomenon, but crowd-funding didn't build railroads. It was a temporary solution to a Big Problem: Raising capital was the most important job any entrepreneur had and nobody was teaching anyone how to do it—until now.
The forecasted growth of women-owned companies from 48% to 55% over the next 4 years is a powerful phenomenon that will rewrite the American cultural landscape, changing work and family life in revolutionary ways.
It was the holidays, a time for family and friends and love and laughter. I started putting all the pieces together and reflecting on the journey. We had climbed a mountain, but everywhere I looked were new peaks to scale. I’ve never made anything happen by following rules, and not following rules has proven to be an effective strategy. I've never worked harder, traveled further, dug deeper, dreamt bigger, risked more for so many--on a dream.
It would have been so much easier to just give up, or give in. Who did I think I was to show up at these places and ask these people to join me in my dream and dare them to tell me 'no?’ Maybe I wasn’t the best person for the job, but I was the only person willing to do it.
Money is just the machinery that makes ideas work. The person and their dream is the commodity worth millions. This is the story of that dream and history being made.
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