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Q&A with the "Angels" of 8 Wings Enterprises

8 Wings Enterprises is a group of four female "angel investors" who serve as business advisers to women-led companies. They work with selected women entrepreneurs who are ready for equity funding but need patient guidance, contacts, and encouragement to succeed.

Their resumes clearly qualify them to consult on the subject. Connie Duckworth is a partner at Goldman Sachs. Sharon Whiteley is a successful entrepreneur who created the vending pushcarts seen at malls, among other ventures. Paula Chauncey is a former banker turned business consultant. And Kathy Elliot is a former research director for David L. Babson, an investment advisory firm, and now advises women entrepreneurs full-time. Together, they're co-authoring a book, 8 Wings: How Every Woman Can Find the Psychic and Financial Capital to Fund Her Entrepreneurial Dream, due out early next year.

BusinessWeek's Toddi Gutner recently sat down with them at a women's CEO summit for leaders of growth and emerging companies, where the focus was the leading trends involving venture capital. Following are edited excerpts of their conversation:

Q: When you're listening to a pitch by an entrepreneur for venture capital or angel funds, what do you want to see and hear? What would make you lose interest or faith in the entrepreneur?

Duckworth: Investors, like myself, want to [see] an entrepreneur's passion, enthusiasm, commitment, street smarts, and willingness to self-sacrifice for the business. These critically important messages are delivered verbally and nonverbally in face-to-face meetings.

Whitely: There are a couple of things an entrepreneur should never say to an investor. For example, I don't want to hear: "Even if we get just 1% of the market, we'll be an X-million-dollar company." Investors invest in market leaders, not also-rans. And who will have the other 99% of the market? Build your revenues from the bottom up by customer acquisition, customer care, product/service dominance, not by assuming you'll get a small and insignificant share of the total market.

Another statement I don't want to hear is: "Yeah, but..." Defensiveness toward an investor's question is a sure way to impress upon him/her that you're not a good listener. This is a key attribute investors look for, watch for, and value highly.

Q: Do you have any suggestions for an entrepreneur who's attempting to raise venture capital?

Chauncey: Sure. An entrepreneur needs to have a general understanding of the funding process and the terminology even before she begins. She also needs to know with whom she's meeting and whether or not they're the right people to help her fund her company.

The entrepreneur must also have a realistic business and revenue model and know whether or not her business is big enough and investable from a venture capitalist's point of view. She should know how much money is needed and what's the intended use of the funds. An entrepreneur must be flexible on ownership percentage and be rational about the valuation of the company. The right price is what the market will bear. Finally, it's important for an entrepreneur not to become too focused on raising money that she forgets about running her business.

Q: What are some guidelines and tips you might recommend to an entrepreneur during a presentation in front of investors?

Elliot: First of all, watch your audience during the presentation. Are they engaged? Do they look confused, disbelieving, or curious? What topics do they ask questions about or want more back-up data on?

Nonverbal signs are also revealing. It's challenging to both present and fully observe during a presentation, so assign another team member with the task of observer. After completing your presentation, not only ask if there are questions, probe for feedback as well. Have hard copies of your presentation as handouts to leave at the close of the session. Don't hand them out up front -- many will read it immediately, which will take their attention off you.

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