Vicki Saunders.
SheEOIn 2015, serial entrepreneur Vicki Saunders, 53, launched SheEO, a Toronto-based non-profit aimed at funding women entrepreneurs. Her plan: Recruit groups of 500 women who each donate $1,100 to a fund that makes zero-interest loans of $100,000 to 5 companies founded and run by women ($100 of each donation pays for running the program). In this interview, which has been edited and condensed, Saunders explains why she believes it’s tough for female founders to get funding, how her model is the best way to support women entrepreneurs, and why the world will be a better place if more women run businesses.
Susan Adams: Tell me about your background
Vicki Saunders: I’ve been an entrepreneur in Europe, Canada and Silicon Valley and I’ve always been looking for blended models. How do you do good and make money at the same time? We now call people who do that social entrepreneurs.
Adams: What led you to start SheEO?
Saunders: I had a company called the NRG Group that went public on the Toronto stock exchange, in 2000. It was a business incubator and when we launched, of the first 400 funding applications, only three came from women. I’ve been thinking about this for 20 years. How do you get more female entrepreneurs to apply? The numbers are terrible. Less than 4% of venture capital goes to women. Less than 1% of corporate procurement goes to women-owned companies. It’s a massive problem. It hasn’t changed and I think it’s getting worse.
Adams: Why start your organization now?
Saunders: We are at a huge moment of disruption in the world. Almost everything is getting redesigned. Bookstores no longer exist and we have Amazon. Infrastructure is going to look different with Uber. I want to live in a world that is designed equally by men and women. If women can’t get their innovations funded, then we’re going to live in a world that’s only designed by men.
Adams: Why haven’t things changed?
Saunders: Because 90% of the people writing checks are men.
Adams: Why aren’t there more women writing checks?
Saunders: Because the structures we have in place don’t appeal to women. The VC model is, make 10 bets and one will come to fruition. It’s extremely high risk and that’s not how women invest.
Adams: Then shouldn’t we be trying to get women to accept more risk?
Saunders: I actually think the risk is insane and off the charts. We live in a giant casino. It’s created a world where five men together have the same wealth as 3.5 billion people. Inequality is increasing. That’s not just because of venture capital. But our system is set up for winner-takes-all. A question for me is how do we create a new economic model.
Adams: Why did you set up a model based on loans and debt, rather than an investment model where SheEO would hold stakes in promising companies and then re-invest profits?
Saunders: We use debt because most women who run businesses get to profitability pretty quickly. They have revenue-generating companies.
Adams: How did all those ideas lead you to set up SheEO?
Saunders: The onset of crowdfunding blew open my mind about this possibility. Small amounts of money were being aggregated together, which at scale could create change. How do you get women to write checks and get female entrepreneurs to come forward with their big ideas? Then how do you broker those two things together? How do you create an environment where we find each other? There are these under-leveraged assets that we haven’t designed for.
Adams: What do you mean by under-leveraged assets?
Saunders: For example, 80% of purchase decisions are made by women. If women aligned their buying toward companies that create a better world, we’d literally change the economy overnight. Secondly, women have 75% of inherited wealth since we’re living longer. That’s a ton of money. The big idea is if we can get a community together in support of women innovators, we can really make a difference. The question is how do you take that to market.
Adams: Have you found a market-driven way to support women innovators?
Saunders: My idea is that you take a community of at least 500 women who contribute $1,100 each. One hundred dollars is a program fee. One thousand dollars goes into a shared fund. We’d loan that out at 0% interest to 5 women innovators to support revenue-generating companies. You need to have at least $50,000 in revenue to apply and your business has to be 51% women-owned and women-led, with a woman CEO. Then you have to be able to answer a question about how you’re creating a better world with your business. Along with the zero-interest loan, those 500 women are your team. They can refer early customers and give you advice. We have an online community where they can ask for support and help from each other.
Adams: How big are the companies that are applying for the loans?
Saunders: The range is between $50,000 and $1.5 million. The average revenue growth for our companies is 300% across our portfolio and we have 100% payments on the loans. They make payments every quarter, over 20 quarters. We call the entire thing an act of radical generosity.
Adams: You call the women who fund these loans as “activators” instead of “investors” or “lenders.” Do they ever get their money back?
Saunders: No. They’re contributing toward a perpetual fund. The money gets paid back into the fund and loaned out again. We’re not trying to create a big pot of money like an endowment. We want the money to be out in the world.
Adams: Tell me about a business you’ve already funded.
Saunders: The Alinker. It rethinks the walker and the wheelchair. Fifty percent of people in wheelchairs can still walk. But there’s no device for them. The first thing that happens if you lose some mobility is we put you down a level in a wheelchair. People look down at you. There’s an immediate loss of dignity. But 80% of people in wheelchairs can still walk. The founder, Barbara Alinker, created what looks like a big adult tricycle. It’s bright yellow, you sit at eye height and you walk with your feet. She started the company three years ago.
Adams: How much do the chairs sell for and how many has she sold?
Saunders: They sell for $2,000 and she’s sold about 1,000 chairs. We loaned her $100,000 and she’s raising $2 million now.
Adams: How many investments have you made?
Saunders: We’ll have 32 companies by January, in Canada, the U.S., and five in New Zealand. The goal is to get to 1 million women and $1 billion in funding as soon as possible. At our current growth rate that looks like it will be in 2026.
Adams: How optimistic are you that you’ll reach your goal?
Saunders: I really hope I work myself out of this business in 20 years. But that’s in a perfect world. I think it’s going to take a generation to change the way women’s businesses are funded.
Adams: What do you think about this moment we’re in, where there’s such heightened attention to the sexual abuses of women? Does that affect what you’re trying to do?
Saunders: I think we’re all unconsciously biased toward what a leader looks like. What’s different now is that the norm is speaking out instead of keeping quiet.
