The dynamic duo at the heart of Beam is leveling the playing field for female entrepreneurs.
By Kathryn Freeman
Upon meeting Jess Gaffney and Aisha Lewis, the dynamic duo leading Beam, both women appear joyful about their work and very serious about the task at hand. As the small team behind Beam, Gaffney and Lewis are working not just to level the playing field. They are out to change the whole ballgame for Texas-based female entrepreneurs.
Started as Women@Austin by Jan Ryan in late 2013, Beam is a 501(c)(3) nonprofit organization that exists to provide networking opportunities and connections that empower women entrepreneurs in Texas. Equipping them with knowledge, access to capital and the support they need to be successful. In 2018, the organization became a part of the Notley social impact system and in 2020 rebranded as Beam. Gaffney, CEO and executive director, says Beam “exists to shine a light on women entrepreneurs.”
Since coming on board, Gaffney has grown BEAM’s member collective to over 200. She came to BEAM after several years in corporate America. Followed by working as a female entrepreneur with a company focused on helping mothers find high-quality flexible work. Gaffney came to Austin from New York seven years ago. She was six months pregnant, looking for the same high-quality flexible work. Ultimately dismayed about the landscape for working mothers in 2017. “Beam seemed like such a wonderful opportunity to expand my impact when it came to supporting women,” she said.
A Support Beam
Dara Chike-Obi wanted to join the group for the same reasons as Gaffney wanted to lead it. She says the Beam member collective is a place where “female founders from different walks of life who are starting, launching and scaling companies have a judgment-free space to connect, sharing ideas and learning experiences.”
Chike-Obi, the CEO of Grio (formerly Nwa Bebé), a startup focused on revolutionizing infant feeding time, elaborates, “Beam is special. It has created a space for female innovation and connection.”
Beam is shining a light on female entrepreneurship in more ways than one. The Beam membership collective provides various means of support for its members. This is because their members are in different phases of their business development. A significant barrier to women founders’ success is not having mentorship opportunities or access to the networks that can help them tackle business challenges. Beam provides networking opportunities and takes an innovative approach to delivering mentorship possibilities. Gaffney calls it “timely mentorship,” where a woman founder who might be having a marketing challenge can reach out to an expert for specific help for a limited time. “Mentoring does not always have to involve a long-term relationship for [it to be impactful],” Gaffney says.
Beam has signed up an impressive list of community partners and leaders to support its mission. Including lead designer, executive chairwoman and former CEO Kendra Scott; co-founder of Black Women Talk Tech and Fundr, Lauren Washington; and Dan Graham, a general partner at Notley and founder of BuildASign. The diversity and breadth of experience among their partners demonstrate that Beam commits to supporting women founders through their whole journey.
A Network of Angels
In addition to providing robust mentorship and networking opportunities, Beam began its own angel investment fund to increase early-stage funding access. Lewis serves as the director of strategic partnerships at Notley, a platform that offers resources for nonprofit professionals and social impact leaders and funders and works on several social impact initiatives, including underrepresentation and entrepreneurship. She is no stranger to the startup space. She worked several years in California for accelerators and other programs to support underrepresented founders. Lewis joined the team at Beam to help launch its Angel Network last fall.
In explaining the new project’s genesis, Gaffney says that access to early-stage funding is critical and was the most consistently mentioned barrier to scaling for female entrepreneurs. She cites the bleak statistics for female startups. “If you are a woman of color, like if you are a Black woman, it’s almost statistically impossible to raise funding…but we are working to change that [through our Angel Network].”
Lewis points to two reasons for the gap in funding for women-led companies: “Getting the right resources, being connected to the right people that give mentorship to get access to the same life-changing business advice [as their male peers],” and that “women face extra scrutiny when they go out and seek funding.” Lewis argues that most funders invest in people they know, so giving women networking and mentoring opportunities is a pivotal way to increase access to capital.
Fighting the System
There are, of course, systemic issues. Studies show the bias baked into some aspects of the process. For example, women are more likely to be asked “prevention questions rather than promotion questions.”
Lewis explains that women face additional scrutiny. The questions investors ask about their business plans or vision are more often negative in tone.
According to a 2017 study published in the Harvard Business Review, men are asked questions about the potential for gains, their hopes, plans for advancement and achievement. Meanwhile, women were asked questions focused on “safety, responsibility, security and vigilance.”
The study reveals the difference in questioning has staggering consequences for female founders’ ability to raise funds. Entrepreneurs asked preventative questions raised an average of $2.3 million in funds. Compared to the $16.8 million raised by those asked mostly promotion questions.
Despite a record number of female-led startups—women fronted 20% of startups in 2019, double the number of women-led startups in 2009—women continue to lag in access to venture capital funding. According to Crunchbase’s End of the Year 2019 Diversity Report, only 3% of venture capital funding went to female-founded companies. The numbers are even more dismal for women of color; Fortune magazine reports that between 2018 and 2019, Black and Latina women combined only received 0.64% of venture capital investment. According to the Case Foundation, the average amount of funding raised by Black women is $42,000, when the average seed-round for startups is about $1.14 million.
A Diverse Pipeline of Women Founders & Investors
Beam commits to creating equity in its work with female entrepreneurs, particularly with women of color. “We want to have a diverse pipeline of women founders and investors,” Gaffney says. As such, they are expanding their community partnerships and geographically stretching beyond Austin throughout Texas to meet their equity commitments. Lewis says she wants the public to know Beam as a leader in the space of providing opportunities for women of color entrepreneurs. Where “they are not just included, but feel like they belong while being supported by people who really care about their well-being and the well-being and potential growth of their company.”
The nonprofit is keeping their equity commitment. They are as transparent as possible in their external messaging and about their funding process. Transparency might not seem related to equity. But lack of clear information hinders female founders without access to the typical “boys club” of venture capitalists. Further, without tracking the data, Beam cannot measure its commitment to increasing the number of female entrepreneurs from a diverse array of racial, ethnic and geographical backgrounds. Beam posts the demographics of their applicants and their investment portfolio, as well as their investors, online. The membership is currently 90% female; 45% being women of color, and women of color led six out of the last nine companies chosen for funding.
Studies have shown that despite their paltry share of venture capital funding, women are worth the investment. As women-led companies are more likely to be successful and, according to a 2018 report published by Boston Consulting Group (BCG), “ultimately deliver higher revenue—more than twice as much per dollar invested—than those funded by men.”
Women-led businesses are not just good for the bottom line; they are good for the community. Gaffney points out that even when their companies do not have an explicit social impact focus, “the way [women]think about building and scaling always has some sort of social impact, so they’re ultimately going to give back in some way.” Data shows that women business owners are more likely to invest in their local communities, not to mention they are more likely to hire other women. Women-led companies create more opportunities for the flourishing of others. “It is one of the reasons why women are really wonderful leaders,” Gaffney adds.
Gaffney and Lewis are not just speaking figuratively about the structural barriers female entrepreneurs face; they are literally working to put the money where their mouths are. Since launching in September, the Angel Network has secured over $1 million from almost 50 investors and community partners to support Texas-based female entrepreneurs. The network has received over 150 applications from female founders seeking funds. While they have not all been selected, they are all given substantive feedback that helps improve their pitches for future attempts. Gaffney muses that she wishes she had a pot of gold to share with everybody. “I see so many awesome women that just aren’t getting funded, and I believe in them.”
Making an Impact
While Gaffney and Lewis cannot fund everyone, they are still making a significant impact. In March, the Angel Network announced $500,000 in funding commitments to seven female-led companies. “Beam has gone above and beyond to give us the tools and resources to help set us up for success,” said Sara Shah, CEO of Journ Beauty. “In addition to the funding, we’ve connected with great mentors, made good friends with other female founders and know we can lean on Beam.”
Lewis adds, “We want to align with the right investors so that women feel supported in the process. Not just in this adversarial relationship when they are speaking to an investor. That folks are really behind them long-term and not just writing checks.”
In supporting one woman founder or a group of women founders, I see a much bigger picture in changing the world.
Beam not only impacts the funding side. They also provide essential opportunities for women investors. Chike-Obi points out that part of changing the funding game is putting more women in gatekeeping positions. “While it’s great to see men take an active role in helping female founders succeed, I’ve found that women have led the charge in creating room for other female entrepreneurs,” she says. “They are unapologetically redefining roles and the processes within their own organizations (i.e., venture funds, capital equity, banking) to increase access.”
Having Female Investors Matters
Lewis concurs. She shares a story about one of Beam’s angel female investors, “[She] was a bit younger than the majority of the investors that we work with, but she was very successful in her own right.” Lewis speaks of this investor’s frustration: “She really wanted to get involved in angel investing, but she mentioned to me that it was really difficult for her to just get access to folks who would be able to teach her and be able to help her understand how this all works.” Lewis concludes, “There are a lot of closed doors, which are a missed opportunity because women want to get involved on the investment side too.”
Beam investors are almost 70% women, and having female investors matters for their founder counterparts. PitchBook, a financial data company, found that women are more than twice as likely to invest in startups with at least one woman founder and more than three times as likely to invest in a company with a female CEO. Yet in 2019, Axios reported that fewer than 10% of women are in decision-making positions at venture capital firms. “We should [educate]as many women who want to get involved in funding as possible because they usually use their money to invest in another woman founder,” says Lewis.
Invest in Women Just Makes Sense
Gaffney and Lewis believe that female entrepreneurship is vital to changing the individual lives of their founders and their communities. And changing the world for the better. From increasing the number of women in the C-suite, to closing both the gender pay gap and the Black/white wealth gap and establishing universal paid family leave, women entrepreneurs have the opportunity to disrupt the racial hierarchy, patriarchal system that has persisted for generations. Gaffney argues that investing in the success of entrepreneurs who are women and, further, women of color is a tool for meaningful economic and social change. “In supporting one woman founder or a group of women founders, I see a much bigger picture in changing the world,” she says.
While investing in women does have world-changing potential, Lewis argues it also just makes good financial sense. According to the aforementioned BCG report, closing the gap in funding between men and women founders is not just the right thing. It is an intelligent thing. They found that women-led startups generate 78 cents per dollar invested. Where male-led startups only generated 31 cents per dollar of funding. “Investing in women is not just a philanthropic opportunity; [women]provide a higher return on investment and generate more revenue,” Lewis says.
Beam is not done yet.
They recently launched an analyst program in partnership with Steve Hicks and Kendra Scott at the University of Texas. Two female students, one graduate and one undergraduate, will get to assist in the Beam funding process by evaluating deals and investment opportunities. These sorts of internships are integral to increasing the pipeline of women venture capitalists. The students will gain the kind of firsthand experience necessary to help change the landscape for female entrepreneurs long-term.
“I have gotten the biggest high wiring funds over to women during [the COVID-19 pandemic],” Gaffney says with a laugh. Both she and Lewis remain joyfully optimistic about their work. Despite the challenges of funding and supporting women entrepreneurs virtually through a 14-month pandemic. “Being a part of something larger than myself [with Beam]through promoting women as they grow their companies and providing space for them to be vulnerable and share their struggles brings me joy even as we work to address challenges,” Lewis shares.
Jess Gaffney and Aisha Lewis are making an impact. While it may take extra innings, they are determined to change the game. Not just for themselves and the women they support through Beam, but for women everywhere. One mentoring session, one networking Zoom, one wire transfer at a time.