Why venture capital can be a trap for entrepreneurs | Nathalie Molina Niño | Big Think

Why venture capital can be a trap for entrepreneurs

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Venture capitalism is glamorous. But is it smart? Securing a huge series A investment round can get founders on the covers of magazines, but VC can take as much as it gives. CEO of Brava Investments Nathalie Molina Niño offers a straightforward piece of advice to all entrepreneurs: "Do not take venture capital from any investor, no matter what terms they’re giving you, unless you’re willing to be fired from your own company," she says. For female and minority entrepreneurs, this advice is even more important—yet so much harder to follow once you know the stats. Female-founded companies currently get just 2.5% of all venture capital. For women of color, that number drops down to 0.2%. If this underfunded (and potentially desperate) group accepts poor venture capital packages with horrible terms, it can only end in disaster, Molina Niño warns. "It’s going to produce a whole series and maybe even a whole generation of entrepreneurs that were disproportionately more likely to fail... They’re going to look at stats that simply say that women and people of color fail at a greater rate than anyone else." While venture capital is the most romanticized type of investment, Molina Niño outlines several fundraising alternatives that let founders stay in control of their companies. This is the advice every entrepreneur, regardless of demographics, needs to hear. Nathalie Molina Niño is the author of Leapfrog: The New Revolution for Women Entrepreneurs

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NATHALIE MOLINA NINO:

Nathalie Molina Niño is the CEO of BRAVA Investments and the author of LEAPFROG, The New Revolution for Women Entrepreneurs (Tarcher Perigee, a Penguin Random House imprint). She is committed to delivering returns to investors while making a catalytic impact on women in the world. A technologist and coder by training, Nathalie is a consummate entrepreneur, and a storyteller at heart.

Prior to launching BRAVA, Nathalie led the launch of SELF MADE, the company, mobile app, learning platform and NY Times Best Selling book by Telemundo's former Entertainment president, Nely Galan. In 2015, Nathalie stepped in as interim Chief Revenue Officer of PowerToFly, a startup aimed at closing the gender gap in tech. And in 2012, while at Columbia University, Molina Niño co-founded Entrepreneurs@Athena at the Athena Center for Leadership studies of Barnard College, with the mission of leveling the playing field for women entrepreneurs. Nathalie launched her first tech startup at the age of 20.

Prior to Athena, Molina Niño was involved in launching and growing a multinational business with Lionbridge (NASDAQ: LIOX) into a $100M operation in 30+ countries. At Lionbridge she helped lead the growth of its largest business from approx $5M in 2003 to nearly $100M in 2009, including the inception of the strategic relationship with Microsoft Bing.

Molina Niño has advised industry leaders in both the for- and non-profit sector ranging from multinationals (Disney, Microsoft, MTV, The Discovery Channel, Mattel), early stage startups (Cranium, Onvia) and non-profits (Bill & Melinda Gates Foundation, World Affairs Council, Seattle International Film Festival, Athena). She writes and is quoted widely in the media, from best-selling books like Tim Ferriss' 4-Hour Workweek to diverse media outlets ranging from Bitch Magazine to Forbes, Time Inc and CNN Money.

As New York City & State's Corporate Social Responsibility Honoree, Nathalie has been recognized for her exceptional leadership in educating women founders. Keith Ferrazzi called her a “super-connector" in his updated best-selling classic, Never Eat Alone

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TRANSCRIPT:

Nathalie Molina Nino: So women entrepreneurs currently are getting about 2.5 percent of all venture capital. It’s not the only source of funding, but it’s a really great indicator on how we fare in the space. And that’s a fairly commonly understood statistic.

But the statistic that I like to feature—which is the one that nobody ever talks about—is what percentage of funding is actually going to Women of color, and that’s a much more dismal number. That’s actually—depending on what city you look at it’s between 0.1 percent or 0.2 percent, which is to say that women of color and companies founded by women of color aren’t really even statistically relevant as well.

The fact that women...

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