Many entrepreneurs turn to Venture Capital firms to help fund their startup. However, there has been a notable amount of press regarding the bias present in some VC firms that benefits white male entrepreneurs while hindering non-white males. As an example, Bloomberg found that less than 3% of funding went to female entrepreneurs and they received significantly less money than did men when funded (see this article in Entrepreneur for more detail). Further, a 2016 Center for Global Policy Solutions report indicates that bias in favor of white male led entrepreneurial companies (and discriminatory financing practices) has a negative impact on the economy.
In a previous article, I interviewed Leigh Radford, head of P&G Ventures, the startup studio within Procter & Gamble, about what she is doing to invest in startups (see here for insight on P&G Ventures, how they operate, and an example of a recent invention). Below, the discussion centers on how P&G Ventures’ people, approach, and process may serve as a better partner for entrepreneurs than the more traditional avenue mentioned above.
Kimberly Whitler: How do you find businesses to invest in?
Leigh Radford: Our model is in service to the entrepreneur. We have active scouts and their entire job is to identify technologies and early stage startups. On top of it, we are quite public about what we want to create. We have a list of the specific types of product categories that we are looking to invest in and so entrepreneurs are starting to find us.
Whitler: What do your scouts do?
Radford: We have scouts penetrating campuses and talking to entrepreneurs and start-ups that are looking to create partnerships. They are looking for talent with ideas and know-how to solve problems.
Whitler: Why should entrepreneurs want to work with you?
Radford: P&G Ventures has really the best of both worlds. We have the size, scale, track-record, relationships, and experience of transforming small businesses into big ones. We also have a specific group that is focused on moving quickly. Our approach focuses on “how can we co-develop something together?” Entrepreneurs are coming to us now. We can bring supply chain, regulatory help, production … we are full service. Finally, and this is not a small thing, we operate inside of a professional, over century-old company that treats people with respect.
Whitler: Research recently suggested that older entrepreneurs are much more successful than younger entrepreneurs, which is contrary to the common myth that being young is better. Who are the entrepreneurs that you are working with?
Radford: We are age, race and gender agnostic. However, we know that there are a lot of women who aren’t getting the investment that they need and I’m sure you’ve read about how difficult Silicon Valley can be for minorities. We are offering an amazing alternative. Maybe they aren’t looking for the 10x payout but a great payout with a clear exit. This is when our reputation and track record of respect and fair treatment helps. There is a trust level and the potential of scaling. We believe we are providing a strong alternative.
Less VC money is going to women founders. I spend a lot of time bringing together women entrepreneurs. It is really hard for them. They have to do a lot more pitches to get the funding. We are not only looking for entrepreneurs, but we are looking for future CEOs. We are looking to externalize some of these businesses and need to hire CEOs. This provides them the ability to run a startup independently and be their own CEO. It is a unique model.
Whitler: What are you doing to generate interest in P&G Ventures?
Radford: There are really four things, all of which some people might not expected from P&G.
1. We are being very public that we are “open for business.” We are sharing our areas of interest and what we are trying to do. It’s critical for P&G Ventures to be more public and open to generate awareness of what we want to create to attract the best partners.
2. We created and sponsored the P&G Ventures Innovation Challenge this past year at the Consumer Electronics Show. This created an opportunity for entrepreneurs, inventors, visionaries or startups to submit their business for a chance to win an all-expense paid trip to pitch live on the P&G stage at CES 2019 in Las Vegas. The winner of the pitch received $10,000, qualified as a finalist in a Techstars accelerator and was provided with complimentary attendance to the EY Strategic Growth Forum.
3. You’ll also find us at conferences with high concentrations of founders, such as the Forbes Under 30 Summit. I spoke there last September on this exact topic; the evolution of corporate venture groups and how they’re different than traditional venture capital avenues.
4. Most simply, you can also find us on social media. We want to make it easier for entrepreneurs to connect with us. You can reach out to us on https://pgventuresstudio.com/, our LinkedIn page (P&G Ventures Studio), and Twitter (@PGVstudio). We want to be easily accessible to wherever entrepreneurs are.
For entrepreneurs who want an alternative to the traditional VC path to funding, P&G Ventures offers a different approach. With a nearly 200-year-old track record of creating, developing, and scaling global businesses—and a reputation of treating of employees and partners well—P&G Ventures may be a preferred option to “business as usual” in the VC world.