A dynamic and dedicated advocate of women-owned businesses, Whitney Johns shifted her career from mergers and acquisitions to venture capital when she founded Capital Across America in 1998. A Small Business Investment Company, CXM targets an under-served market by connecting women and minority business owners with growth capital. Oftentimes, Johns has learned, that is easier said than done in Southern regions dominated by white, male investors.
Aside from changing history and bashing glass ceilings, Johns spends her time serving as president of the National Association of Women Business Owners. She was also a President Clinton appointee to the last White House Conference on Small Business and received the 1998 Advocate of the Year Award from the U.S. Small Business Administration for the Southeast Region.
In the following interview, Johns discusses her personal struggles as a revolutionary woman in a male-dominated industry, the long road ahead for women entrepreneurs, and the South’s greatest economic strengths and weaknesses.
Fighting Time and Tradition
As a national leader in a woman’s business organization, I was traveling all over the country and hearing from women who needed startup capital. I realized that there were no women-managed Small Business Investment Companies, and there never had been one in the 40-year history of the U.S. Small Business Administration,. So, I started a crusade to become the first woman to start a fund that would specifically target women-owned firms for investment. Since we started in June 1998, two more funds have been licensed, bringing the total to three woman-managed funds dedicated to investing in woman-owned firms.
It was difficult to raise money for a fund targeted toward women because the financial community that invests in funds was not aware of the market, or the needs of the market. It took us a long time to raise the minimum capital necessary to apply for a license. I think that is because this a relatively new phenomenon and there’s not a lot of information available about the market. The investors — like Bank One — who invested in us turned out to be savvy investors who knew there was a market.
It’s a Mental Battle I try to make women business leaders aware that raising money is a process, and that they need to develop certain skills, talk to mentors, and seek out professionals who can help them. I also tell women how to prepare themselves, their employees, and their companies for the fundraising process. That advice can run the gamut from preparing financial records to preparing emotionally for the upheaval of raising money. It’s difficult. There is a lot of rejection, and ups and downs.
Women Are From Venus
In my personal experience, I don’t think there is an element of overt discrimination in the investment community but I do think there is a difference in the ways men and women run companies, and the way they talk about their businesses. Sometimes when a woman business owner is talking to a male investor, she may appear so unlike the male investor that he will not invest in that company because he doesn’t understand her value system or management style. That’s not an overt discrimination, but it is a lack of understanding.
One answer to that problem is to recruit more women into positions such as mine.
Sexism in the South
The question is not North versus South, but large city versus smaller city. The large cities like Los Angeles, New York, Chicago, and Dallas, seem more able and willing to integrate women business owners into the general economy. Business communities there don’t find it novel or strange that a woman would own a business, or that a woman would take part in a field like construction or engineering. Likewise, investors in those cities are more accustomed to seeing women business owners, and are therefore less likely to put up that unseen barrier between themselves and the women. Smaller cities like Nashville, Louisville, or Raleigh are not quite so far down that path.
Most corporate boards of directors at mid-sized businesses don’t include women. They also don’t necessarily promote women into management. I do have to brag about the Federal Reserve Bank in Atlanta, however. I serve as chairman of the national branch of the Federal Reserve Bank, and I’m just amazed by the integration of that board. It is perhaps 50 percent women, and has great minority representation. That may be the most progressive of all the Fed banks in the country, and they are headquartered in Atlanta.
The South’s high-tech economy is very far behind the rest of the country’. The new high-tech hotbed is in the Washington, D.C. area. I think the South is trying to get there, but we are a long way from it. And that is because, unlike Silicon Valley and Route 128 in Boston, we don’t have strong venture capital representation. Also, we don’t have strong scientific communities in cities like Nashville. Scientists and engineers like to live in communities of similar folks, and those communities just don’t exist in cities like Nashville. We need pioneers to go into these towns, and change that precedent.
Anything the government can do to reduce the burden on a small business owner would be helpful: a reduction of taxes, a friendly environment toward small business, a reduction of paperwork and licensing requirement, would entice entrepreneurs to locate in the South. It’s the startups that have the potential to hit it big and become huge leaders in their area. Once they are established, those forerunners can spawn similar businesses and create a whole new economy.
The Rust Belt Moveth
The South is really becoming a leader in automotive production. There is a theory that the South, with Tennessee at the lead, will have more jobs in the automotive industry by 2099 than the Rust Belt has now. In the meantime, a lot of companies can move to the South in relation to the automotive industry. That is a dynamic market for women to enter — manufacturing parts related to the automotive industry. Also, the South is regionally to largest producer of building products in the country. That will continue for some time, and that also is a fertile area for women to explore.
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