In the last few years, the highly publicized women empowerment movement has ignited a broad conversation on the role of women in business. Amongst those on everybody’s lips are women entrepreneurs.
So are the ecosystems supporting these women? For the first time since its inception, the Mastercard Index of Women Entrepreneurs named Israel the best country for women entrepreneurs in 2020. The report found that Israel is “a prime example of gender-specific support mechanisms” and its success was driven by a concerted effort to double the number of female entrepreneurs within the next two years.
But behind the enthusiasm of all fashionable social changes hides a tougher reality for women who decide to launch their own business. With only 7% of Israeli entrepreneurs being women, and female-led companies raising $1 for every $2 raised by their male counterparts, many stereotypes associated with entrepreneurship continue to create barriers for female entrepreneurs.
Cynthia Phitoussi and Audrey Chocron, managing partners at SeedIL Ventures, have spent the last ten years proving these preconceptions wrong, by means of a discreet and progressive execution. The pair strongly believes that entrepreneurship should be the way for women to set their own rules and challenge outdated gender bias. This is what spurred them to become entrepreneurs themselves only a few months after moving to Israel from London when they created one of the first accelerator programs in Israel, TheHive by Gvahim, in 2010.
From the very beginning, they were determined to break into this fascinating ecosystem that is the Startup Nation. “Through this first venture, we were lucky enough to witness the many success stories Israel has produced over the years, and meet the leading lights of the Silicon Wadi, such as Yair Goldfinger, Raphael Ouzan, Moshe Mor, Adam Fisher, as well as Inbal Arieli and Liat Aaronson. We were deeply inspired by their passion, work ethic and commitment to helping the companies that shape our future reach their strategic potential,” indicates Audrey Chocron, a former senior relationship manager in a large bank.
A seed had been planted in their minds. But growing it proved to be a different story. Both French immigrants, they were eager to make a mark in Israel, encouraged by what they like to call their “Zionism 2.0”. In 2014, they decided to launch SeedIL Club, an investment club gathering 65 accredited business angels and aiming to bridge the gap between Israeli startups and private investors across the globe.
Emboldened by the trust investors had given them and the success of the portfolio they had built, they decided to fulfill a long-held dream and launch a fully-fledged venture capital fund, SeedIL Ventures, in 2018.
However, the pair faced their fair share of doubt from naysayers along the way. What could possibly lead two new immigrant women to think they could make it in the Israeli VC scene? “Precisely by blending in local color and demonstrating our best rendition of the Israeli chutzpah — that is not debating whether we could make it, but focusing on how to make it,” says Cynthia Phitoussi, a former consumer market research manager for large FMCGs and entrepreneur.
Many were not shy to express their disbelief and tried to talk them out of it. During the whole process, they faced several setbacks but stayed committed to their end-goal.
During SeedIL Ventures’ fundraising, their difference proved to be a strength on several occasions. “In hindsight, despite the customary pitfalls common to every venture capitalist, being women might have helped us stand out sometimes”, contend the two managing partners, who travelled to Europe and the United States to convince investors to invest in their new fund.
In the end, their determination paid off and they managed to achieve their first closing within nine months. They built a solid investment committee to accompany them in the selection process, including tech and business assessment, among them, Mark Ziering, Patrice Giami, Yves Michali, Marcio Lempert and Daniel Amzallag.
They have invested in 22 startups since 2014, of which 18 are still active and one was acquired last year. Combined, their portfolio companies have raised $185 million and currently employ 385 people in Israel and abroad. A number of them successfully raised large Series A and B rounds, including BreezoMeter, nanobebe, Sweetch, UVeye, Shopic, Donde and Dataloop. Two recent Seed rounds include Konnecto and myInterview.
Along the way, they have had the privilege of co-investing with prestigious Israeli and foreign VCs who have praised the transparency and efficiency of their due diligence. Their motto? Bringing value to their portfolio startups through their broad international network, helping them find new commercial contracts, new talents and new investors. “We pride ourselves for being friendly, knowledgeable and reliable investors. We leverage our boutique status to tie close relationships with our founders and support them in their venture,” insists Chocron. The fund has also forged strong partnerships with top startup accelerators in Israel, such as Technion DRIVE and IDC’s Zell Entrepreneurship Program, committing to provide their most promising companies with their first VC money.
It has been a long and arduous road, far less glamorous than meets the eye, but Cynthia and Audrey are proud of every step. “Because we built our fund from scratch, with the highs and lows that come with it, we feel like true entrepreneurs and nurture this entrepreneurial spirit to bring value to our portfolio companies,” argues Phitoussi.
Still today in Israel, few women are hired in VC funds, let alone at a partner level. For the past ten years, the pair has been surprised by the underrepresentation of women in business meetings, boards of directors, as well as tech networking events. “Recently, we organized a Zoom event with 14 of our founders and were the only two women on the call, reinforcing our feeling of being alone in a man’s world. As for our limited partners, only 5% of them are women,” relates Chocron.
“Even after a decade navigating the ecosystem, we are often asked who the managing partners of SeedIL Ventures are, implying there must be a man on the team,” jokes Phitoussi, half amused.
Yet, women make great investors. In fact, research hints at many benefits of women investors, such as being more cautious of risk and better at cutting their losses, having better crisis management skills and putting extra time to research and enlighten their investment decisions.
Women can better grasp entrepreneurs’ personality, their DNA, strengths and weaknesses. Many of SeedIL’s founders will tell you that part of the investment process consists of putting them on the spot about every aspect of their business, irrespective of the ticket size. In that sense, women are more forthright, more “tachles” to the point (Hebrew slang meaning getting straight to the bottom line), less prone to battles of ego, and more open to admitting when they are wrong.
Thus, there is an urgent need for a shift in cultural perceptions of entrepreneurship to support greater gender parity in business. Recently, gender-focused incubators and accelerators have emerged to propel women forward and build new frameworks by and for women entrepreneurs. But much remains to be done.
“We feel a certain sense of responsibility as women investors,” asserts Chocron. Today, the two investors wish to continue on this path for their next dream of a larger fund.
May they set the tone. Rather than competing against men or each other, women ought to empower their peers to truly advocate for change.
Written by Alexandre Suertegaray