Investor Stephanie Newby helps women entrepreneurs
Stephanie Newby’s trajectory at J.P. Morgan had been by all accounts an impressive one; but for her, one that lacked purpose.
In the male-dominated industry of finance, Newby had ascended to the top ranks where she headed several global divisions, including futures and options and private banking. But it wasn’t until she was offered a supporting role as chief operating officer of global equities that she felt she had hit the proverbial glass ceiling.
“You’re not running the whole business. You’re not running the revenue side,” she explains. “I could have said ‘no’ I suppose, but you don’t. I thought, wow, how could they let that happen? I’m only one of two global business managers who are female and no one ever thought I wasn’t good at it,” she says of the Wall Street boys’ club.
It was then she decided she would start Golden Seeds – an investment firm dedicated to delivering above-market returns by giving capital to women entrepreneurs. Still, she would stay on at J.P. Morgan for two more years before embarking on that mission so she could rebuild her finances after a costly divorce in which she fought for custody of her two children, Adam and Holly, now 24 and 22 respectively.
Six months before she left the company she was asked to head up e-commerce, which was a new role in 1999, but by then she had checked out and had her sights on starting Golden Seeds.
BREAKING THE GLASS CEILING
“What I realized is that we needed more women owning and running companies from the beginning, because it’s all about corporate culture. That is, if you have a culture that is 200 years old that’s always been basically run by men, it’s impossible for them to see the world differently,” Newby says.
Last month, she was quoted in a Wall Street Journal article about Ina Drew, the J.P. Morgan chief investment officer whose $6 billion trading loss forced her to resign. In the article, Newby explained how women in those days kept their family matters hidden at the office. She made sure never to have pictures of her young children around or even mention them.
“You never wanted there to be an excuse for why you couldn’t get ahead,” she told the Journal.
Over a cup of tea in the kitchen of her Greenwich home, the Australian native described what it was like to work on Wall Street back then.
“So we pretended we weren’t women really or that we didn’t have any other responsibilities.”
She acknowledges, however, that a lot of progress has been made in the last 10 years. People feel more comfortable talking about how women are different than men instead of trying to prove that they’re the same. And that, she says, is a significant difference.
“Because a lot of studies about diversity have shown that it’s the diversity that’s valuable.”
One of those studies appeared in the Harvard Business Review, in which Anita Williams Woolley, a professor at Carnegie Mellon University, found that a group’s collective intelligence had little to do with the IQs of its individual members. But if a group included more women, its collective intelligence rose.
Another report appearing last month in The Wall Street Journal from Dow Jones VentureSource, which tracks startups and their investors, found that venture-capital backed companies with female senior executives are more likely to succeed than companies in which only males are in charge.
“I don’t want all women, because I believe in diversity. I think when you get men and women together, you get better results,” Newby says.
GETTING HER WINGS
This is the premise on which Golden Seeds was built.
Before launching that enterprise, however, she took some time off, sleeping in and playing lots of tennis. She also sailed around the world with her longtime love and future husband, Eddy Healy; his two children, Matias and Nicole; and her own.
Energized by the trip, she decided her next move ought to be learning the private equity business, so she volunteered to work for free at Bold Cap Ventures, a little fund started in 2001 by Kay Koplovitz – founder of USA Network – with women limited partners.
It was at BoldCap Ventures that Newby learned about angel investing, in which an individual provides capital for a startup in exchange for ownership equity. Many angel investors organize themselves in angel networks, like the one Newby joined, New York Angels, in which she was only one of three women in the 75-member group. That makeup, she says, is fairly typical in the business world.
“So we just tipped the normal ratios upside down,” she says, referring to the female/male ratios at the company she started in 2004.
Today, Golden Seeds’ angel network consists of 250 men and women, is the fourth largest in the U.S. and the third most active in terms of deals accomplished in 2011. Its venture capital group of eight managing partners has two funds with $30 million under management and investments in 26 portfolio companies. A third fund hopes to raise $150 million.
Its mission is to support women entrepreneurs because women tend to get a smaller piece of the venture capital pie. But Newby makes a distinction between women in business and women entrepreneurs.
“We’re only investing in high-growth businesses. So they have to be able to get $20 (million) to $30 million in revenue in five years,” she says.
All of the companies funded by Golden Seeds are still in business, some doing better than others, like Crimson Hexagon, which evaluates social media. So important is this company to Golden Seeds that Newby has stepped in as interim CEO while the board makes a management change.
“If this company does well, then our fund one is going to do really well. You only need a couple of companies to do really well for the whole fund to do well,” she says. “So I said I would go up there (Boston) and run it until the board had enough time to find a really great candidate.”
Supporting other women at Golden Seeds gave Newby the purpose that had eluded her throughout her career at J.P. Morgan, which for her made all the difference.
“I do think that if you’ve managed to create financial security then it’s fabulous to be able to do something that has real meaning. You’re not just working for money,” she says. “Once you’ve earned a big house, you can’t wait to get into a small house. So the point is you realize you don’t actually need all that money anyway. But until you’ve had it, you don’t actually know.