Female tech entrepreneurs flourish in L.A.
It seemed like a typical dinner party for the well-heeled set: eight women, some dressed in stilettos and skinny jeans, gabbing over glasses of wine and endive spears with goat cheese at a lavish Hollywood Hills home.
But amid the Kate Middleton pregnancy chatter and a debate on the best mascara brands, the conversation turned to mobile app strategies and the latest tech companies to score millions of dollars in venture capital funding.
Not too long ago, such meet-ups among tech-savvy women — or men, for that matter — were a rarity in Los Angeles. Entrepreneurs who wanted to launch a start-up headed to Silicon Valley.
Now, L.A.’s tech scene is exploding with new firms, a number of them founded by women. Unimpeded by the Bay Area’s cliquish male programmer culture, they’re using their expertise in retail, entertainment, advertising and media to build digital companies whose products and services are often aimed at other women.
There’s Tradesy, a fashion website and iPhone app that enables women to buy and sell pre-owned clothing. Big Frame is a digital media company that helps budding YouTube stars grow their audiences and attract advertisers. DogVacay is a pet-sitting site that connects dog owners with people willing to watch their pets for a fee.
“The Internet and mobile devices have evolved from being tech-centric products to being more consumer-oriented products,” said Dana Settle, a venture capitalist with Greycroft Partners in Santa Monica. “And now I think a lot of the businesses that are being built on top of that are actually targeting women and therefore are being built by women.”
Settle was among the diners meeting recently in the Hollywood Hills, an informal sisterhood dubbed Women in Tech. Although she remains something of an oddity in the male-dominated world of venture capitalists, Settle said she has seen a “pretty dramatic” shift in the number of local female-run start-ups since opening Greycroft’s West Coast office seven years ago. These days she can rattle off a string of firms with at least one female founder, including Nasty Gal, Who What Wear, Maker Studios, NuOrder and Shop Hers.
“In the last two or three years, I’ve seen more women-run businesses or women-men co-founder businesses than I’d seen in my entire career,” she said. “We certainly want to encourage that and support it and do everything we can to help.”
Although there are no exact figures, investors estimate there are several dozen new tech companies created and run by women in Southern California.
The rise of female-led start-ups is coming at a time when L.A. is being recast as a viable place for technology. In the last few years, the Santa Monica-Venice area dubbed Silicon Beach has seen the launch of hundreds of start-ups that have capitalized on the L.A. area’s traditional strengths in fashion and entertainment.
Among the new companies is Moonfrye, an online community for families that is developing a do-it-yourself parenting app. Founded by former child actress Soleil Moon Frye of “Punky Brewster” fame and tech veteran Kara Nortman, the company recently raised $2.5 million from investors and is seeking office space in Los Angeles.
Nortman said that her start-up is particularly welcoming of tech-savvy women and that she has found L.A. full of them.
“I keep joking that we need to hire more men — we have too many women,” Nortman said of her eight-member team. Randi Zuckerberg and Gina Bianchini, two high-profile Silicon Valley women, are serving as company advisors.
Much has been made in tech circles about Sheryl Sandberg, Facebook’s chief operating officer, and her “Lean In” movement. Ditto for Marissa Mayer, who in 2012 took the helm of Yahoo and gave birth to her first child in the same year.
Although Sandberg and Mayer have helped shatter the glass ceiling for women in Fortune 500 companies, female techies say they’d like to see more women build their own companies from the ground up.
L.A., they say, has that potential. The market is less established and thus easier to break into than Silicon Valley, where longtime connections and name recognition matter a lot more.
Los Angeles “doesn’t feel as much of a boys’ club,” said Jaclyn Shanfeld, co-founder and chief executive of Santa Monica-based Shop Hers, an online marketplace where users can buy and sell pre-owned luxury items. “Everyone is in the same position where we grow a community together, and nobody is so evolved and too good for it yet.”
To support one another, women have banded together, organizing regular tech salons, lectures, dinners and cocktail hours designed to bolster the female entrepreneur community. Some of the events are opportunities to hang out and discuss a variety of topics. Others are focused on a particular theme or concern, such as a recent panel dedicated to developing digital content for mothers.
“Half of the eyeballs on the Internet are women,” said Eva Ho, who recently started an early-stage technology fund called Susa Ventures in Los Angeles. “We need women building products for women. A lot of things come from the male perspective, especially in tech.”
L.A. has already proved that it can nurture a high-profile female tech star. Sophia Amoruso, the founder and CEO of online retailer Nasty Gal, has built one of the fastest-growing companies in the country. At 29, the tattooed college dropout is the envy of many in the tech community. Her fashion sense and effortless cool have attracted loyal customers and huge media attention.
Although Amoruso founded the company in the Bay Area, she moved it to Los Angeles two years ago because she liked the city’s creative aesthetic, which she said better reflected her brand’s edgy, provocative feel.
Last year Nasty Gal pulled in an estimated $100 million in revenue and secured nearly $50 million in funding from Index Ventures, a prominent Silicon Valley firm that has also backed Facebook and Etsy. For many, the sizable investment showed that an L.A. start-up run by a woman could hold its own.
Many men in the tech industry “are kind of baffled by me,” Amoruso said. “I just came out of the dark with no education and no business and built something bigger than most of them and did it without tooting my own horn.”
However, some female entrepreneurs say it’s still not a level playing field. They say they’re frustrated by the continued low number of female graduates in college engineering programs. They’re irritated by boys-only poker nights held by a local Internet entrepreneur. And they’re disappointed that despite recent advances, the vast majority of tech founders and investors are men.
“I’ve been called ‘honey’ and ‘sweetheart,’” said Sarah Penna, co-founder of Big Frame in Culver City. “I’m like, ‘You would never say that to a man.’... It was very condescending.”
But Amoruso said things seem to be changing as investors recognize the untapped potential of women, both as company founders and as consumers of technology.
“I think a bunch of VCs woke up pretty recently and realized women spend money on the Internet,” she said. “There are a lot of women who can take advantage of that right now. No one knows better what a woman wants than a woman, and that’s what made me successful.”
Ten L.A.-area startups founded by women
Technology investors say they have seen a sharp jump in the number of Los Angeles-area start-ups founded by women. Here are a few.
Big Frame: Digital media company that helps grow YouTube audiences and connect them with advertisers. Co-founder: Sarah Penna. Culver City; 30 employees.
DogVacay: Online community where members post openings in their homes for pet-sitting and book pet-sitters. Co-founder: Karine Nissim Hirschhorn. Santa Monica; 33 employees.
Maker Studios: Digital media company and multi-channel network of online content. Co-founder: Lisa Donovan. Culver City; more than 300 employees.
Moonfrye: Online community for families; developing a do-it-yourself parenting app. Co-founders: Soleil Moon Frye and Kara Nortman. Looking for L.A. office space; eight employees.
Nasty Gal: Online retailer of edgy clothing for young women. Founder: Sophia Amoruso. Downtown Los Angeles; 300 employees.
NuOrder: Online wholesale platform for the fashion industry that streamlines the buying process. Co-founder: Olivia Skuza. West Hollywood; 40 employees.
Pose: Mobile app that enables users to browse and shop for the latest fashion and beauty trends. Co-founder: Alisa Gould-Simon. Santa Monica; 13 employees.
PromoJam: Social marketing platform that helps users create customized online promotions. Co-founder: Amanda MacNaughton. Venice; 10 employees.
Shop Hers: Online marketplace where users can sell and buy pre-owned luxury items. Co-founders: Jaclyn Shanfeld and Jenna Stahl. Santa Monica; five employees.
Tradesy: Fashion resale website and app to sell and buy pre-owned women’s clothing. Founder: Tracy DiNunzio. Santa Monica; 22 employees.