You Need to Know About SheEO!

Welcome to She Invests, a monthly newsletter on women, money, and investing. This is newsletter #6! If you have not seen the first five yet, please click here,  here, here, here, and here. Thank you for reading and sharing. So far 15,000+ subscribers and I thank you all! If someone is sending this to you, please subscribe.

Take a minute to answer this question. Do you think the world’s financial and economic systems are working? Yes, that is a very big question, but just take a minute to really think about it. If you think the answer might be yes, let me offer you a few statistics to ponder from right here in the United States. The US has the highest economic inequality of all the G7 nations, and in 2019, income inequality was at its highest point in 50 years. Between 1989 and 2016, the wealth gap between America’s richest and poorest families has doubled, and the top 5% of wealthy families are the only income bracket to have increased their wealth since the Great Recession. So my answer to my opening question is no, heck no, and while I personally have benefitted from these broken and biased systems, it is also my work in the world to help change them. Vast economic and social inequality is certainly nothing new, so the question becomes, what can be done about it? And if you are a person who really cares and wants to build something, particularly a financial services something, based on radically different values, what does that look like? 

Well, it looks like Vicki Saunders and SheEO. Vicki is the Founder of SheEO, and she is someone who has spent a lifetime noticing how messed up everything is. And then she actually goes and does something about it. In creating SheEO, she set about creating an entirely new economic model; one that is rooted in the potential of community connections. One that focuses on creating the environments and cultures that allow people the opportunity to thrive. 

This newsletter is dedicated to looking at the fields of finance and investing with a gender lens, so doing a profile piece on this amazing woman is right on mission. And let me be clear, there will be an ask at the end, because making an ask is one of the things that Vicki believes in. In fact, she will not end a call, including the one we had, without making one.  

So to begin with, who is Vicki Saunders? She’s Canadian ( #soamI ) and her pronouns are she/her. She is an entrepreneur, award-winning mentor, advisor to the next generation of change-makers, and leading advocate for entrepreneurship as a way of creating positive transformation in the world. She also happens to be one of the most quotable people I have ever met, and she started our conversation with a doozy. 

“Every 400 years there’s a reboot of what we as a society value, and guess what Adam Smith? The era of self interest is over.” 

Who is Adam Smith you might ask? He is primarily known for a single work, The Wealth of Nations (1776), which included Smith's description of a system of market-determined wages. He is credited with being the father of capitalism, which, no surprise, Vicki does not think is working, because it is fundamentally based on the pursuit of self-interest. So if this new and better world she aspires towards is not based on self interest, what is it based on? “Easy,” she answered. “It’s based on Radical Generosity.”

Radical Generosity is the simple (but sadly still radical) idea that we should all be kinder to ourselves and to others. “There are no power words for being kind,” Vicki laments. And believe me, this woman is all about power. “Everything in finance and business revolves around sports or war metaphors. You ‘killed’ it. You ‘crushed’ it. You ‘nailed’ it. Where are the words for being kind and generous?” Matching words like generosity and kindness with capital and funding? Revolutionary. As Vicki describes it, Radical Generosity is a very personal concept, and will manifest differently for every person. The scale of it doesn’t matter. It’s about starting where you are, and then doing a little bit more for both yourself and others.

When it comes to the current economic model, Vicki’s assessment is extremely blunt. “Everything we invest in to make money creates inequality.” My argumentative radar went up with that claim, but when I challenged her, she was quick to say, “Think about it”. And I am. She went on to talk about how over 90% of most countries’ economies are made up of small and medium sized businesses. In the US it’s 90%, and in Canada it’s 98%. Take that in for a minute. The lifeblood of our economies flows through these businesses. If we want to care for people, we need to care about the wellbeing of these types of businesses, in all their forms. And yet the dominant narrative continues to focus on venture capital (VC) funding and unicorn (companies that reach a billion dollar valuation) companies. A disproportionate amount of time, attention, and money goes towards trying to find the next Bumble (shout out to Whitney Wolfe Herd!), but as you already know from my last article about the Cheerios, this system of allocation capital is riddled with bias and inequities.

These past couple of months I have been catching up with the founders of my 17 portfolio companies, and I have seen in real time how this narrative plays out. All of them have taken in investment capital in a traditional way, and for many, it simply is not working given the nature of their businesses. This is a topic for a separate article, but for now, just take my word for it. Vicki is spot on. 

So if traditional venture capital does not work for up to 99% of businesses, and if you are not a white male with a powerful bro network to get access to capital, how exactly do you get the support you need to grow your business? Where is the help you actually need, keeping in mind that this may not just be financial help? Enter the SheEO model. 

SheEO is a global community of radically generous women building a $1Billion perpetual fund to support women working on the World’s To-Do List.

In keeping with her theory of creating new language to create new behaviours, SheEO is not backed by investors. “Women don’t tend to see themselves as investors. We wanted a different mindset coming into SheEO, so we call you an Activator,” Vicki explains. Activators contribute $92/month or $1,100/year into SheEO’s perpetual fund. You do not get that capital back, so it is in effect a donation, but you won’t find the word ‘charitable’ in the language of SheEO. There are currently over 6,000 Activators who all have resources to share. And again, not just financial resources. They share every available resource at their disposal, including their time, networks, and knowledge.

Companies, on the other hand, are called Ventures, and they must meet one basic requirement. All Ventures must in some way be working on the World’s To Do list. In other words, how is this Venture changing the world? Once again, Vicki is brutally honest in her assessment of our current economic reality. “Not a single penny should go towards things that aren’t on the world’s to do list. In order to be accepted at SheEO, a Venture has to be able to articulate how they are changing the world for the better by solving one of the world’s to do items.” SheEO is currently using the UN’s SDGs for this criteria, but they are working on creating a more expansive and inclusive model of just what exactly is the world’s to do list.

So how does SheEO work? Every year, Ventures that are women-identifying majority owned and led apply to the program, and Activators vote in two rounds to determine which Ventures are selected. A number of Ventures are selected each year based on the number of Activators, and the selected Venture leaders are brought together to decide how to divide up the money. The two rules for doing so? You can’t give it all to one (no winner takes all) and they can’t just divide it up evenly. Coaches and mentors are on hand to support the Venture leaders through the negotiation, and once the pot has been divvied up, Ventures have five years to pay back the money at 0% interest. The money is then loaned out to the next cohort, and so on and so on, with all Ventures collectively being responsible for repayment.

To date, SheEO has a 95% successful repayment rate, and Vicki credits this to the shift in collective thinking when it comes to which Ventures to fund. “The number one question we ask Activators is, ‘Would you buy or recommend this product to others?’ Some Activators look at the financials and some don’t, and we don’t worry about that. No one really knows how to pick a winner. We trust the intuition of hundreds of women to vote. Collective intelligence has been proven to work better than experts, so we go with it and it’s served us well. Remember, women control 85% of all purchasing decisions. If women get behind something, the probability is high that it will work.” I nearly did a fist bump when Vicki said this, because it’s exactly what I’ve been saying for years. Women’s purchasing power is one of the greatest untapped potentials for enacting social change. To hear it being used to dismantle structural financial inequity made me want to whoop with joy.

SheEO is also unique in the way it approaches Activator/Venture relationships. As Vicki notes, Activators are not getting their money back, meaning it removes the conditions that exist, often to the detriment of companies, in traditional investor relations. “We believe that the innovator at the helm of these Ventures should set the rules. Activators are not here to set parameters for your Venture. Instead, when you walk into SheEO, you inherit an army of people ready to help and support you in any way they can, on your own terms.”

To say that SheEO is an innovative organization would be the understatement. Financial innovation is at the heart of everything they do. They are disrupting systems both literally and more figuratively. When it comes to traditional investment, SheEO is forcing a collective shift in thinking, and forcing Activators to re-examine what actually matters when making decisions.

Today, SheEO is announcing its next US cohort, and Vicki is proud to note that 24.2% of all applicants were Black and 44% were BIPOC. SheEO has been working hard to establish relationships and trust with marginalized communities, and she credits the testimonials of two previous Venture leaders, Kai Frazier and Wakumi, as helping to open the floodgates of applicants. In particular, there was a 46% increase in Black applicants, and after two rounds of voting among thousands of Activators, all five Ventures of the new cohort are Black. I just met all the founders on a ZOOM call and holy moly! I can't wait to dig in and offer them additional support as they are all looking for champions, business connects, capital and more.

Listed below (and pictured above) are the winning companies and I encourage you to check them all out. If you feel compelled to try to do something, anything, to help these founders succeed, just do it! Reach out to them directly.

1. Courtroom 5 - Sonja Ebron - https://courtroom5.com/ - Automated legal toolbox for people in court without a lawyer (SDG targets #10.2 & 16.2)
2. Mahkers studio - Wanona Satcher - https://makhersstudio.com/ - Green manufacturing and design-build firm that specializes in unique modular shipping container real estate. (SDG targets 11.1 + 9.4)
3. 100K incubator - Arielle Loren Palmer - https://100kincubator.com/ - The first business funding app for women in Apple and Google's app stores (SDG targets #1.4 & 9.3)
4. COI Energy - SaLisa Berrien - https://coienergyservices.com/ - Energy management platform that detects, prevents and eliminates energy waste in buildings to improve efficiency and provide marginalized communities with equitable access to clean energy solutions (SDG Targets 7.1, 11.6, 12.5).
5. Brown Toy Box - Terri-Nichelle Bradley - https://www.browntoybox.com/ - Children's educational products company that centers and celebrates Black children to expand ideas of possibilities for their lives (SDG target #4.4 & 10.2)

SheEO is currently operating and supporting cohorts in the US, Canada, the UK, Australia, and New Zealand, but Vicki knows that this model is easy to replicate in countries around the world. And you’d better believe that’s her goal. “Every single country is in deep trouble when it comes to figuring out how to get money into the hands of small and medium sized businesses, the engines of their economy,” she says. “That’s why we want to scale up and replicate the model in every country. All you need is to find the right people who are locally connected and our model works. At the end of the day, we want to find the innovation and spread it globally as soon as possible. That’s how real change will happen.”

As I’m sure you’ve already guessed, I am an Activator with SheEO. I believe wholeheartedly in the model and Vicki’s vision for disrupting power systems in the financial systems. At one point in our call, Vicki mentioned that she wanted to start her own bank in order to reinvent the system, and all I can say is that I hope she does exactly that one day. In the meantime, I urge you to check out SheEO, and if you can, please consider becoming an Activator. SheEO aims to create a $1B perpetual fund through 1M Activators that will change the course of women owned and led ventures for generations to come. That’s an incredible legacy, and more importantly, community, to be a part of for just $92/month.

It is easy to do nothing. It is also easy to do something. Why not let today be the day you do something? You may have been thinking "what can I do to economically support women, and in particular women of color, in a real and tangible way?" Well this is one option. Just do it. And if you do join, please let me know in that comment section. And.. thank you.

“We are never going to fund more women if women don’t start writing the checks. But if we can change the process, we can change the outcomes. At SheEO, we are not here to win. We are here to transform.”