Illuminate enjoys having the opportunity to write and post articles on sites such as Inc.com, Sandhill.com and Fortune.com.  You'll find some of our recent posts, interviews and other publications here: 

 There are very real difference in how women and men (and VCs) view entrepreneurship, underscores a new survey

By Connie Loizos

In the increasingly crowded world of venture capital, many more firms are producing research as a way to differentiate themselves from the pack. Earlier this year, for example, Wing, a venture firm that focuses primarily on enterprise startups, published a state of the industrial IoT market. The consumer-tech investment firm Goodwater Capital is becoming known for its occasional equity research report on a still-private company.

Now Illuminate Ventures, a nine-year-old, woman-led, early-stage venture firm that’s focused on enterprise cloud and mobile computing startups, has produced some thought-provoking research of its own around how women and male founders view entrepreneurship, from why they do it to how much support they receive from family members.

Full article here.

 How the Founder of Modsy and Her Mentor Are Building a 'Power Squad' to Help Women in Business

By Stephanie Schomer, Senior Editor

In the Women Entrepreneur series Mentor Moments, female founders sit down to chat with their own mentors (and us!) about how and why the relationship developed, and the lasting impact it’s had on their careers.

Shanna Tellerman has had a really busy decade. After launching her first startup while in grad school at Carnegie Mellon, she moved to San Francisco to immerse herself in the world of tech startups and got a crash course on building a successful company. Serving as a guiding voice of reason and experience was Cindy Padnos, who Tellerman met through simple networking. (Ask for those connections and introductions, ladies!) The two became fast friends, and Padnos,the founder of VC firm Illuminate Ventures, became an invaluable advisor to Tellerman, who eventually sold her first company and spent a few years working in the VC sector before launching her second and latest project, Modsy, in 2015. Modsy uses 3D modeling to help users design and shop for their homes and has raised nearly $40 million in funding. With more than ten years of experience under her belt—and with Padnos still as a close friend and advisor—Tellerman is now focused on taking her company to the next level and working to make sure all female founders have the support system they need and deserve. The two women look back on their long relationship and their big plans for the future.

Women Entrepreneur: How did your paths first cross?

Cindy Padnos: Shanna and I both went to Carnegie Mellon—but at very different times! But it actually wasn’t Carnegie Mellon that introduced us. It was a Bay-Area attorney with a nationwide firm, and one of his colleagues was working with Shanna, who was working on her first startup in Pittsburgh while she was in grad school. He told me about her back in 2007, said she needed an advisor and wanted me to chat with her the next time I was on campus.

Shanna Tellerman: I was in the habit of connecting with people and at the end of the meeting, asking who else I should meet. And it led me back to Cindy and Carnegie Mellon. We had a memorable meeting in a coffee shop in Pittsburgh.

Full article here.


White Paper: Women in High Tech – Summary

Research shows what many have long suspected: women entrepreneurs are poised to lead the next wave of growth in global technology ventures. The full report, prepared by Illuminate Ventures, documents the performance of women entrepreneurs in the past decade and the trends that are propelling them towards critical mass in the high-tech sector.

Full 15-page paper available here.


  • Efficiency, Efficiency, Efficiency: The high-tech companies women build are more capital-efficient than the norm. The average venture-backed company run by a woman had achieved comparable early-year revenues, using an average of one-third less committed capital.
  • Big Progress in Recent Times: More women are serving as officers of venture-backed companies with successful exits. In 1988, only 4% of the 134 firms that went public in the U.S. had women in top management positions. Of 2009’s 19 high-tech IPOs, all but two had at least one woman officer.
  • Expanded IP Contributions: From 1985 to 2005, the annual number of U.S. female-invented fractional software patents increased 45-fold – three times the average growth rate in that sector.
  • Growing Influence in Tech: Women-owned or led firms are the fastest growing sector of new venture creation in the U.S., growing at five times the rate of all new firms between 1997 and 2006 - now representing nearly 50% of all privately held businesses.
  • Venture-level Returns: In the past 10 years more than 125 companies with over 200 women co-founders or officers have achieved IPOs or >$50M M&A exits in the U.S. high-tech sector alone.
  • Diversity Improves Performance: Organizations that are the most inclusive of women in top management achieve 35% higher ROE and 34% better total return to shareholders versus their peers - and research shows gender diversity to be particularly valuable where innovation is key.

The bottom line: More than ever before, women are influencing the face of business. They are on the cusp of becoming a leading entrepreneurial force in technology.



 Why Middle America Can Be Better For Entrepreneurs Than Silicon Valley 

By Cindy Padnos, Illuminate Ventures

When considering the future of technology and innovation in America beyond Silicon Valley, most people think about a robust scene in New York or Boston. Yet when I look harder at where some of the fastest growing companies and best opportunities are unfolding, many are cropping up in the area between the two coasts.

Our San Francisco Bay Area-based venture capital firm, which has long-focused on investing in enterprise software startups, has explored several of these new entrepreneurial hubs, and recently decided to double-down to emphasize involvement in one such place in particular: the greater Pittsburgh area.

Why Pittsburgh? It's a good question, and the answer has surprising ramifications for entrepreneurs across the entire country.

Emerging venues can be better--for both entrepreneurs and investors

Statistics from the National Venture Capital Association show that over three million new jobs per year -- and almost all net new job creation in the last 40 years -- have come from young companies, not from the large corporations that are actually shedding employees.

Pittsburgh tops our list because what's happening there best reflects the growth and acceleration of a more supportive climate for entrepreneurs throughout our nation. The city boasts ten universities (including two of the top 50 research universities in the US and a top-10 ranked business school). It houses the federally funded Software Engineering Institute for research and development and the Super Computer Center.

With the ninth-most Fortune 500 companies in the country, the local community has shown its commitment to growth through knowledge-economy jobs, attracting companies like Google, SAP, and Autodesk to build teams there. Reflective of this ripe ecosystem is a 19 percent annual growth rate for new VC-backed start-ups in the region.

We also have personal connections that offer us a leg-up to identify potential investments and work with others in the region. Add the high level of well-educated talent available to lower costs and lesser employee attrition rates, and you have a winning combination.

Click here to read the full article


Stanford Technology Ventures - Entrepreneurial Thought Leaders Series: An Enterprising Approach to Investment

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Cindy Padnos Interviewed by Tom Kosnik http://stanford.io/WvhccN  also available as podcast


Facebook-Blind VCs Missed Opportunities in B2B Cloud Investments

By Cindy Padnos, Illuminate Ventures
Venture capitalists have been blinded in recent years by consumer technologies – but the real opportunity lies elsewhere.

In the consumer internet and business-to-consumer (B2C) categories, there have been some dazzlingly large acquisitions – it’s hard not to be mesmerized by deals such as the $1.65 billion dollar acquisition of YouTube less than two years after the company was founded, or the more recent acquisition of Instagram by Facebook for $1.1 billion dollars. As a result, investors have flocked to B2C deals: from 2006-2010, investment in B2B start-ups declined by 35% while investment in B2C start-ups tripled.

However, a coolheaded look at the broader numbers shows that B2B is most often a better investment.

The Numbers: B2B Outperformance

The facts are clear: B2B investment outcomes exceed B2C in both IPOs and M&A transactions.

Among the 2011-2012 IPOs with at least 60 days of trading history, the average B2B IPO is up over 37 percent while the average B2C IPO is negative nearly 25 percent as of 9/3/12. That is a whopping >50 point spread! And lest you think the numbers were temporarily skewed by the recent Facebook flop, the same analysis pre-Facebook still showed a >50 point spread. In the first half of the year, the average B2B IPO was up 50.4% while the average B2C IPO was down -6.5% from the original offering price.

Click here to read the full article


Forget Facebook! Meet 12 investors on the hunt for the next Microsoft

By Christina Farr
Smart investors are betting big on business technology.  Sure, all the buzz goes to consumer-focused companies like Facebook and Zynga. But while those companies’ post-IPO performance has been tepid at best, enterprise startups have been quietly kicking ass.

In 2012 alone, acquisitions in the billion-dollar range include Meraki (acquired by Cisco), Yammer (acquired by Microsoft), and Quest (acquired by Dell). In addition, SAP closed its $3.4 billion acquisition of SuccessFactors, and human resources software maker Workday held a stellar IPO.

The investors behind these and other enterprise startups are a different breed: Not as flashy and more technically savvy than the average venture capitalist. The best of them have a real shot at knocking out giant incumbents like Microsoft, SAP, and Oracle, and winning billions of dollars in revenue.

As one of them, investor Ping Li, put it, startups are winning because they are creating “Apple-like experiences for business users.” But how do you get the attention of enterprise investors? (And how do you compete with them?) You’ve got to start by knowing what makes each of them tick.

Cindy Padnos: Queen B2B

Firm: Illuminate Ventures

VentureBeat: In your experience, how is enterprise investing fundamentally different from consumer?
Cindy Padnos: B2B is less of a hits game than consumer: It’s not all or nothing. Typically, multiple enterprise companies can succeed in a single category. The success metrics are entirely different — recurring revenue growth, customer retention, and unit economics are some of the factors that matter most. For investors, it’s a confidence boost that the core technology often has an intrinsic value that can generate returns even if a market or category is slow to take off. B2B has more realistic investment terms and fewer venture investors pursuing the same deals.

VentureBeat: Can you debunk a commonly-held myth about enterprise investing?
Padnos: One myth is that it requires a great deal of capital to launch an enterprise startup. That’s simply not true. We have seen many examples of companies that bootstrapped to their first product and went on to gain dozens of paid customers, having raised less than a million dollars to do so.

VentureBeat: Do you have a thesis that you’re working with?
Padnos: Our fundamental belief is that B2B cloud-based companies offer lower risk and higher return than virtually any other category of early-stage venture tech investing. They require less capital early on, fail less frequently, and can build sustainable differentiation through their intellectual property.

VentureBeat: Do you believe that the enterprise is sexy again?
Padnos: For some of us in the B2B world, it has always been sexy! My measure of sexy from an investment perspective is how well a sector performs. All the data we’ve seen shows that enterprise investments have been outperforming consumer both in terms of mergers and acquisitions and post-IPO performance for several years. We don’t see that changing anytime soon.

The 12 Investors:
Cindy Padnos: Queen B2B Firm: Illuminate Ventures
Jim Goetz: The enterprise advocate  Firm: Sequoia Capital
Ross Fubini: Mr. Nice Guy  Firm: Canaan Partners
Zach Bogue and Matt Ocko: The power duo  Firm: Data Collective
Ann Miura Ko: The investing ninja assassin Firm: Floodgate Capital
Ping Li: The finance whiz Firm: Accel Partners
Asheem Chandna: The revenue generator Firm: Greylock Partners
Jason Pressman: The thought partner Firm: Shasta Ventures
Bob Goodman: The true believer Firm: Bessemer Venture Partners
Kevin Spain: Mr. B2B  Firm: Emergence Capital Partners
Pete Sonsini: The rising star Firm: New Enterprise Associates

Click here to read the full article




Insider's Guide to Silicon Valley's Investors

If you're raising VC funds, there's a lot you don't know. Trust me: I'm a serial entrepreneur who's been investing for a decade.

In Silicon Valley, people say that the investor-entrepreneur relationship is like a marriage, only more important. Like most jokes, there's a fair amount of truth behind it: Matchmaking mistakes between investors and entrepreneurs can have long-lasting and far-reaching consequences.

The initial pitch meeting feels a little like a first date: Each side looks for a "click" of personality. Next, in the courtship stage, everyone is on their best behavior, and little real assessment of fit takes place. The problem is that though liking each other is important, it is not enough to assure a good outcome in an investment relationship. Entrepreneurs are too often seduced by the friendliest individual investor or the biggest "name," and don't consider the long-term strategic alignment of their goals.

All savvy investors seek to put their money and other resources behind great teams to build high-growth businesses that deliver outsize returns, but different types of investors take very different approaches to achieve this objective. Variations in strategy exist between super angels, large venture firms, and micro VCs, with some firms applying hybrid models.......

Click here to read the full article




Are You Raising Too Much Money?

Why overindulging in capital can be the worst thing for your start-up's health

Which do you think is a better predictor of your company’s future? To have such a great concept that investors throw $400 million at you to bring it to life? Or to face enough skepticism that you can squeeze out just $9 million over multiple rounds of funding?

Okay, you knew it was a trick question, but the facts are pretty surprising. History shows that capital efficiency—raising no more than you need—has been a better indicator of success than capital access. Apple raised just $9 million in venture money, Cisco just $3 million. YouTube raised just $15 million in total and was acquired for $1.7 billion. WebVan, on the other hand, was the company that raised over $400 million. It was out of business within four years.

Obviously, how much capital you need depends on the type of company you are building and the stage of your company’s lifecycle. My venture capital firm focuses on high-growth companies that plan to complete globally and need outside funding to maximize growth in their early years. But it pays to be capital efficient no matter what kind of company you run, for a couple reasons.......

Click here to read the full article



Fast Forwarding Women in Tech

Few women have joined or founded startups and gained the kind of experience that enables their careers to explode like Marissa Mayer's. Here are specific recommendations on accelerating the pace of women in high-tech.

By Jack Hidary and Cindy Padnos

The announcement Monday that Yahoo (YHOO) selected Marissa Mayer as its new chief is a great signal for Silicon Valley. Marissa joined Google (GOOG) as its 20th employee back in 1999 when it was a fledgling company and had an uncertain future. Historically, few women joined or founded startups and gained the kind of experience that enabled Marissa Mayer and Sheryl Sandberg of Facebook (FB) to rise to their positions of responsibility. Yet, we are now seeing some positive signs.

Across the US, we are seeing more and more tech startups co-founded or run by women. These include: Silver Tail, One King's Lane, CloudFlare, Get Satisfaction and AllVoices on the West Coast. On the East Coast there has also been an explosion of women-led startups: Birchbox, Kollabora, iRobot, Chomp, Blip, and Hunch just to name a few.

While it is good to see this rise in the number of women entrepreneurs, it is off a small base: though women hold over one-third of the jobs in the tech space, less than 10% of venture-backed companies have women co-founders.

The environment for first-time entrepreneurs has never been more favorable. Less capital-intensive sectors such as cloud computing-based digital media, business applications and online commerce solutions are natural points of entry for first-time entrepreneurs. Access to the cloud eliminates up-front expenditures for infrastructure and development tools, creating opportunity for a wide of range of new entrepreneurs, including women, to bring their ideas and dynamism to the table.

Here are specific recommendations that we can implement to accelerate the pace of women in high-tech........

Click here to read the full article


How Cloud Computing Changes Start-up Investing

By Cindy Padnos, Illuminate Ventures

The cloud has changed almost every aspect of how software companies are built. Entrepreneurs require less capital than ever before to deliver their initial product and gain their first users – and investors are rewarded with lower early-stage risk.

In 1998, I was the founder and CEO of Vivant, a services procurement software company delivered as a service. In those days before the public cloud, the first $250,000 we raised, and maybe more, bought servers, database licenses, software development tools and other equipment we needed before we could write a single line of code or validate that customers wanted what we were building.

Ten years ago, when cloud computing was emerging, startups faced technological and business model adoption risks as they cobbled together the first open source technologies and began using new pricing and subscription models to deliver products as services. In those days, there was also greater “team risk” for investors because a startup team typically had only worked together for a short time before they were forced to seek money.

Today, cloud and open stack technologies are well established and businesses that leverage these capabilities take much less capital to build, at least in the beginning. Bootstrapping or angel-funded startups can go well beyond launching a product to actually vetting their business model and target market segments. From an investor perspective, that means that technology and product risks are somewhat mitigated and initial customer/user validation is underway........

Click here to read the full article


Rothstein Kass Institute: Women in Alternative Investments: , Second Annual Survey

“The venture capital industry has experienced significant contraction in the last decade,” said Cindy Padnos, founder and managing partner of Illuminate Ventures. “Asset flows are slowly increasing, regulatory changes, such as the JOBS Act and the exemption for venture capital funds from SEC registration, have generally been favorable to venture capital, and the fund herd has been pretty dramatically culled. The lean startup strategy, enabled by cloud computing and the continued pace of acquisitions by cash-rich corporations, are also positives. For those venture capital firms that are able to capitalize on these factors, we would expect to see strong performance. Although limited partner investment sentiment regarding the venture capital market remains somewhat subdued due to the liquidity constraints of prior years, we believe that the time for renewed optimism is upon us.”