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Carol Schleif, Chief Market Strategist at BMO Family Office, shares her thoughts on managing market volatility. Jo Ann Corkran, Co-CEO at Golden Seeds, discusses investing in early-stage women-led companies in the US.
Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.
Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Business Week, insight from the reporters and editors that bring you America's most trusted business magazine, plus global business, finance and tech news as it happens. Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio.
It is Bloomberg Business Week. That's Carol Masser. I am Tim Stenevek, and we're going to get back to talking about markets. It's enough sharks for.
You, Carol.
Are there sharks in the market.
Depends on how you defined it. Yeah, I think there are. The S and P five hundred closed hired today by half a percentage point, the Nasdaq by one point two percent. The Dow fell by two tentsive one percent, so on a whole, many equities did advance after that sell off put the S and P five hundred on the verge of a technical correction. The balance today led by tech megacaps. It got heavily hit during the market downturn. Anxiety around the impacts of President Trump's policies continue to influence sentiment. The os secuity benchmark briefly fell earlier in the session as Canada unveiled new tariffs against twenty one billion dollars of US goods. Needless to say, things are kind of all over the place right now.
Yeah, a fair amount of volatility, although the Vics definitely did back off today. Let's get to it with Carol Schlife, chief market strategist at BIMO Family Office, joining us from Madison, Wisconsin.
Are you no Minneapolis, You're in Minneapolis. You're in Madison today.
I'm in Madison, Wisconsin. Women and Wealth volunteered this evening. Well, oh love normally in Minneapolis.
Okay, good to have you here. You know, hard to keep track of everything, but I feel like things calm down a little bit. I'm curious, Carol, how you see the market environment. What do you think should be top of mind for investors With a lot of headlines coming from Washington, getting ready for a FED meeting next week, and you know, continuing to parse through the economic data like we did this morning's inflation report.
You know, it's definitely been a very difficult market to keep your head wrapped around. And the weekly piece that we write last week we titled it Breathe. I mean it was simple. We just wanted everybody to make sure that they were taking a step back looking at things, because there have been a ton of policy pivots that have been thrown at us in very short order, and well, none of them should have been a surprise. I think the fact that they were all addressed at the time with multiple policy levers has everybody taking a step back trying to figure out what's what and so in that sort of environment when you've got potential long term pluses the near term negatives. Because it's really important to remember that in Trump one point zero, we had the tax cuts first and then the tariffs, and markets did well when we had tax cuts, and they suffered when we had tariffs, and we've got the mirror opposite of that this time around, where you've got that all of the tariff in bigger, in bigger increments, more amounts, and in you know, pingponging so many ways back. All you can do is step back and rubberneck it.
Yeah, I mean, that's what a lot of people have been doing. But they've also been watching the value of their portfolios go down also in recent days, Carol, if you talk about these two sort of big things that the Trump administration has coming one of them is tax cuts, the other is tariffs that have not yet been implemented. Which one has a bigger effect on the US market.
Well, in the short run, in the market, it's hard to figure it out. And the key is is how soon do we get policy. We need to rip that band aid off, get the policy set, and then businesses can adjust, because it's important to remember we've been dealing with some form of tariff since twenty eighteen, the companies have. But you know, I was in an event a couple of weeks ago, women in Manufacturing, their senior leadership event, and talking to these women manufacturing industry asking them how their companies were adjusting, and they're just it's really tough to scenario plan when when the things change day to day. So the sooner we can have some clarity, the sooner they know what sort of what the ground rules are. It's like you showed up at the field and they decided we're playing football today instead of baseball. You know, you need to know what equipment to bring in, how to deal with it, and so once we get some clarity, but markets in the short one are really dealing with those policy pivots and some of the geopolitical pivots too that have happened.
Well, you know, I want to go Carol, what you said too earlier about its opposite where Trump did President Trump the tax cuts first and then tariffs, and now we're seeing tariffs. And now our Giena Martin Adams has brought this to our attention to that we're kind of getting the rough stuff first. But does it matter what comes first and what comes second in terms of what matters to the markets and what is lasting on the markets economy for that matter.
Too, Yeah, it does.
What's better from the economy standpoint, because it's really important to think through It took us a long time to get to the structure our economy is now, and in aggregate, Americans have benefited from globalization and that we have more goods. We're seventy percent consumption society when we were you know, fifty or sixty percent back in the eighties and nineties, and it's devastated the middle class. And if we want to change that and rebuild that infrastructure, it is going to take time. It's not going to happen seamlessly, and it's going to be rocky to get there. And we collectively are going to have to decide that we're going to buy a little less, pay a little more, but rebuild our middle class. That takes some time to get there. And the interesting thing is is once the policy is set, companies will be able to do it because we have an environment here that's very conducive to doing business. You've also got a whole bunch of pent up m and a activity. You've got expansion activity that wants to happen, but it can't happen until there's some sort of policy clarity out there. The other impact of this, too is to the effect that growth slows for a bit in the interim. If we bring those interest rates stone, particularly tenure rates stone, you have a chance to take some of the pressure off the housing market and hopefully get some things moving there too. So it just the hardest part for markets. Our markets want it. While they say they're discounting mechanisms and want to look forward, when there's a whole bit that worry closet is open. The concern is the end of day, Carol.
You know, politicians say a lot and what they end up enacting is a lot different in many cases than what they talk about on the campaign.
Trail.
But it does sound like you think that President Trump will be successful in his attempt to rebuild the middle class here in the US. That's what it sounds like I'm hearing from you.
I think the potential is there. It depends on how we execute, because the other factor that's going on here is not just you can't just build the plants, and it depends on how you encourage that infrastructure. We have to create an environment. In my mind, we have to create an environment that invites people to want to do business here and not beats them up to do business here. And we also have to make sure that we have the intellectual capital to do it. And so we have to be a little more careful. I think about some of the doche cuts that are coming down, because we're devastating ranks of scientific exploration, lots of different things that are going on there, and you run the risk of doing almost irreparable harm there. So I think the execution is going to be critical to watch and how we do it. I have full faith in our companies to execute the execute.
Three.
I think the broader issue is can we put the infrastructure around them?
All?
Right?
We've got to run Carol Thank you so much. Carol's Life, chief market strategist at Beimo Family Office joining us.
All right, top of mind for us right now.
We want to talk a little bit about what's going on when it comes to the VC environment, and in particular when it comes to women led businesses. Last year, companies that were founded by women and did not have a male co founder received only one percent of all venture capital funding. This is according to Pitchbook data cited earlier this month. And that's this is what they do. They keep track of all this stuff.
Yeah, I've read about this in inc and that report and Ink also noted that angel investing in female founded companies decreased last year, So it wasn't just venture capital, it was also angel funding. And you got to wonder what's the path forward.
Right, which is the early stage funding? All right, So we're curious to see what Joeanne Corcoran has to say. She's co CEO and managing partner at Golden Seeds. Golden Seeds, by the way, has invested over one hundred and eight million dollars in two hundred and sixty women led companies that have then eventually gone on to raise over two point two billion, she joins us from New York.
Back with us. It's been about a year or so, I think, Joanne, how are you.
I'm great, Thank you, Carol. I appreciate being invited back.
Well, it's nice to have you back with Tim and me.
You know, it seems like the number, as Tim mentioned, when it comes to angel investing, which is really important, right, that's the early stage, really really early stage, was down last year. And even if we look at you know, all VC funding, the numbers are still so low. First of all, big picture, why is it still so difficult. Is it that there aren't the women led businesses to invest in or is it just not the capital with interest in investing in what's out there?
Well, there's really a dichotomy between VC and angel capital. So let's start with angel capital. You know, directionally, it's been pretty good for the last ten or fifteen years in the angel markets. And you can stop me if I need to talk about the scope of the angel market. But so more than thirty percent of capital went to women founders, almost forty percent to gender diverse founders. That's up from three to five percent twenty years ago. More importantly, in the angel markets, the yield. That's the percentage of companies that are seeking funding that get funding that's now pretty comparable between all male teams and female and gender mixed teams, So something like twenty five percent.
That I saw that in the pitch book reports. So if you have so basically, if there's like a man on the team, you're you know, so much more likely to get that funding.
Well, it could be that. But here's the other thing is most teams, the way people work these days is it's diverse. There's men and women on a team. So when you start looking at only female teams, you're really sort of shrink in the universe. So I wouldn't do that. And why is it better an angel Land? Well, the reason I leave us better in angel Land because the people who are making the decision about where to put the money are themselves more diverse. Okay, there's different studies that say that. You know, there's something like four hundred thousand people in the US who are angel investors, people who are investing directly in startup companies, and over the last you know, twenty years, that's gone from five percent women to over thirty five percent women. So diverse people making the decisions also tends to generate diversity in how the money is put out, and you know, even the venture markets are slower to evolve. Don't get me wrong, but there's bad news there. That all female team number is awful. Actually went down last year, and even the mixed team number if you take out open AI that was went down a little bit. But it's still something like, you know, twenty six twenty eight percent, and that's well up from the seven percent that it was in two thousand and eight. So yeah, there's work to do there, don't don't get me wrong, but it's not as bleak as the headlines.
Why.
Okay, all right, so give us the green shoots, the optimism, the silver lining, because it felt pretty pretty much like a bummer, I know.
I mean, I had so many people calling me with this women only got two percent of funding. But it's not quite that bad. So can we just talk a little bit about, you know, what's happening so far in twenty twenty five.
Yeah, let's do it, okay.
So you know, we had the crazy run up in twenty one and twenty two and then a little bit of a crash over exuberance, I would say, coming out of the market. Twenty four was a tiny bit better than twenty three, still a long way from the numbers we saw in the run up, but a little bit better. And twenty five really started out pretty strong. In fact, at Golden Seeds, and we're a pretty good measure, Carolyn tim because we are one of the largest and most active groups in the US, so we're probably typical about what's going on. Our investors. Just in January and February they invested forty percent the amount of dollars that they invested in all of twenty twenty four, and so you.
Know why was that.
Well, the economy and public markets up until the last couple of weeks looked pretty strong. M and A, although still quite low, did pick up a little bit in twenty twenty four, and as you guys know, there were lots of stories in the financial press predicting a reopening in the IPO markets. Investment terms at our stage in the market are incredibly favorable to investors, not just value its right, but so protective provisions and governance are really great. And at Golden Seeds we started to see the market really loosen up because we already had two liquidity events in January and February, and they were pretty big. They returned more than fifteen percent of all the investments that Golden Seeds has made since the group started.
Well, so do you think do you think this is you mentioned you know that everybody thinks, well, I don't want to say everybody, but as you alluded to, many people thought there would be deal activity, IPOs M and a happening this year. Do you think do you think that's actually going to happen? And do you think that, like, what are your thoughts about the investment environment for seed investing and for startups during this administration?
Okay, so obviously the the last few weeks have raised some concerns, not just you know about you know, talk of the edges about recession and public markets declining a little bit. But another thing that's happened is this, uh sort of a concern about what's happening with government budgets and what's happening with grant funding. Because so many early stage companies are dependent on you know, they'll pick an industry that they're working on, and now suddenly if you start changing the budgets in that industry sort of you know, uh, an ex Diasec Mackina. Then they're going to have to pivot and rethink just what they can do. So I think there's a little bit of uncertainty that's injected there and we're going to have to follow it carefully to see what happens. But as I said, at the front end of the market, we don't have the problem that late stage VC does. Late state VC's got so much stuff on the balance sheets it has to work through. We don't have that.
Well, that's good, that's an optimism certainly, Joanne, thank you so much. Really appreciated. Joan Corcord. She's co CEO managing partner at Golden Seeds. As we mentioned, they've invested over one hundred and eighty eight million dollars in two hundred and sixty women led companies and then have ultimately gone on to raise over two point two billion off of that
