Breen Sullivan, founder and CEO of The Fourth Floor, shares her journey from a serial startup general counsel to leader of a platform that is breaking ceilings and helping women-led startups gain access to funding and key advisors.
CCBJ: Please share a little bit of your background with us.
Breen Sullivan: My background is as a general counsel for tech startups. For two, I was the first legal hire and built out the legal functions. At the third I was the Chief Administrative Officer, CHRO and General Counsel. As a generalist for tech startups, I started to realize something: in all three companies, male colleagues were angel investing and serving on advisory and governing boards of startups (and getting promoted!) and female colleagues weren’t. When I tried to find similar ‘under-the-radar’ board and investment opportunities for myself, there was no obvious place to go. As a tech lawyer, I also knew many startups don’t take full advantage of advisory boards or fill all of their open board or observer seats, which means fewer opportunities than there need to be.
We often hear about lack of access for women to public and large company boards but we never seem to hear about lack of access for women to the less sexy, less high profile opportunities, like advisory board positions or smaller company corporate board roles, etc., that more often than not lay the foundation for the kind of networking and professional advancement (and for-profit board experience!) that women need to gain access to larger, more-sought-after opportunities down the road. Access to these ‘feeder’ board opportunities, however, are controlled almost entirely by an invisible and informal network that women typically are not a part of.
Then when I met Katrin de Haën, a serial entrepreneur, I realized women entrepreneurs face similar access issues when it comes to funding and growth opportunities, and don't always have the tools, resources or network to take advantage of the value that advisory board or independent directors could bring to their startups. It became clear that bringing these two groups of women together who don't frequently meet each other would create a mutually beneficial marketplace that could break open that monopoly.
This insight (and frustration!) led me to create The Fourth Floor to be this new kind of place where women can hack the system, initiate and advance their for-profit board careers, earn equity, and start investing. Right away, we started helping women-led startups find advisors and funding which led us to aggregate women-led startup board opportunities into a board seat exchange accessible to qualified women.
In 2021 we realized two more things: 1). We had created a marketplace for under the radar board and investment opportunities and they were slowly but surely changing the demographics of the pipeline of ‘board-ready candidates’ by getting women on to the boards and cap tables of women-led startups, and 2). It was not enough. We needed to do more.
Women need to be on boards, but they also need funding, and they need to be writing checks. So The Fourth Floor created a ‘Back Room’ for founders, women-led funds, angels and limited partners to encourage women to invest in each other and open up their boards and cap tables as a way to further level the playing field.
When you first conceived of founding The Fourth Floor, what was your general vision and how has that evolved as you've worked with more candidates, investors and founders?
Great question. At the beginning, the value proposition that we were focused on was very clear: the value that women (especially lawyers!) could bring to advisory boards and governing boards of early-stage, women-led startups and the mutual benefits that could be reaped by the exchange.
However, we always knew that we needed to do more and our mission was larger. We want to close the gender wealth and funding gap by diversifying boards and cap tables. We want to get more women on boards, more women funded and more women writing checks. So how do we transform the value creation circle we built with women founders, candidates and investors into a market solution?
We knew there was potential to drive systemic change on a much larger scale and make a dent in the gender wealth and funding gap if we could incentivize the entire business community- male-led companies included- to commit to tangible steps that would make diversity at the board level a reality and ensure a steady stream of board opportunities and qualified candidates, so that is what drove us to come up with the Pay It Forward Initiative.
Recent moves by NASDAQ (diversify or delist), the Securities and Exchange Commission and players like Goldman Sachs, not to mention the legislation in California requiring board diversity, all suggest we need an efficient, transparent ‘Market Network’ for diverse board candidates sooner rather than later. The Fourth Floor believes it can be that resource and help to accelerate the change that is already in the air.
The Fourth Floor’s Pay It Forward Initiative will spearhead this transformation by enlisting thousands of companies between now and 2025 to take a pledge to close the gender wealth and funding gap by diversifying boardrooms and cap tables. The Initiative kicked off March 29th of this year and is targeting a goal to advance for-profit board careers for 75k women by the end of 2025.
We figured out a way to incentivize companies to think differently about their boards and revolutionize how they measure DE&I: Pay It Forward Partners receive a seal (think Good Housekeeping) and credits for the number of opportunities they create (kind of like carbon off-sets). Pre-launch partners already include CCBJ, NYSERDA, PEWIN, The Innovation Space and Stella Labs, Trulieve, Bright Power, Archetype and Open Grants with many more lining up. The Initiative will officially launch in May.
Pay It Forward incentivizes all companies to ‘pull more chairs up to the table,’ bring diversity into their boardroom, and empower women executives to initiate or advance for-profit board careers all while saving money against the bottom line. Sorry for the shameless plug, but if you are a CEO, CHRO, board member or decision maker, now is the moment to not get left behind! You can take the pledge and start advancing board careers for women right now. If you are interested in nominating yourself for a lifetime Board Candidate Membership or nominating your employer to become a Pay It Forward Partner, learn more on The Fourth Floor website.
As for getting more women funded and more women writing checks, that is the mission of our ‘back room’ investment club. There are a lot of reasons why bringing together women entrepreneurs with women-led funds and accredited investor Board Candidate members just makes sense. Women-led funds need more money in their coffers, women need more access to investment opportunities, and women-led startups need funding. Because women are more likely to invest in women founders and they are more likely to invest aligned with their values, these three networks need to be connected. We have big plans for The Back Room, but fully exploring its potential will likely not happen until after the Pay It Forward Initiative is in full swing. So stay tuned!
What's your advice to women looking to gain access to board service and/or capital, and what mistakes have you seen rising stars make along the way?
Network, network, network—and understanding that one’s professional network is different from a board network. You need to go outside your comfort zone, to take risks, to meet groups of people who you wouldn't usually meet. That is a really important part of gaining access to for-profit board service and getting started in investing.
When it comes to raising capital as a woman founder, there is no easy path, but women-led funds are three times more likely to invest in women-led ventures, so networking with women who are writing checks of any kind can be extremely helpful. To the extent you can tap into differentiated networks outside of your own closed circle (especially ones that are united with a common mission or purpose connected to getting you funded or getting you on a board), it will be exponentially beneficial.
Women also tend to be more risk adverse than men. It can feel overwhelming starting a board career or an investment portfolio and it is scary! But it's incredibly important we put ourselves out there, and that we take risks. They can be smart risks, educated risks, but we need to jump in and get started. And part of being able to do that is reframing how we think of ourselves. Perfect is the enemy of good. We're never going to be perfect but we need to believe that we're good enough. There are 10 million board rooms in this country filled with imperfect men- it’s time for some imperfect women to join them at the table!
What are your membership criteria and how does the program work?
At the individual level, we accept the following categories of members:
Startup Founders: We accept women and women-identifying founders and co-founders of early-stage, scalable and growth-oriented startups, idea stage through series B. Founders qualify for a free membership if they list at least one opportunity in our board seat exchange and/or back room investment club.
Board Candidates: In order to join us as a Board Candidate Member, you must have a requisite level of professional experience, which we’ve determined to be at least 10 years, although we also look at the quality of that professional experience and the level of seniority that that person has achieved over the course of their career. You can either purchase a Board Candidate Membership directly from our platform or you can receive a life-long, free membership as a Board Candidate Nominee through our Pay It Forward Initiative. Eventually we hope to be able to offer free, life-long Board Candidate membership to all qualified women. As the number of Pay It Forward Partner companies increase, so will the pool of available nominations to give out. In the interim, we encourage all Board Candidate Members to inform their employer about the Pay It Forward Initiative.
Dream Backers: We are about to start offering a ‘Dream Backer Membership’ for women interested in being a part of The Back Room Investment Club only. This membership is for women who are interested in angel, venture and/or other kinds of investing. To qualify, women must be accredited investors.
At the company level, we accept the following categories of members:
Pay It Forward Partners: Open to all for profit companies
Greater Impact Partners: Open to innovation labs, accelerators, funds, B2B businesses, professional service provider organizations, NGOs, Communities, Government Agencies and Associations
Women-led Funds: funds that are ‘women-led’ (50% or more owned and operated by a woman).
What are some milestones that you have set for The Fourth Floor?
The largest and most important milestone is the one we gave ourselves for the pay-it-forward initiative. We hope to advance 75,000 for-profit board careers for women by the end of 2025 and to achieve that goal we need to get approximately 15-20k companies to participate in the initiative. We think we can achieve this by forming greater impact partnerships with organizations that can help connect us to hundreds and thousands of potential pay-it-forward partners and also through amplification of this initiative.
The Pay It Forward Initiative is a market solution to a social problem which we think has potential to drive more systemic change in the short term than a legislative solution. Of course we need more legislation like the laws in California and more actions like those taken by NASDAQ and the SEC, but we also need a market approach that incentivizes companies across this country to take a step back and think a little differently about their boards. If the Pay It Forward framework can help companies see some savings against their bottom line, increase diversity in their boardroom, invest in their executive women talent and earn them more business or investment dollars, then they will participate, and by participating, they will help us create new board opportunities and aggregate existing ones into a board seat exchange that will start to shift board demographics in this country.
Membership growth is another milestone and a lot of this goes hand-in-hand with the pay-it-forward initiative. If we can hit that 75,000 number, it will mean a giant influx of Board Candidate Members at The Fourth Floor. The same goes for the approximately 20,000 new board-related opportunities we have targeted for our Board Seat Exchange. So these are some very big goals.
We also plan to grow our founder and investor membership simultaneously. As our back room investment club grows, we will be able to offer more funding opportunities for women-led ventures and more investment opportunities for women hoping to take the plunge and start investing with a women-led fund or a women-led venture.
Lastly, there are our amplification and messaging milestones. We really want to get the word out there about what is achievable and why it's so important to drive systemic change when it comes to the gender wealth and funding gap in this country—and then worldwide.
On a little bit more of a personal note, we would love to know who and what has influenced you along your professional path.
I was born and raised in Alaska so I've always been a bit of an outsider, especially on the east coast, which is where I have spent much of my adult life. My atypical background and experience has helped me understand there is the way most people do things and then there are other ways to do things. There is always an outside-the-box approach, a way to make that pie bigger.
I also realized early on that you can take control of your narrative and that can get you to a different place. Also, most things are not as bad as they seem and most things are achievable if you really stay focused on that goal and you're open to rolling with the punches and taking alternative routes to get there. I also had a few interesting challenges when I was getting started professionally - I was living in Morocco when 9/11 happened and in New Orleans when Katrina hit. I ended up having an atypical entrée into the legal profession as a result. These experiences taught me flexibility and not just accepting things as they are.
I saw numerous companies where the owners and board members were all white men. You can either just accept that or you can think about it differently. Why not build an on ramp for women to get on boards immediately? Why do we have to wait?
Four or five time in my life I was forced to find an alternative route to achieve what I wanted. It was always possible then, so why can't the same thing be true here?
Published May 25, 2022.