Run Your Own Race, With Cate Luzio

Summary

Podcast Summary: From the Ground Up – Episode: Run Your Own Race, With Cate Luzio

Podcast Information:

• Title: From the Ground Up
• Host/Author: Inc. Magazine
• Description: Hosted by Inc. Executive Editor Diana Ransom and Editor-at-Large Christine Lagorio-Chafkin, From the Ground Up delves into unfiltered conversations with successful founders, exploring the challenges and secrets of entrepreneurship.
• Episode: Run Your Own Race, With Cate Luzio
• Release Date: March 24, 2025

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Introduction and Context

In the episode titled "Run Your Own Race", Diana Ransom and Christine Lagorio-Chafkin conclude their Female Founders series with a special roundtable featuring Cate Luzio, the founder and CEO of Luminary. The discussion centers around the burgeoning landscape for female entrepreneurs, the unique challenges they face, and the strategies they employ to build and sustain successful businesses.

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Current State of Female Entrepreneurship

Cate Luzio opens the conversation by highlighting a significant trend:

"We are seeing more women leave the workforce to start their own companies than ever before." [00:47]

This surge, surpassing even the post-pandemic spike, is evident through both anecdotal experiences at Luminary and supportive statistics. Diana Ransom references a Wells Fargo report indicating that between 2019 and 2023, women have been starting businesses at twice the rate of their male counterparts, with women of color leading at an even faster pace.

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Evolving Definitions: Entrepreneur vs. Business Owner

The panel delves into the nuanced distinction between "founders" or "entrepreneurs" and traditional "business owners." Kate Luzio points out:

"The word founder entrepreneur is still a word that doesn't resonate with all small business owners." [01:57]

Many seasoned business owners, such as those running law or accounting firms for decades, initially identified merely as business owners. However, there's a growing recognition and adoption of the "founder" and "entrepreneur" labels among these established operators, reflecting a broader and more dynamic understanding of entrepreneurship.

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Scaling and Revenue Growth for Female-led Businesses

The conversation shifts to revenue growth, with Kate Luzio emphasizing:

"Women are not just starting lifestyle businesses or have hobbies. These are real businesses generatig revenue." [05:24]

Supporting this, a report from the Global Entrepreneurship Monitor, as cited by Diana Ransom, reveals that women now account for one in three high-growth entrepreneurs across 30 countries. This indicates that female-led businesses are not only launching at unprecedented rates but are also scaling effectively, often transitioning from solopreneurs to mid-sized enterprises.

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Funding Challenges and Alternatives

A significant portion of the discussion addresses the funding disparities faced by female founders:

• VC Funding Gap: Women-led companies receive approximately 2% of venture capital funding, and this figure plummets to 0.35% for Black women-led enterprises. Interestingly, teams with both female and male co-founders see a slight increase to 22% in VC funding exposure.

Diana Ransom underscores the severity:

"Women led Companies get around 2% of VC funding. Black women led companies get 0.35%." [10:03]

Kate Luzio elaborates on the shifting VC landscape, noting a focus on profitability over mere growth. She argues that the traditional "growth at all costs" mentality is waning, with investors now prioritizing sustainable business models.

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The Importance of Financial Planning

Effective financial management emerges as a critical theme. Kate Luzio advises:

"You have to have a fully fledged out financial plan." [07:25]

This includes setting realistic revenue goals, understanding customer retention rates, and delineating clear strategies to achieve financial milestones. Diana Ransom adds that transparency with stakeholders, including spouses, is essential for aligning personal and business ambitions.

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Bootstrapping as a Strategy

Kate Luzio champions bootstrapping, highlighting its prevalence among female entrepreneurs:

"Over 70% of business owners, not just women, bootstrap." [20:09]

Women often resort to bootstrapping out of necessity—to maintain control and avoid external dependencies. Kate Luzio shares her personal journey with Luminary, emphasizing the benefits of self-funding:

"Luminary has never put in a dollar of additional capital since the first round. The business funds itself. We're a sustainable and profitable business." [21:04]

This approach fosters autonomy, allows for flexible decision-making, and ensures that the business remains aligned with the founder's vision.

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Case Studies and Standouts from Inc. 500 Women

The episode also highlights notable companies from the Inc. 500 Women list, showcasing the diversity and innovation among female-led businesses:

• LTK (formerly RewardStyle): Founded by Amber Benz Vox, LTK has evolved significantly over 15 years, adapting to new social platforms and maintaining a competitive edge.

• Frida Baby: Led by Chelsea Hirshhorn, Frida Baby has expanded its product line to support postpartum women, addressing a crucial gap in the market.

• Berardi Immigration: A law firm specializing in aiding immigrants, founded by Berardi, which is poised for substantial growth in response to global migration trends.

• BE Leaf Medical: Focusing on cannabis industry funding, BE Leaf Medical exemplifies the intersection of emerging markets and female entrepreneurship.

Kate Luzio expresses admiration for these companies:

"It's hugely moving. You see her be her." [37:18]

These examples illustrate how female founders are not only thriving in traditional sectors but are also making significant inroads into male-dominated industries like tech and finance.

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Conclusion and Takeaways

The episode culminates with a reinforcement of the resilience and ingenuity of female entrepreneurs. Kate Luzio reflects on the importance of maintaining control and the fulfillment derived from building businesses on one's own terms. Diana Ransom emphasizes the role of representation and mentorship in inspiring the next generation of female founders.

"There's nothing that can hold us back outside of access to capital. Nothing that can hold us back that we can't overcome." [28:26]

The dialogue between Diana, Christine, and Kate Luzio encapsulates a powerful message: female entrepreneurship is on the rise, fueled by determination, strategic financial planning, and a commitment to community and sustainability. As female founders continue to break barriers and redefine success metrics, the entrepreneurial landscape becomes richer and more inclusive for all.

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Notable Quotes:

• Kate Luzio: "Women are taking the biggest risk of our lives by becoming entrepreneurs." [28:02]
• Diana Ransom: "We have to pay it forward. Representation matters." [37:15]
• Kate Luzio: "Keep your business yours for as long as you possibly can." [22:30]

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This comprehensive discussion offers invaluable insights for aspiring and established female entrepreneurs, highlighting both the challenges and the myriad opportunities within the current business environment.

Transcript

[Diana Ransom]

I'm Inc. Executive Editor Diana Ransom.

[Christine Ligorio Chavkin]

And I'm Editor at large Christine Ligorio Chavkin. This is from the ground up, today's episode, 500 Women.

[Diana Ransom]

For today's episode, we're going to have a special roundtable discussion to wrap up our Female Founders series. And joining us is our special co host, Luminary founder and CEO Kate Luzio.

[Kate Luzio]

Always great to see both of you.

[Diana Ransom]

Christine, Diana, Luminary, it's an education and networking community for women, and I guess it's for women and men and allies. Absolutely. Okay. Okay. So was hoping to get sort of like a level set from you, like, what is sort of the state of female founders and entrepreneurs in general?

[Kate Luzio]

Well, I've been doing this now for six years after a very long career in finance, and we are seeing more women leave the workforce to start their own companies than ever before. And I thought that number would have sort of topped out or at. During the pandemic. But today, even what we're seeing at Luminary is the amount of women that are starting companies is astronomical in a positive way.

[Diana Ransom]

And the numbers actually bear that out, too. So you're seeing it anecdotally, but it's also like, the numbers are there.

[Kate Luzio]

Absolutely.

[Diana Ransom]

So 2 million women left the workforce during COVID That's the estimate. And it turns out that a lot of them ended up starting their own companies. So we saw one in the package. There's an essay that Issy Lipowski wrote for us, and she cited a survey or a report from Wells Fargo that showcased that the number of women who are starting businesses, they're starting businesses at twice the rate of their male counterparts. And that's between the years of 2019 and 2023. So it's pretty dynamic. And the numbers are there, and you're seeing it too. So this is pretty. It's pretty cool.

[Kate Luzio]

And women of color, even faster.

[Diana Ransom]

Oh, right, right.

[Kate Luzio]

And I also think the word founder entrepreneur is still a word that doesn't resonate with all small business owners.

[Diana Ransom]

Oh, really?

[Kate Luzio]

Yeah.

[Diana Ransom]

I feel like I say it maybe.

[Kate Luzio]

A thousand times a day, but if you think of a business owner that's been around and running their agency or law firm or accounting firm or search firm for 15, 20 years, founder entrepreneur wasn't the word they used when they started it. It was, I'm a business owner. And so I see also a wave of women that have been business owners for a long time that are now starting to go, wait, oh, I am a founder, I am an entrepreneur, but I'm Also identify as a business owner. And so I think some of those numbers don't even tell the whole story because so many more women are saying, well, yeah, I am a founder. I've led this business for 20 years.

[Diana Ransom]

Right. Or they're not saying they're a business owner, they say they're a. But they have their own legal practice.

[Kate Luzio]

Exactly, exactly.

[Diana Ransom]

That's really interesting.

[Kate Luzio]

Or solopreneurs.

[Diana Ransom]

Oh, yeah, right.

[Christine Ligorio Chavkin]

I mean, let's talk about the whole new wave of people who call themselves content creators. Right. I mean, their accountant is filing them as a solo small business. Right.

[Kate Luzio]

I mean, you are 100% content creators. Freelancers, by the way, athletes that are now building their own brands. They are entrepreneurs. These college athletes that are now able to be paid for name, image, likeness, they are now entrepreneurs. All of the influencers, they are now entrepreneurs. Everyone on YouTube can be considered an entrepreneur. So we've got to widen that category. And if you look at Christine, to your point around content creators, there's more women than men. And so we've got to make sure we're training them and developing them to think more like entrepreneurs.

[Diana Ransom]

And you do that by helping them scale the idea or scale content.

[Kate Luzio]

Scale content.

[Diana Ransom]

Like, how do you become an entrepreneur? Like, when does one become an entrepreneur?

[Kate Luzio]

When they one have their name on the door. And I use that as sort of an anecdote. But they have started a legal business. They're not just getting paid into their personal account.

[Diana Ransom]

Yeah, I feel like.

[Christine Ligorio Chavkin]

Yeah, I thought that was a very philosophical question, Diana. How does one become. Is it the light bulb moment?

[Diana Ransom]

Let me try to explain that question a little bit. So I have an S corp that I run with my husband and we have like rental property. Right. But I don't consider myself an entrepreneur, even though probably technically I am.

[Christine Ligorio Chavkin]

Yeah, you brought a little business. Yeah, absolutely.

[Kate Luzio]

You are a business owner. You and your husband are co founders.

[Christine Ligorio Chavkin]

We are co founders.

[Kate Luzio]

And you own a business. You're entrepreneur. I should just say that in addition to your day job.

[Diana Ransom]

Yeah.

[Kate Luzio]

That's your side hustle.

[Diana Ransom]

Well, okay, so maybe I should just own it and kind of accept it and figure out how to scale my business.

[Kate Luzio]

That's good. You need a business plan.

[Diana Ransom]

I need to talk to Kate Luzio more. But okay, so women, they're starting businesses in record number, but they're also growing their revenue in pretty outsized way. So there's this one report from the Global Entrepreneurship Monitor out of the folks at Babson, they report that women now represent one in three high growth entrepreneurs. Across 30 countries. So high growth showcases that these are companies that are not just solopreneurs. They're not necessarily solopreneurs. They're more likely to hire, they're more likely to scale and become potentially mid sized businesses one day. We're seeing a lot of optimism. What does that showcase for you?

[Kate Luzio]

I think there's optimism. I think it still comes down to the brass tacks of running a business. Long gone are the days of throwing up ads on Instagram and that's going to build a business. I think that it shows, yes, that I think women are not just starting lifestyle businesses or have hobbies. That's what someone told me six years ago when I started Luminary. Is this your hobby? I said, no, this is nice to hear. It's not a hobby when I put, you know, x what I did for capital into my business. But I think that women are sort of putting a line in the sand and saying, no, these aren't hobbies, these are real businesses. They're generating revenue. We had a question yesterday at Luminary at an event and she said, I'm now generating more money as a solopreneur for my household than my husband. And it's a difficult conversation just to make sure he understands that this is a real business. Well, I said, it's a real business. You're generating more revenue than he is for the household. But sit down with him and show him the business plan. What's it gonna look like in a year? What's it gonna look like in three years? And she's like, I've never done that. And so I think part of it is educating ourselves that we can do this. You still have. One of the statistics that I often use with our community is 88% of women business owners don't generate over six figures in revenue. And revenue, that's not even what they take home. Right. That's just revenue. I often say you've got to have three focused on your numbers, which is, yes, of course, your revenue, what you're paying yourself and what you get to take home and then what you get to put back into the business every year.

[Diana Ransom]

Is there like a good rule of thumb on what should be what or what?

[Kate Luzio]

No, but you really have to have a fully fledged out financial plan. Right. And a lot of times I do think that founders have this grand idea that we want to be the next unicorn, which is amazing to have that as an aspiration. But if you still don't know your own number, it's really hard to get there, you got to have goals.

[Diana Ransom]

Right.

[Kate Luzio]

And how are you going to get those goals? If it's number of customers, if it's revenue, if it's what I want to bring home every year as that owner, how many customers do I want to retain? I think so much of this comes down to the numbers and numbers not just in that revenue number.

[Diana Ransom]

Right. But it has to be sort of a realistic.

[Kate Luzio]

Absolutely.

[Diana Ransom]

Right.

[Kate Luzio]

Yeah.

[Diana Ransom]

Just going like, oh, I think I'm going to take home $400,000 next year.

[Kate Luzio]

But if that's what you want to take home, how do you get there?

[Diana Ransom]

Sure, I do. I do want to.

[Kate Luzio]

There you go.

[Diana Ransom]

Show me how.

[Kate Luzio]

Show you how exactly how is the business going to generate that so that you can take that home? And I think oftentimes when we start businesses and what we every day at Luminary is there are great ideas, there are also great products and services, but mapping that out and how to get to that number is missing.

[Diana Ransom]

Yeah. I like how you also had the conversation with the person, the founder who is having the conversation at home with her spouse and explaining to the spouse what mapping out the plan and how it actually helps the relationship.

[Kate Luzio]

Absolutely.

[Diana Ransom]

I feel like that could be a whole podcast. How to have a business and relationship at the same time.

[Christine Ligorio Chavkin]

Absolutely. And I mean, I do think it's worth noting that Kate, you know, you are operating in the center of New York City and you know, yet some of the business owners here are still struggling with the same kind of growth concepts that everyone all over the US and probably all over the world is struggling with, especially first time founders. I'm curious if the kind of questions that people come to you with have changed or have taken on a different tone in recent years.

[Kate Luzio]

I would say over the last, let's call it two to three years, less people focused on, I have to fundraise for the business or they are expanding the aperture around what funding actually can look like. So we and you all are part of the media. I think the media has done a really great job at talking about VC and unicorns and growing your business. But when you look at the amount of companies that really should take on or are even the sort of type of businesses that would be able to take on vc. It's so small and so peeling back sort of this, okay, my vision was I'm going to raise millions of dollars to finding out I've gotten 250 no's when probably if you had started and said, are these the kind of investors that I actually should be pitching the reality is probably not. And so what other funding exists? And we spend a lot of time talking about all kinds of funding in addition to Bootstra or as women, we like to say stiletto strapping. Because it's harder.

[Diana Ransom]

Because it's harder. Yeah, I love that. We're definitely going to talk about bootstrapping and I think it's obviously very important, especially for the discussion around female founders. But I would like to touch on venture capital for a bit and we mentioned it in our package. Just sort of, the climate seems to be worsening. You know, just a couple of stats. Women led Companies get around 2% of VC funding. Black women led companies get 0.35%. I mean that's just, that's just gut wrenching. You know, the numbers tick up a little bit higher. If it's a female founded business but also has a male co founder, the numbers go up to like, I want to say 22%. So that's like a little bit positive. Not in this package, but in a prior issue we ran a story about Stacey Brown Philpott who is basically, you know, a dynamic board member across, you know, different boards. And she's launching a company called Cherry Rock Capital which will be focused on investing in diverse founder led companies. So there is cause for optimism. So if she's seeing a reason for existing.

[Kate Luzio]

Oh absolutely.

[Diana Ransom]

And for supporting, you know, founders of color, that's really positive. So I wondered if you could just kind of give us a sense for what you're seeing and what makes sense in the world of VC right now.

[Kate Luzio]

One, yes, we need more capital within the venture realm to go to women and women of color and diverse founders. That's full stop. It can't stay at 2% and zero point. It's less than last year. I think it was 0.05 for black women founders. Now that's even less. Right. But at the end of the day, I think investors, and rightly so, are more focused now on profitability than just growth. Right. Because this whole idea of growth at all costs, that's how they measured success. How much can you do of 10x growth? I think we've learned that there are very few companies that are going to ever fit there also even if they hit those numbers, is that sustainable? So I think there's been sort of a come back down to earth and say there will be certain companies that are going to sit within venture tech, SaaS, high growth tech, right. That are health tech, femtech, everything that requires sort of that where it's not manufacturing of products. Right. Apparel. I've heard so many founders come to me and say, I'm building this amazing company. That's shirts. That's not what a VC is looking to invest in.

[Diana Ransom]

But those still have opportunities to produce exponential growth. Sure.

[Kate Luzio]

But differently and I think much slower than tech companies. That's why venture started. If you look back at when venture started, it was for tech companies. So we've lost a little bit, I think, of our way around that. Everybody's going to go out and look at venture. I have seen companies though evolve or pivot their businesses that started as companies that wouldn't be a target for venture. That took a lot of feedback and information and evolved their model to where now they are in that realm of venture. But then you have lots of companies that are like, you know what, I don't want to sit in a room for the next year pitching and getting a million no's so then not be able to launch my business. I want to build my business. And so what other methods of funding are out there? And so we spend a lot of time educating.

[Diana Ransom]

So what do you suggest? Like what are the other ones off the top of your head, things you suggest often to fund?

[Kate Luzio]

Well, as a former banker, get a loan.

[Christine Ligorio Chavkin]

Well, no, go to the bank.

[Kate Luzio]

Go to the bank, but just start talking to your banker. Yeah. If you are just starting your company today, you're not going to walk in and get a loan tomorrow. That's. It's a, it's like a marriage with a bank. Right. Especially with a banker. You've got to build a relationship. They've got to get to know you.

[Diana Ransom]

Well, don't you need two years of track record?

[Kate Luzio]

You can one with some of the bigger banks and the regional banks. But we have in this great country of ours, CDFIs, Community Development Financial institutions that are in communities, in cities, they are small banks and they are mandated by law to provide loans to small business. And so whether that's backed by some of the larger financial institutions or the sba. So having that conversation with your banker and if it's a big bank and they say, listen, we can't lend to you for at least two years because you don't have financial statements. Great. The next question to your banker should be, can you introduce me to your partner that is a community development financial institution. They all have them. But these are the questions that you've got to ask these bankers and then what do they need in order to think of you as a good opportunity to lend? The other thing is, if you are. You've still got opportunities. Like my grandfather built his pharmacy, you know, 100 years ago. Friends and family, not everybody has access to that. But there are ways to think about funding. You've got, obviously, angel investing. There are lots of now communities that just look at angel investing, spv, special purpose vehicles where you're taking lots of small checks for one larger investment, you can go. And I've seen this work for a lot of women founders. Crowdfunds.

[Diana Ransom]

Yeah, I was gonna say there was. I remember there being like initial coin offerings. Do you remember this?

[Christine Ligorio Chavkin]

Oh, yeah. Oh, yeah. But no, I have seen an uptick in crowdfunding even from, you know, established businesses saying, like, hey, let's do around, let's get things accelerated a little bit again. Right now there's so much awareness in terms of community organizations helping one another that I think businesses are starting to get in on that in a renewed way, even for just kind of a pick me up round of funding.

[Diana Ransom]

Yeah. I think there used to be kind of this quality of when businesses would do that, that people would look at it like a little bit like, you're not supposed to be doing this. You have other mechanisms for raising funding. But maybe, maybe the perspective around that has changed. Like people are a little bit more open to it now.

[Kate Luzio]

Well, I think also.

[Christine Ligorio Chavkin]

Yeah, I think so too. I think with friends and family also, you don't need to view it as like, I'm taking my uncle's charity here. You have to think of it as, I'm getting my uncle in on an opportunity that like this could. If I'm gonna let a banker or an investor grow their money using me as a vehicle, I should let my family in on this too, right?

[Kate Luzio]

Absolutely, absolutely. And it doesn't ever hurt to ask. Right. But you've gotta have. I always say you have to have your pitch. Right. You know, what's it for, how is it gonna be used and when am I gonna get my money back? Yeah.

[Christine Ligorio Chavkin]

And what are the risks? Right, exactly. There are risks involved, sure. Certainly.

[Kate Luzio]

But on the crowdfund, I think the other thing that I've seen, certainly anecdotally with our community at Luminary, is people are also using it to get their community engaged.

[Christine Ligorio Chavkin]

Yeah.

[Diana Ransom]

Oh, right.

[Kate Luzio]

Yeah, right. It's not just about, I'm raising money. Absolutely. That's a goal. But it's also, let's get our community engaged and let's market our business. These crowdfunding platforms have huge amplification and reach. And so one may have 250,000 on a newsletter. Imagine your company who's crowdfunding on that platform goes into that newsletter that you don't have today. Eyeballs that may see something even if they don't actually fund. They're also getting to see you as a company. They may go to your website, they may go to your Instagram. And so I mean, by the way, did you guys know that icrowdfunded?

[Diana Ransom]

No. No, we did not know.

[Kate Luzio]

When I started Luminary, I got introduced to ifund women and I was like, but I'm not raising any money because I'm using my own capital. And one of the great things that the founder and CEO of iFone Women said, Karen Khan, she said, but we have this great platform. Nobody knows you. And a light bulb went off in my head. Wow, nobody knows me. That's true. If I could use this platform and their distribution list and their email marketing to amplify who Luminary was and use the rewards based tool, not only do I market the business, it brings awareness and education about who we are. And I could start the business literally physically open our doors in New York. And we started, we raised 367,000 on that platform. And those were my first members. Luminary.

[Diana Ransom]

Yeah.

[Kate Luzio]

Because they build your community. Yeah, exactly.

[Diana Ransom]

Yeah, yeah, yeah. I think of it too, is this is going to be a little like journalistic nerdy here, but I think of it as somewhat like akin to outlining an article. I mean. Okay, stay with me. So what it gets you to do as a business owner is to like really think out your business. You have to think about like how your market distribution. You have to think about like, what does the consumer want out of this? Out of my offering? What does the consumer want for my product? You get to test it out, of course. But you really like what it makes you do. Just like an outline is it makes you really think it all through before it actually feels real.

[Kate Luzio]

100%. It actually helps you. If you haven't built a business plan, it helps you build your business plan, it helps you build that roadmap. And I think it also gets you focused on financial goals that you probably weren't thinking about beforehand and then how you're going to deploy that capital. Because no matter where you raise money from, even it's from your own pocket, you have to know where you're going to put that money.

[Diana Ransom]

Right.

[Kate Luzio]

And what's the return on it?

[Diana Ransom]

$300,000. You're gonna figure out. You need to know what to do with that.

[Kate Luzio]

Yes.

[Diana Ransom]

So the difficult Problem to have.

[Kate Luzio]

We were already generating revenue before we even opened our doors because those were memberships and those were founding members of Luminary.

[Diana Ransom]

Sounds like a win win. So there was also, I think we talked about friends and family, but there's also bootstrapping. Right? Like so you start, you start generating revenue and you put money back into the business and this is bootstrapping. Women are really good at this. I mean, Kate, can you explain why women are potentially really good at this?

[Kate Luzio]

So one, I think if you look at the numbers and they could be a little bit old on statistics. I think it's about over 70% right. Of business owners, not just women, but bootstrap. Women do it for two reasons. One, they want to have control of their own destiny to that's out of necessity, right? I don't have friends and family that I can tap into. I'm not a business or I can't raise venture. I don't want to do a crowdfund. By the way, crowdfund is like a whole full time job when you're doing it as well. So it's a lot of work. So that bootstrapping becomes out of necessity. But also I think because I want to have control of my own destiny. I mean that is why we bootstrapped. Everyone told me, go raise money, don't take this huge risk and build your business on your own dollars. One, as a woman that was building a community for women and allies, I wanted to put my money where my mouth was. That's number one. Two, I didn't want to wait around until I proved my model. I knew my model was going to work. And three, I really wanted to be able to take in feedback from the customer at all times because at the end of the day, that's why we're there. So we call our customers members. And so if I had an investor kind of telling me what I could and couldn't do, by the way, I would never have made it out of the pandemic alive. Absolutely no way. We couldn't have acquired three companies that we've already acquired. Right? There's the things that you can do when you have control of your own destiny and you utilize your own money. People tell me and say, oh Kate, you're self funding. I said wait, let's back up. I self funded. So Luminary has never put in a dollar of additional capital since the first round. The business funds itself. We're a sustainable and profitable business. And so if you have metrics that can get you to that point, not only can you generate return for yourself as the shareholder, you can generate revenue to put back into the business to hire more. If that's your goal, to launch more products, to do more businesses.

[Christine Ligorio Chavkin]

Yeah. I think there's this weird stereotype that women are risk averse and therefore don't even seek venture capital.

[Diana Ransom]

Right.

[Christine Ligorio Chavkin]

But like really women are excel at that emotional connection with a group, like a larger group of people and being like building a sustainable relationship with them. Right. Fulfilling a promise over time to customers and that growth then comes with it.

[Kate Luzio]

In year one of Luminary. So actually it was January of 2020 and we had Diane von Furstenberg come and speak at Luminary with her then CEO Sandra Campos. And Diane walked into Luminary, our physical location. So this is before digital. Right. Because of the pandemic, hadn't happened. And she said to me, my one piece of advice to you is to keep your business yours for as long as you possibly can. Call the shots and make sure you're doing it. You're building the business for the right reasons. And I'll never forget that because she has literally built, sold, sold. Buyback. I think she's on her third buyback of the Diane von Furstenberg business in whatever many years. And so that's resonated with me around that. Just this idea of calling our own shots. By the way, that doesn't mean we'll never look to raise money.

[Diana Ransom]

Yeah, yeah. Well, you proved that person wrong. I mean, is there something to be said for changing how we measure success? I mean, I understand money looking at money. So we have funding, we have revenue. Obviously money is power in this day and age. But should we be considering. I mean, especially when you think about how female founded businesses don't actually get that much venture funding. Should we really be holding them to this same standard or should we look at other metrics?

[Kate Luzio]

So I think that revenue and growth is just one metric. Just like raising money is one metric. Right. And raising money could be venture. It could be I got a line of credit. It could be I did a crowdfund. I think the other thing is you've got to go back again down to the sort of foundation of a business. How many customers do you have? What's your retention like? Did you. Or when will you break even? And then when do you become profitable? And what does that look on a quarter by quarter basis? How do you use the funds that you're generating in the business? Are you putting it back into the business? Are you putting that back into you as the founder, are you building the right culture? Do you have the right staff? So I look at all of those as what we call our KPIs, not just that one number around revenue.

[Diana Ransom]

Yeah, yeah. And maybe there's a way to kind of look at dollar efficiency. Like, if there's a way to kind of think about how a dollar in a female founder's hands might be potentially 10 times more efficient than in, like, a male counterpart's hands.

[Kate Luzio]

Probably a great study.

[Christine Ligorio Chavkin]

Oh, I love that, Diana. Yeah, that's great.

[Kate Luzio]

Love it. Yeah, we should do that.

[Christine Ligorio Chavkin]

We should. That's fantastic. I mean, I do think culturally, the way we perceive that measure of success. Right. You still hear these numbers, oh, there's valuation at a billion dollars. I just don't think people care as much anymore. Like, I don't hear that kind of buzz, like riding the New York City subway that I did even like four or five years ago of young people saying, oh, I'm working to start a value at X. You know, that that raise of money has been. I think people are starting to even casually see it as, wow, when I make a partnership with a VC firm, I'm adopting that VC firm's business model too. Not just my own business model, their model of grow 10x in x amount of time. Right. And that has shown not to lead to great things for so, so many businesses that grow just too fast.

[Kate Luzio]

No matter where you take money from Venture. Your uncle Christine, tee ur analogy earlier. There are always strings attached.

[Diana Ransom]

Right.

[Kate Luzio]

And you've got to understand what those strings are. And so I also think when you look at women and women of color, and I can use this again, anecdotally, just from the past six years, there is also this. I don't want to take on debt. And so I do think that also leads to someone thinking about, I'm just going to bootstrap because I don't want to take on debt. I don't want to be out the service to others. I want to control my own destiny. And so.

[Diana Ransom]

Well, you're taking on debt. You're not necessarily, you know, taking on what we're talking about with venture capital. They're not telling you how to run the business necessarily. Right. Who, the lender?

[Kate Luzio]

Well, the lender's gonna look at you probably even more. Right. Because they have a date and time when you've got to pay that money back.

[Diana Ransom]

So the idea is like, these people don't want to be beholden to anybody. Okay.

[Kate Luzio]

Yeah, yeah. And we saw that. My prime example was during the pandemic, when the paycheck protection program came out and obviously hundreds of billions of dollars went out to small businesses, right or wrong. And then the Eidl loan, which was the economic impact disaster loan through the SBA, which was not forgiven, which was a 30 year.

[Diana Ransom]

Well, it's 1% interest, 3.5%. No, it was 1% for a while.

[Kate Luzio]

But now it's 3. It can never go above three and a half percent, which, by the way, in our lifetime, you'll never see that low of a rate from any bank ever.

[Diana Ransom]

Oh, no. It was incredible.

[Kate Luzio]

It was incredible. And every founder that could have taken it. No, should have taken it. But they didn't. So many women.

[Diana Ransom]

Lots of people did.

[Kate Luzio]

Lots of people did. But I think was, what was it? $4 billion worth. That took it. But lots of women that we talked to didn't want to take it. They didn't see that as good debt. And that actually is an example of good debt.

[Diana Ransom]

Okay. Yeah. No, it's interesting and it's worth inspection on, like, are we holding ourselves back?

[Kate Luzio]

Yeah. But clearly the numbers, as you said in the very beginning, speak for themselves and the number of women that are starting businesses and continue to start and are taking massive risks on themselves. So for the world that thinks women are risk averse, and then you look at the numbers of women that are starting businesses every day, it doesn't add up because we're taking the biggest risk of our lives by becoming an entrepreneur.

[Diana Ransom]

100%. So speaking of becoming an entrepreneur, let's talk about Luminary for a minute. What's new? What's shaking? What are you doing that's different?

[Kate Luzio]

Well, we just completed our third acquisition, which has been very exciting.

[Diana Ransom]

I was wondering when you said that.

[Christine Ligorio Chavkin]

Yeah, Congrats, Kate.

[Kate Luzio]

Yes. Last year we and you guys did an amazing job covering it. We acquired a company called the Crew, led by the amazing Tiffany Duvous. Yep. Longtime Luminary member and great friend. And then we acquired Heymama in January of this year that we announced. Oh.

[Christine Ligorio Chavkin]

Which I've also written about many years ago.

[Kate Luzio]

Yes. So women's working moms community has been around over 10 years, which is amazing. And we've partnered with them for the last six years through Luminary and Heymama, and in lots of different ways, and it just made sense. And so we acquired them and have now fully integrated their community into Luminary. And we're really excited about that. But we're also really excited, as I was explaining earlier to Diana, our B2B model is really our growth engine. And it was always by design when I wrote the business plan. And it's more than 60% of our business, which most people don't know.

[Diana Ransom]

Yeah, I was going to say it was kind of news to me that you had one, to be perfectly blunt.

[Kate Luzio]

Because everyone thinks, oh, it's the founders and the entrepreneurs. And that's a huge part. That's 50% of our community at large. But the biggest part of our business is working both inside companies, supporting talent development, employee engagement, leadership training and development across all employees to the ERGs, to HR, et cetera. And then B2B2C, where we work with companies that are looking at our community as great communities that they can tap into, where we're using those communities to get great content. And so we know so much of what we put out every single day, Our events, our workshops, but that content. And my former coo, now general counsel, tells me all the time, Katie Luminary needs, like, a stamp of approval, because what we hear from our members is, oh, you're working with X Company. We trust them because you trust them. And so that's a whole different part of our model.

[Diana Ransom]

Luminary certified.

[Kate Luzio]

It would be a lot easier than getting minority woman certified in this country.

[Diana Ransom]

Oh, that's a whole other. That's a whole other thing episode right there. So let's segue for a minute. You were one of our female founder advisory board members this year. Thank you so much for your role in helping us come together with the list. So we have 500 women on this year's list. It's kind of stunning to think about it. We went from 100 and 100 for a couple of years, and then we went to 250. And I thought I would die.

[Christine Ligorio Chavkin]

Like, this is too much.

[Diana Ransom]

And then this year, we have 500. I mean, we definitely got a lot of interest, and that's really heartening. You know, like we were saying before about how female founders are starting businesses and in record numbers, and that's great. But we're also seeing it at Inc. You know, they're applying to these lists. They want to be recognized, which is really cool.

[Christine Ligorio Chavkin]

And these companies that are on the list, it's not just everyone who applied. These are the ones who are growing fast or doing a. Did a remarkable thing. Had, like, a remarkable inflection point this past year.

[Kate Luzio]

Yeah. And some that have been around for a very long time.

[Christine Ligorio Chavkin]

Yeah.

[Diana Ransom]

But that's kind of the cool thing about it, is that it's a discovery vehicle. Right. You know, we're learning about, like, new emerging companies, but. But we're also learning about companies that we already knew, like, oh, you're doing X differently and you're actually getting great results. So it's cool to see. But I was hoping to hear from you, Kate, about what were some of the standouts that you reviewed.

[Kate Luzio]

One of the things that I love about this list is also looking at the history you think of a company. I'm going to use LTK as a great example that I thought had been around for a couple of years. They've been around for more than 15 years. I think they were the original and I didn't know that. Right. So I think goes back to sort of reteaching ourselves that nothing is an overnight success. And so you look at her business and sort of how they've evolved the business. So I was really excited when I saw LTK on there. And that's Amber Benz Vox. She's definitely.

[Christine Ligorio Chavkin]

She just sort of had figured out affiliate links, right?

[Diana Ransom]

Yes.

[Christine Ligorio Chavkin]

Like, it was a simple, simple thing online. And then with each social platform that launched and grew, her platform then expanded and gained a new universe.

[Diana Ransom]

And she also was able to attract, what was it, a huge amount of money from SoftBank. Right. So maybe that helped propel some of the success or recent. I don't know.

[Kate Luzio]

Well, I think for LTK in particular, I'm not an influencer, but it has taken quite some time for her to have real competitors. So she had a. And she has a great model and I think she has continued to evolve that. And when you go on an Instagram and I don't, I'm not on TikTok, but I mean, it's amazing to me how many people, not just, you know, the big, big influencers have LTK pages. So I think that was a standout. The other, which I think was new on the list was Chelsea Hirshhorn and Frida.

[Diana Ransom]

Yes, Frida Baby.

[Kate Luzio]

Frida Baby never been on. I mean, what she has built and as someone who is not a mom but has purchased free to baby for. I think every baby shower I've ever went to, it's on every list. But now for free to mom and postpartum. And I think this is funny part of it. Last year I went through a hysterectomy and there are not a lot of products for women that go through surgery in the reproductive area. And. And Frida mom was really the only thing out there that I used. And I think she has a whole new product line. But she is. What she has built is amazing and it's great to see the recognition. Another one, Berardi Immigration. So I just thought this is so needed right now. It's a law firm and helps immigrants navigate the process. So given what's happening in the world, I think she will see a huge amount of growth this year. And then lastly BE Leaf Medical which is not just about cannabis but it is about how cannabis companies get funding. So I think BE Leaf Medical, if they can figure out the funding opportunity because banks can't fund cannabis companies, I think they have a huge opportunity and the cannabis base is just blowing up. But lovely. It's great to see a woman in.

[Diana Ransom]

There and what a cross section.

[Kate Luzio]

What a cross section. I know, it's exciting. I love reading these because I think some of the businesses, in fact you read some of the submissions and I'm like, I don't even understand this business but it's amazing to see women and also tech stem engineering climate that would be considered. And I'm using air quotes, male dominated or male industries and they're saying no, yeah, I'm in this and I'm building amazing companies to change the world.

[Diana Ransom]

So one company that stood out to me as you're kind of going through this list that we covered in the actual female founders package was New American Funding. It was co founded by Patty Arviello and her husband Rick Arbiello. It was co founded in 2003 I think is when they started the business. She's 60 years old. Basically. New American Funding has created this niche in sort of lending to Hispanic population and then has subsequently started to lend to different, like different other ethnic communities. And what they've done is basically like we hire up dramatically so we can cater to these individual communities. And it's great too because it's like it's just acknowledging the fact that, that some people have needs and these people had unmet needs for a long time. And you couldn't even call up a mortgage lender and have somebody speak Spanish.

[Kate Luzio]

Right?

[Diana Ransom]

I mean, so it seems so basic but like just doing that has led to the creation of one of the biggest mortgage lenders in the country. It's not the biggest, but she's on track. What I thought was cool about her story is that she actually spends a lot of her time mentoring other Hispanic entrepreneurs. And, and it doesn't have to be women necessarily, but the idea is like she wants to be able to kind of pay it forward. And I think that that's a theme that we should all Kind of take with us is this idea, yes, we've found the success, but how do we pay it forward? So she's mentoring and then also just being featured on the publication is an act of representation. So women who are reading Inc. Magazine will see like, wow, Patty did it. Or wow, Kate, Lucio did it. I can do it too. And that's kind of moving in a way.

[Kate Luzio]

It's hugely moving. You see her be her.

[Diana Ransom]

Yeah, exactly.

[Kate Luzio]

Right. And I think that what I love about this list and what I've loved about the list since I debuted in 2019 on it, by the way, I don't say that lightly. That is a very big honor and acknowledgement as a business owner to be on this list. And I think that's why these submissions are so well written and thought out and why some business owners don't do it the first year they're starting. They wait and take their time, if you look at some of the size and scope of these businesses. But what shows me sort of this whole conversation is that we're here to stay and we just need to keep moving forward. Like there's nothing that can hold us back outside of access to capital. No, there's nothing that can hold us back that. That we can't overcome. Right. And the idea of paying it forward and the idea of really leveraging networks and resources like Ink, by the way, I think it's the first thing. Did you know that that's one of the first magazines I read when I started Luminary? I had never heard of Ink, really, because I wasn't an entrepreneur.

[Diana Ransom]

Did you think we were a tattoo publication?

[Kate Luzio]

No, I did not. But somebody at the bank that I worked for would take the inc5000 every year. I didn't know this then. And that is how they would go after business development in finding those companies. And so when I was leaving, someone said, hey, pick up a copy of the Inc 5000. You'll learn a lot about starting a business. And that's what I did.

[Diana Ransom]

That's awesome.

[Kate Luzio]

Yeah.

[Diana Ransom]

So cool to hear.

[Kate Luzio]

Yeah.

[Diana Ransom]

Well, Kate, thank you so much for coming on today. Christine, I'm sure would agree. We've learned a lot.

[Christine Ligorio Chavkin]

Yeah. Kate, thank you so much for being here for this three episode series.

[Kate Luzio]

Thanks for having me. Panoply.