Ernst & Young Entrepreneur of the Year Awards 2001 Supporter of Entrepreneurship Catagory Winner: Catherine Muther

When Cate Muther retired at age 46 as a marketing VP for Cisco, she wanted to do what many who leave the senior levels of corporate management do: start a new venture. But for Muther, that enterprise would have to reflect her passion for influencing social change and draw from diverse sectors of her multifaceted career.

Muther graduated from Stanford’s MBA program in 1978, at a time when women had not yet achieved large-scale entry into the management suites of Corporate America. Since there was no defined career path in business for women, Muther created her own, forging a successful marketing career at Arthur Little & Co., Bridge Communications, 3Com, and Cisco. Over the years she built relationships and acquired business and technology experience. Creating a foundation seemed like the natural avenue to apply her knowledge and resources to give back to the community. With an initial investment of $2 million in personal Cisco stock, Muther created the Three Guineas Fund, one of the first foundations in Silicon Valley founded by a woman.

The name of the fund comes from the title of a 1938 essay by Virginia Woolf. In “Three Guineas,” a character is asked to donate a guinea to each of three causes: one to prevent war and preserve intellectual liberty, one to educate women, and one to promote their employment. “Woolf was saying that if you want to increase women’s social standing, they need to be educated, and they need to earn their own living,” explains Muther.

It was through John Morgridge, a mentor at Cisco, that Muther’s philanthropic interest began to evolve. “He conveyed a real sense of joy in giving,” says Muther. “It wasn’t about obligation. It was about the joy and significance of giving something back and having an impact.”

Muther took the entrepreneurial and philanthropic models she had observed and created a unique hybrid—a fund with an operating side that creates programs, and a grant-making side that benefits programs. Both sides strive to promote women’s access to education and the economy. “It mixes both entrepreneurial and philanthropic elements. It’s different, and it reflects how I like to work,” explains Muther.

Through supporters that included the city and county of San Francisco, various foundations and corporations, and partnership with the Panasonic Digital Concepts Center, she embarked on Three Guineas Fund’s largest project, the Women’s Technology Cluster (WTC). Launched in San Francisco in January 1999, the WTC was the first business incubator in the nation for technology start-ups with women principals. It provides fledgling companies access to venture capitalists, as well as to business leaders, accountants, and lawyers, who are often the source of referrals to venture and angel investors. Entrepreneurs also receive access to inexpensive office space, office furniture, equipment, and high-speed Internet access.

But the WTC is more than just a business incubator. It’s a model for venture philanthropy. To instill a sense of philanthropy in young businesses from the start, each entrepreneur pledges 2 percent of equity, which is reinvested in WTC programs and in the community. “With everything we do, we try to weave through the idea of giving back, that entrepreneurship and philanthropy are linked,” says Muther. “We want to have this integrated in people’s minds and in their experience from the very beginning.”

Muther has developed a work style that relies on teamwork and a diversity of ideas. “I’ve learned that when you create something new it works best when you work with other people in a collaborative way. It takes partners all working together with the same vision and different skills to really make things happen.”

In one of the WTC’s newest programs, the Young Women’s Technology Cluster, high school juniors and seniors from the San Francisco Unified School District learn about entrepreneurship through technical training and internships at WTC companies. “It allows the entrepreneurs to give back by serving as role models, and they get a skilled person for their business—it all just works,” Muther asserts. “They get to use the resources they have, their skills, or their wealth in ways that make a difference in society and enrich their own life.”

Since opening, the WTC has housed and mentored 15 start-ups. Its portfolio and graduate companies raised more than $67 million in venture capital and angel funding. Kim Fisher, CEO of Audiobasket, one of the WTC’s graduate companies, raised almost $10 million for her young company and established it outside the WTC. A WTC success story, Fisher has come full-circle, leaving the CEO position and returning to the WTC as one of its co-directors.

Muther credits her recipe for success to a process of continuous learning. “I think our strength comes from an openness to change, to trying new ideas, and failing. It’s a process of reinvention,” she says. It’s hard to keep that success a secret. Muther gets hundreds of requests a year from around the world for information on replicating her ideas. She’s been featured in publications including Fast Company, Inc., The New York Times, The Wall Street Journal, and Time.

What Muther enjoys most about her work is the hope that it’s going to change something and have a lasting impact. As founder of Springboard 2000 she took an existing model and adapted it to what is now a national forum of venture capital fairs tailored to women entrepreneurs. She’s a founding member and chairman of the Foundation Incubator, the first incubator for start-up foundations. And Muther established an environmental operating foundation called Goldenrod to protect coastal barrier beaches and wildlife in her native Massachusetts.

Does she think she’ll ever retire? “I’ve thought about it, but you never know,” Muther says. “I might just start something else. I can’t help myself. You’ve heard of serial entrepreneurs, haven’t you?”