I read an article in Entrepreneur magazine a few weeks ago, about how women entrepreneurs run 30% of all small businesses, but receive just 7% of venture capital money.
In order to grow, I’ve had to raise a lot of money! hint® is now a multi million dollar company and the fastest growing flavored water in the US today.
I get asked all the time -- especially on panels when I am speaking at conferences: “Has it been hard to raise money, as compared to male entrepreneurs?” I say, “How would I know the answer to that? Did I have to knock on twice as many doors? Yes, I probably did. Do I think that women entrepreneurs need to work 2-3 times as hard when fundraising? Yes I do. “
But do I have any way of knowing for sure? No I do not.
LinkedIn conducted a survey earlier this year on the state of diversity in venture capital and entrepreneurship. They surveyed members who work in venture capital as well as founders of startups with fewer then 100 employees. Here is what they found:
Female founders are significantly more likely than male founders to feel that “most venture capitalists did not understand the product or service I was trying to sell” (42% vs. 28%) and “most venture capitalists were not the target customers for my product or service” (57% vs. 46%).
Only 15% of female founders agree that that “the venture capital community is making meaningful progress toward investing in more diverse founders.”
79% of female investors have witnessed episodes of sexism in the industry (conscious or unconscious), whereas only 28% of male investors report witnessing episodes of sexism in the industry. And 60% of female founders have witnessed sexist episodes while trying to raise capital, compared to 8% of male founders.
Back to my own experience.
I do see issues that need to be addressed, and I also have a strong perspective on what’s made it work for me—and how to add some empathy into the whole conversation (for both genders).
Gender Inequality IS Still An Issue – Particularly In Female-Focused Categories
If a product has a female slant or one that men may feel uncomfortable talking about, I think it is harder to raise money.
Sara Blakely has said that when she launched SPANXS, she couldn’t raise any money because most guys don’t wear pantyhose and they don’t take the time to understand what the challenges are with women holding it all together – I’ll just leave it at that. There are also a lot of other companies that deal specifically with female-focused products that have had a hard time. There’s THINX, a ‘period panty’ company that fought hard to have a print campaign in the NYC subways. Really!
A friend of mine launched a company called helloflo.com (that is now part of Proctor & Gamble). It was an ecommerce feminine product delivery company. When she was going out and pitching it to VCs, it was tough to get meetings -- it was especially difficult. For a lot of people, and maybe especially men, these are topics they’re just uncomfortable with.
I happen to have a husband who can talk about “these things”, menstrual cycles that is -- he has two teenage daughters and has learned quite a bit from them. But again, for a lot of people, these are topics that they’re just uncomfortable with. For people in this category…people might champion you—but the jury is out as to whether or not they will take out the checkbook.
I still believe this. People invest in what they know. You heard it here.
That said, the world is changing: I’m also raising two sons. I’ve raised them to talk and think about women’s issues. When we’re talking about female products in the future, I hope the conversation is, “My mom’s a badass. My sisters are cool. I hang out with them - none of this is an issue.”
Right now, though, if you have a female-focused product, you have to find that guy and somehow figure out if he is comfortable talking and sees the issue of your product with the same lens that you do. Does he have a good relationship with females…his mom or his wife or his sisters? If he has a good relationship with the women in his life, it’s a higher probability you’ll get funded and maybe he can see it your way.
Should it be this way? No, it shouldn’t. Is it changing? Yes it is.
A Pity Party Isn’t The Answer. Humor and Humanity Are.
And in the meantime: there are ways to increase your odds of getting funding – and put a positive light on things.
I have four kids, and my kids were young when I first started hint®. I’d be in investor meetings and people would say, “Who’s watching the kids??” The way I handled it was to pretend to be surprised and say, “Who IS watching them? I’m glad you reminded me!” Then I’d laugh.
(It was interesting because Theo, my husband and COO, would also be in the meeting, and the question would always be directed at me – which he found offensive to him!)
Or sometimes in meetings I would get the comment, “You remind me a lot of my daughter or my mom.” When guys have said that to me in investor meetings, have I taken this personally or thought it demeaning? My answer. No. I think it’s them looking for a way to relate to me.
I realize they’re asking me because they’re imagining some female person in their life in my position and thinking about how it might apply to their own lives. Maybe they are thinking, “Well…who would watch my kids if my wife went off to pursue her passions?” Or they’re asking because they have a college-aged girl and they’re trying to teach her how to grow up and have it all. They genuinely are curious about how that happens. How do you juggle raising kids and running a company?
My take. Don’t be so quick to say that guy is a jerk for asking. The real key is putting the positive on it and saying, “I’m sure he was asking for a valid reason” -- and then being able to figure that out what that is.
AND, Ultimately, The Biggest Question Is: Can An Investor Relate To Your Product
Finally, I remind entrepreneurs all the time—people invest in what they know.
Even in the case of hint®, the people I’ve run into that like my product the most are the ones who relate to it. They’re drinking and funding our product because they don’t want sweeteners in their diet and they understand that consumers are reading labels. People invest in things that interest them. If you’re talking with a person who doesn’t care about what you’re selling and can’t see that this can be a billion dollar idea, your chances are low of getting a check out of this person. It doesn’t matter if it’s a female-based biz, or a male based business, or about dogs. It needs to be a segment they can relate to personally.
And always remember this: if you deeply believe in your idea, it doesn’t matter whether that particular person does or not. Because you do. And there are are other investors who will. It’s a numbers game and you need to go find those people who believe in you and your product.
Beyoncé has this great lyric that’s worth adopting as your motto when fundraising (even though she invested in a product called Watermelon Water -- that is not water at all! I love her. ; ) )
She says: “Male or female, it makes no difference, I stop the world.” – Beyoncé
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