I recently participated in a panel discussion, it was part of the Women in Technology Summit. On the Panel were five awesome women: Helena Ronis (me) Co-founder and CEO at VoxSnap. Jennifer LeBlanc CEO & Founder at ThinkResults, Anna Shen Startup Advisor, Ecosystem Builder & Journalist, Dea Wilson Founder of Lifeograph and an Angel Investor, Morgan Lai, Investor at Foundation Capital.
If you’re a female founder join our Female Founder Community FB group for peer support, advice, and resources.
The panel discussion was about how to turn the numbers around for female founders and funders.
Data shows that women receive only 2% of venture funding and make up only 9% of VC partners, yet research shows that companies with female leaders and board members outperform all-male companies.
Jenn moderated the panel.
Question from Jenn: So the first question is, given that there is a very clear not just a social, but a business case for putting more money in female founders, why is the number of funded women founders are so low?
Anna: There is a general bias and underestimation of women, that they are incompetent, that they are not going to be able to pull it off, or that they may not have the technical expertise. Those biases are deeply embedded in our society.
Helena: There are differences in how male and female founders pitch, when men pitch they talk about how they are going to “take over the world” with their company, they pitch a large vision. When women pitch we are more tactical, which is not bad, it’s results oriented and that’s what moves the needle in the business at the end of the day. But to be able to secure venture funding investors want to hear the big ambitious vision of how you’re going to “take over the world” with your company.
Dea: Investors invest in people that they can relate to, people who look like them, went to the same schools they went, etc. If we want to change the numbers, we need more women to become investors so they can relate to other women. You can start by investing whatever you can, for example in a female founder’s crowdfunding campaign.
Morgan: With early-stage investing you get very little data points to evaluate the business, so what you’re doing is a very emotionally driven investing strategy. So with that in mind the next question as a female founder is how can you get that right. As a female founder try to expand your network and build relationships with other female and male founders very early on. Then develop relationships with investors in your industry and send frequent updates about your progress. Let them feel like they are part of your journey, let them be your advocate.
Question from Jenn: According to The Boston Consulting Group (BCG) women-owned startups deliver twice as much per dollar invested as those founded by men. How can we get more capital in the hands of women so we can make more money as investors? What are some of the brights spots that you’re seeing in terms of progress that we’re making in getting more capital into female founders?
Dea: The fact that this issue has been raised drives more women to become partners now in VC firms. Also, more female founders in Accelerators. The groups of female entrepreneurs that also are becoming investors contribute a lot to to the progress of funding more women. I see some progress, but not enough. More work needs to be done. Advice for female founders, when you go to an event, network with more investors men or women, don’t just come for the talk.
Morgan: At the end of day investors can always come up with excuses why they are not going to invest in a startup. The only way to combat it is to have more traction data, to really convince an investor. To make a difference in the Valley we need to have more diversity and female-focused early stage seed funds, or acceleration programs investing in female founders. Give female startups 18 months of runway to show results and traction.
Helena: If you want to win you have to be a hustler, it’s not going to be easy, you’ll have rejections and setbacks, but if you’ll keep pushing and moving forward, you’re going to win, one way or another you’re going to win. In our Female Founders Community we have founders share experiences about fundraising, and it seems that there are not enough “risks” and “bets” taken in early stage, many founders are experiencing it with the women-focused VC funds.
Question from Jenn: Research by Harvard Business Review found that male and female entrepreneurs get asked different questions by VCs — and it affects how much funding they get. 66% of the time female founders got asked prevention oriented questions focused on safety, responsibility, security, and vigilance. For men 67% of the time promotion oriented questions were asked, focused on hopes, achievements, advancement, and ideals. Researches then found that for every prevention oriented question that was asked, those startups went to raise a staggering $3.8 million less in funding.
The good news is that armed with the knowledge that promotion has advantages over prevention, female founders can recognize question orientation and frame their responses to benefit their startups.
What do you think funders can do to better support female founders?
Dea: Special pitch sessions just for women can be interesting in terms of making a difference. The best thing we can do is for all of us to become investors, you don’t need to be a millionaire, you can invest in crowdfunding in female entrepreneurs, even if you put a hundred dollars. Also, when you invest, it puts you in a mindset of an investor which will help you understand and pitch better as a founder.
Anna: I help Sarika with the Meet the Drapers TV show, where they do real-time crowdfunding. If you are interested in crowdfunding, Republic is platform. Supporting inclusion is important, and the shows whole moto is non-traditional founders. For example a single mom from Ohio that would otherwise have never got funding. It’s really about creating structures whether it’s a formal institution or informal networks to really support that.
Morgan: Everyone who has the financial capability should become an angel investor in female founders. You have to find investors who really align with who you are and what you’re doing, it’s about finding the right profile of investor. A lot of first time founders spend a lot of time on pitching any VC they can find, which is a waste of time because from the get-go the VC probably won’t be able to understand you and your industry. No matter if you’re looking for female or male VC, you need to do your research to identify who are the VCs already in your industry and will understand what you’re working on. Be efficient with that.
Helena: From a founder’s perspective, when tackling the VC bias, understand the bias and show a winning mentality. Respond to risk-prevention questions with promotion-oriented answers. If you can, find a mentor who is also an investor, to coach you in preparation and through the fundraising process.
Question from Jenn: Let’s talk about #MeToo and the book Brotopia. Stories from the book are disturbing. The whole process of writing my book Changing Tides started from feeling “I need to do something about this”. Let’s talk about how the #MeToo movement which started last year impacted us.
Question: How did the movement impact or did not impact your world, from your prospective?
Morgan: One observation is there more firms actively doing diversity trainings. Overall #MeToo was a great movement to bring people’s awareness to problems of sexual harassment in the Silicon Valley and the industry as a whole. On the other hand I hear from male VCs that they are a lot more concerned in terms of building relationships with female founders, because as we said earlier investing is very emotional, so it’s very important to be able to build close relationships with your investor, and after this movement there are definitely a lot more investors who feel overly cautious with their interactions with female founders which is very unfortunate.
Anna: I would echo the same thing. Getting more women involved will make a difference, more women getting a sit at the table will make things change.
Dea: Totally agree. The discussion about #MeToo comes not only from the founder/funder relationship, but also relationships with co-founders. Starting a startup is like “getting married” without the paperwork in terms of time commitment, so founders need to understand that they also need to respect each other and know the boundaries.
Helena: The #MeToo movement was good at surfacing things up and creating awareness to bad behavior. I also agree that it created a “tear” that needs to be “re-stitched”. Now that the dust has settled on the #metoo movement, it’s time for a new movement, a positive one that will encourage good people to step up and help female founders. The #ibelieveinyou movement!
No matter if you’re male or female, if there is a woman in your life who started or wants to start a startup, you should support her with resources, open doors for her with connections, introductions and an investment. You’ll make a difference.
Jenn: We want it to be a movement of kindness and cash!
Dea: Yes, become an investor in HER!