How to Join the Venture-
Women CEOs get less than
3 percent of VC funding. What
to know to beat those odds
anced. And women seeking financing face many
less measurable challenges, including sexist treatment ranging from the merely condescending to
It seems like an intractable problem, despite
being a well-known one. “The equity model that
exists in the United States does not appear to be
a particularly good fit for many entrepreneurs,
especially for women,” a group of researchers wrote
in a 2014 report for Babson College’s Arthur M.
Blank Center for Entrepreneurship, which has
been monitoring the issue since the late 1990s.
But while we’re awaiting a more equitable
future, entrepreneurs like Downey have to figure
out a way to get their funding in the imperfect here
and now. She had 20 minutes in front of a room
full of less-than-interested dudes. This is how she
vaulted over the financing gender gap.
First of all, it’s crucial to come off as an
expert—even a know-it-all. Don’t worry about seeking consensus. “Women often see investors as a
higher authority, and each suggestion as a command. Men see investors as partners whose suggestions are a starting point for a larger conversation,”
says Margaret Musgrave, a senior analyst at the
Innovate Indiana Fund. When Downey realized
few in the room knew anything about children and
would have little cause to criticize her business,
she tossed her prepared pitch and used the meeting
to inform the investors about new parents’ needs.
Remember, men are often faking it too. When Downey sought advice from successful male
entrepreneurs, one told her that before meeting with VCs, he pumped himself up by walking
around the block while listening to his workout playlist. “Do whatever it takes to enter a
room with a little swagger,” Downey says she learned.
The more often you pitch, the greater your chances someone will say yes. Don’t fold at the
first no, and don’t take rejection personally. “If women knew they needed to pitch to a hundred
investors to get four to say yes, more women would stay in the game,” Musgrave says.
But don’t waste your time pitching to just anyone. Instead, make use of everything from
LinkedIn to college alumni associations for personal introductions. Downey credits her
success to the three months she spent in Techstars’ startup boot camp, where she emerged as
part of a growing network of mentors and entrepreneurs. “I can get support and advice and
introductions by asking people I’ve never met from other Techstars classes,” Downey says.
It sounds a bit like a fraternity’s alumni network. A fraternity, that is, that includes
women as well as men.
ALLYSON DOWNEY WAS sure from the start that her funding pitch was doomed. In October 2013, the co-founder of weeSpring, a website on which parents shop for and review baby products, met with a group of almost two dozen angel investors. Most were under 40. Only one was female. And none were parents. “This is a complete waste of time,” Downey recalls thinking.
Yet she walked away from that meeting with $115,000. Downey
succeeded by recognizing how the odds were stacked against her
for one simple, unfair reason—her gender—and by figuring out how
to beat them. It’s a fiercely frustrating system, but Downey’s methods can improve your chances of getting funding while female.
Even though women own more than a third of businesses in the
United States, the tech and venture capital worlds remain largely
boys’ clubs. (Just ask Ellen Pao.) Less than 3 percent of all venture
financing goes to startups headed by female CEOs; for angel invest-
Helaine Olen is a veteran personal
finance journalist, author of Pound
Foolish: Exposing the Dark Side
of the Personal Finance Industry,
and co-author of the upcoming
Everything You Need to Know About
Personal Finance ... on an Index Card.
SPREAD THE WEALTH
MONEY 86 - INC. - MAY 2015