When will the business world learn that women are essential to the bottom line? Women make up almost half the workforce, we drive 70% to 80% of all consumer purchasing, and we serve as primary decision makers for household purchasing. So why do innovative women still have difficulty getting funding? The answer is simple: Despite a push from collectives such as All Raise, which aims to double the number of female venture capitalists by 2028, and exclusively female-focused funds such as F3, the majority of investors are men. Last year, only 3% of venture capital went to female founded companies. While female- and minority-focused funds exist, these sometimes feel like concessions of policy, not recognition of merit.
As a female CEO and investor who helps many types of businesses scale and raise funds, I work within this reality. Recently a Harvard Business Review study showed that male VCs viewed young male entrepreneurs seeking funding as “promising” and young female founders as “inexperienced.” From the outset, therefore, women have to overcome obstacles they didn’t create.
Before their first funding pitches, I always run my female clients through a personal boot camp to prepare them for male investors. Many of them bristle at this blunt talk about gender, but I tell them: Recognize the reality, then reboot and relaunch.
Here’s some of my advice that I have given to female founders to help them cinch the deal:
- Know your investors before they are your investors. And that means everything—their investing philosophy, what they have invested in before and why, and how it has worked out for them. But your knowledge should also expand beyond that. Do they have children? Where did they grow up? What are their hobbies? What sports teams do they like? You never know when you will have to leverage personal information to put your pitch over the top.
- If you’re not a techie, hire a great one. Then promote the tech side of your company and underscore the tech leadership’s bona fides, even if it isn’t you. Male VCs will want to know who is running the tech side of your business, as many assume “women don’t understand technology.” Answer this investor question before they ever ask it. And be prepared to talk technology until you’re blue in the face.
- Lock your numbers and the size of the marketplace you’re entering. In a survey conducted by Fast Company and Inc., one female founder put it best: Men are presumed to be competent while women “just don’t get it.” As a woman, you will constantly fight the inherent assumption that you know less about an industry than a man. Prove that assumption wrong by having financials, projections, and business metrics at your fingertips.
- Use analogies that men can relate to. Let’s say you’re pitching the next Spanx, men are not going to be able to relate. I mean how many men would be willing to put themselves into torture devices just to give the appearance of losing an inch of belly fat? Use a comparative narrative that envisions the men getting the same kind of upper hand that Spanx gives to women—e.g., Rogaine and Viagra are profitable opportunities of male insecurity—even if it’s mostly in their heads.
- Don’t let the conversation get overly personal. You’re not there to have your private life investigated. Tell them you’re going to work 24/7 to get your company off the ground and grow their investment. Personal conversations can lead to thoughts of children, and the next thing you know they’re thinking you’re about to have babies and your attention will be diverted from the company. Yes, many men think like this.
- Think lean and mean. Trim ALL the fat from your budget. It shows investors you won’t waste money on anything frivolous. Men view women as spenders, since they spend more at home and do most of the purchasing for the home. Let male investors know that you’re willing to build a company by using Starbucks as your office until you can’t avoid getting office space. You don’t have to promise to live on ramen noodles—but they don’t want you making six figures either.
- Don’t give up too much equity just because someone says yes. This is a very common problem that women face. It’s exciting to have someone believe in your vision, but if the terms are too onerous, future scaling and later funding rounds become complicated.
- Provide personal references from successful men. Sounds ridiculous, right? Nope. Investing is a male domain, so having male allies is critical. You can go further and create a board of advisors that is comprised of successful women and men who have committed to help nurture your company and whose advisement and endorsement will be invaluable.
- Dress for success for your meetings with potential investors. Mark Zuckerburg may be well known for only wearing hoodies and jeans, but he put on a jacket and tie when he recently testified before Congress. You mean business, so dress accordingly.
- And finally, be confident. I know that isn’t easy for many women, especially for those early in their careers, but think of how many brash guys with awful ideas have gotten funding (and subsequently burned through it). If you’re not naturally confident, practice until you give the performance of a lifetime. If you can’t convince your best friend to invest in your company in a practice session, then you’re not going to convince an investor who’s a total stranger.