I love asking for money, said no woman ever! I recently joined the board of Alice, a digital business advisor that helps all founders find the resources they need to scale. Part of my responsibility was to help with the first private equity raise to help grow www.helloalice.com. This social enterprise is based on a machine learning software that allows entrepreneurs to connect with tools based on their stage of growth, location and industry. Dell is the technology partner for Alice because it was built to help women, minorities and veterans advance their companies.
Alice addresses Pitch Book's analysis that just 5% of companies with women CEOs manage to raise capital (a piddling amount compared to men) and in the Bay Area, only 8% of the start-ups that received Series A funding were led by women - which is saying something for the rest of the world, given that the Bay was the number one city for women entrepreneur access to Capital in the Dell Women Entrepreneur Cities Index (#WECities). Dismal as the situation is now, without intervention these figures could drop further, as investors shift to fewer, larger deals. We cannot let this happen. Not surprisingly, the WE Cities Index found access to capital as the biggest constraint for women entrepreneurs to scale, and for good reason.
By capturing the zeitgeist, Alice has already served thousands of entrepreneurs on six continents who have collectively raised over $35 million USD. In fact, Alice is one of them, we recently raised a significant amount of capital from well-known investors including Signia Venture Partners, who led the round with a $1 million seed, and additional support from Jean Case, Sherpa Capital, Zehner LLC, Shatter Fund, Cathie Reid and Ann Lovell, president of Women Moving Millions.
In keeping with the sacred mantra, 'sharing is for caring', here are some words of advice for other women entrepreneurs embarking upon the funding circuit:
1. Get to NO Fast
Get to NO fast.... Finding an investor can be likened to a dating process. Only jump in with someone you have chemistry with and trust. We found the best investors will get your vision from the get-go. If an investor isn't making the right sort of noises from day one, the chances are they won't with further deliberations. These would-be investors often take-up a lot of time only to say 'no' at the end of a protracted process. If it feels like an uphill struggle, pull the cord. As a start-up, you haven't got time for distractions. Set your rhythm and keep things moving fast. You might want their money but your business is the prize, so don't be afraid to set deadlines.
2. Use Your Soundtrack to Build a Bridge
Few VCs will consciously discriminate against female-led businesses - quite the opposite. They want to sell to a female audience. Female-led businesses understand what other women need, making them their best conduit to the female market. But while the intent might be there, unconscious bias can get in the way. We see this in the questions VCs ask.
A team of academics discovered that venture capitalists pose different types of questions to male and female entrepreneurs. Men are asked 'promotional' questions (their potential for gains) and women are preventative questions (potential for losses). As a result, VCs tend to appraise female-led companies very differently to male-led firms (and dish outfar less funding as a result).
Thankfully the research noted that the entrepreneurs who respond to 'prevention' questions with a 'promotional' answer i.e. when asked to defend their market share they frame the answer around the size and growth potential of the overall pie, reversed their fortunes. This is bridging and a common practice in PR. Executives are taught how to 'bridge' from one difficult question to the message they want to convey.
So rather than getting bogged down in the minutiae, I would encourage you to take back control. See the pitch as your podium. It's your golden opportunity to shape the narrative (of course, you need to prepare your key points in advance.)
3. Get Creative with Alternative Funds
Only 7% of decision-makers at U.S. VC firms are women. Usually venture capitalists make investments through a male lens. If your business doesn't necessarily lend itself to that gaze, look elsewhere. There is a myriad of investment options these days - from Family Wealth funds, where you can go straight to the decision-maker, angel investors who are less formulaic in their grant-giving to crowdfunding sites. Each will require a different style of pitching. So, if you're talking to a mission investor, emphasize your contribution to people and planet.
Securing the first investors is always the hardest part, but others will follow, of a similar ilk. The key is to consider your first choice carefully, because they'll become your testimonial.
4. Blow Your Own Trumpet
"An entrepreneur is someone who jumps off a cliff and builds a plane on the way down'. I love this quote - it conjures up boundless vision and dynamism. A man said it - or more specifically Reid Hoffman, the Founder of LinkedIn. (For the record, Reid Hoffman was one of the few leaders to promote a "Decency Pledge" that calls for zero tolerance of sexual harassment from VCs.)
Women-entrepreneurs tend to speak very differently. They're often more deferential, apologetic about defying traditional stereotypes, understated. They might describe their global empire in the making 'as a little side venture'. They'll focus on what they need to conquer rather than what they've already conquered. They'll often carry a deeper burden than men - that they're doing this for women-kind - half of the population that has been shunned in the higher echelons. And much of what they say or do will be laced by guilt. None of which are helpful undertones in the pitching process. We're often told, "don't blow your own trumpet". Well I say, do, because countless studies (and personal experience) show that women don't promote themselves enough.
My over-arching message is to claim your authority - imbibe it, own it and reflect it. If you do that, you will command a room, regardless of its gender make-up, and your accountant will thank you.