"It is harder for women to raise money. It just is, and it pisses me off," top angel investor Joanne Wilson has written on her blog. The numbers back her up. Even with record-breaking amounts of capital being invested in startups, just 2.2 percent of that money goes to companies led by a woman.
There are lots of reasons for this glaring inequity, but one big contributing factor is clearly children. Fatherhood isn't presumed to make a man any less dedicated or likely to succeed as an entrepreneur, but when a female founder has small kids at home or on the horizon it still rings alarm bells for some investors.
Dealing with the double standard
Is that a glaring double standard? Why, yes it is. But it's the reality for many women entrepreneurs looking to raise money. So, until the equitable sharing of responsibilities at home makes these worries obsolete, how should female founders respond to VCs who bring up the issue of how they'll juggle their business and family?
Dana Wright wants to help. On her blog recently, the managing director of MATH Venture Partners opened up about her own decisions around family and career and offered tips to both investors who stress about the reproductive choices of women entrepreneurs and to women themselves on how to address "the children question."
Wright's advice for her fellow VCs is simple: Cut it out. "Consider how offensive the question might be perceived and stop asking it," she says. And if you can't quit this retrograde habit cold turkey, she says, "then ask both the male and the female entrepreneurs. Aside from the obvious short-term time off, there should not be a difference."
Her advice for women entrepreneurs, however, is more detailed and consists of five solid pointers. If you're fundraising, the complete post is well worth a read, but here's the essence of Wright's advice:
1. Assume positive intent.
First, realize that not every conversation in which family comes up is about sniffing out your dedication to your startup. Sometimes, investors genuinely want to get to know you.
"I sometimes ask questions to try to better understand entrepreneurs on a human-to-human level. I often ask about passions outside of work. Sometimes, this leads to interesting places and often leads to discussions about family. I am simply trying to see what makes a person tick for insight into values and motivations," Wright notes.
2. Prepare for the question.
Sorry, the children question might be sexist, but it's still common.
"Have several planned responses ready and practice them. Why two or three? Because, in the moment, you have to choose your best response. If the meetings have otherwise gone well, you may respond one way (i.e., 'I haven't decided yet. Is this a standard question you ask?'). If the VC is being a jerk the entire meeting, you may respond in an entirely different way," advises Wright.
3. Meet the question head on.
There's no need to be shy. There's nothing wrong with having or wanting a family, though some VCs may need a nudge to remind them of this fact.
"You can ask them why they are asking. You can ask them if they are married, have children, or plan on having children. Sometimes, the most effective strategy is to turn the tables. It also affords you an opportunity to find common ground," says Wright.
4. Own it.
If an investor presses on, Wright counsels candor: "If you already have kids, you can relate how you currently manage the load. If you have a support system, talk about that. If you are pregnant and showing, describe a well-thought-out plan for managing the time off--who will cover, how key decisions will get made. If you are an early-stage startup with a small team or a sole founder, recognize that time away is a reality, and then demonstrate that you have a plan to operate the business through the leave."
5. Do not be afraid to walk away.
Finally, though, if after reflection and a bit of digging you get the sense a particular VC doesn't share your values or understand you and your business, this deal might not be the best match for your startup. It's OK to walk.
"I recommend finishing the meeting and giving yourself time to reflect. If you get to the next stage of diligence, speak to multiple portfolio company CEOs to ask about their interactions in good times and bad. And, before you agree to take the VC's money, have the talk. Ask why they felt that was an important question. How did it help inform their decision to invest? Clear the air, and set the expectation for how you will handle difficult conversations in the future," Wright concludes.