Two years ago, seasoned entrepreneur Cris Young was slated to pitch her new e-commerce startup to a group of prospective investors and advisers at a pitch contest in Ohio. As she and her partner spent the last few minutes polishing their pitch, one of the prospective investors entered the waiting room to give a pep talk Young says was intended to pump them up.

She recalls he made a couple of remarks about her pitch and then turned the conversation toward the news that then-presidential candidate Donald Trump had been caught on tape saying he grabs women "by the pussy." Inexplicably, Young says, the investor was keenly interested in whether she had heard the tape.

She couldn't shake how uncomfortable it made her feel. "I just felt like a deflated balloon," she says. Young went through the motions of pitching the investors but it didn't go well--she didn't land the $150,000 she was looking to raise. She says she reported the incident to the event organizers, but nothing came of it.

The #MeToo movement over the past couple of years has emboldened women to speak up about the microaggressions and discrimination they experience at work. In the joint Fast Company and Inc. 2019 State of Women in Entrepreneurship survey of more than 600 female founders, nearly 56 percent had experienced some form of discrimination or harassment in their capacity as business owners.

At the same time, the survey revealed many women are conflicted about how best to deal with subtle, pervasive discrimination. Of the women who reported experiencing such harassment or other incidents at work, 45 percent said they took no formal action in response. Inappropriate comments, such as the ones directed at Young, may not necessarily break a law, even though they're frustrating and out of line.

Inc. spoke with 13 women who took the survey to better understand the microaggressions and discrimination they've faced as they've launched their companies. Investors as the culprits of bad behavior emerged as a common thread. The other sentiment many women shared? Sometimes the best response to being belittled is to excel as a founder in spite of it.

What the post-#MeToo numbers don't reveal

In the workforce at large, the number of people taking legal action against discrimination has gone up post-#MeToo. According to the Equal Employment Opportunity Commission, the federal agency responsible for enforcing civil rights laws, lawsuits involving workplace discrimination on the basis of sex, race, and religion went up almost 146 percent between 2016 and 2018. Forty-six cases were filed in 2016, compared with 111 last year.

Even so, women typically do not report microaggressions, however frequently they experience them at work. They might fear the consequences of speaking up or worry they won't be taken seriously, says Kalpana Kotagal, partner at Cohen, Milstein, Sellers & Toll, who represents workers in class action lawsuits. It's also a legal gray area: If you're subtly undermined in a meeting, did someone break the law?

Of the women Inc. surveyed, more than 90 percent of them said that they experienced discrimination for being a woman founder. Why don't they report it? The behavior is so common, say some founders, that focusing on it would take valuable time and attention away from what they'd rather be doing: building their companies.

Daria Gonzalez, a Russian immigrant, started her own creative brand agency, Wunderdogs, in the San Francisco Bay Area almost two years ago. In the process of fundraising for her company, she says she became accustomed to pitch meetings where her male partners received more attention for the same ideas--something she refers to as the "takeover" effect.

"I can't just be stuck up on this," Gonzalez says. "If I single out every single time, I will get nowhere."

Lynne Laube, the co-founder and COO of Atlanta-based Cardlytics, a platform that powers cash-back rewards programs for banks, faced similar issues. Investors often directed questions about bank relationships, her area of expertise, to her co-founder and CEO, Scott Grimes.

"Bank partnerships were my bread and butter," Laube says. Over time, she says she learned to be more assertive, but she also took to wearing blue tortoiseshell Oakley glasses--what she calls her "smart glasses"--to stand out a little more in meetings.

What Gonzalez and Laube experienced is a common occurrence for female founders. Inc.'s survey found that around 46 percent of women entrepreneurs who reported experiencing discrimination cited investors or bankers as the culprits.

Nonny de la Peña, co-founder of Santa Monica, California-based Emblematic Group, a company that produces virtual reality content, says she frequently was not taken seriously by investors when she started her company in 2007.

In one instance, an investment bank sent over a technology expert to investigate the validity of de la Peña's VR software as a potential investment. After touring him around the campus, she then gave him a demo of the software. The bank's representative directed most of the conversation to de la Peña's male assistant, assuming he had built the software.

In another instance, she and a male junior developer had lunch with a potential partner. The executive asked all of his follow-up questions to the junior developer instead of de la Peña.

"How do you respond to such subtle discrimination?" she says.

Many women say they don't respond--or rather, the best response often is to succeed anyway. Wunderdogs' Gonzalez says her company now pulls in annual revenue of just under $1 million. Cardlytics went on to raise $200 million dollars in equity financing from Discovery Capital, Polaris Venture Capital, and others, and went public in 2018. At the present time, its market cap is just under $1 billion.

De la Peña went on to raise $600,000 to date in funding, and her company now has annual revenue over $1 million. Still, she admits she sometimes thinks that she might not be able to scale her business and make it to the next level unless she has a visible male partner to read the charts in the meetings for the investors.

Young, for her part, did get her e-commerce company off the ground in 2018, though with $350,000 in bank loans and grants, not investor funding. The Youngstown, Ohio-based company, Product Genius Technology, is a platform that helps manufacturing component websites filter complex product categories for wholesalers and customers. Young says fellow women founders need to focus on being accountable to themselves and owning their own lives.

And, she says, referencing a Tom Hanks's line in the movie A League of Their Own, "Remember, there's no crying in baseball. You will get nowhere if you sit and cry."

Nov 15, 2019