At the end of last year, Crunchbase News reported that VC funding for startups founded by women had dropped by 27 percent in 2020 compared with 2019.
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It’s a significant statistic, and it provoked a lot of concern among both female founders and those trying to encourage women in the entrepreneurial space, but that doesn’t mean women who are preparing to enter a funding round need to be alarmed.
The picture might not be that bleak
As the report itself notes, the percentage of funding that goes to female-founded companies fluctuates a lot and can be influenced heavily by a single large funding round.
If you step back to look at the bigger picture, you’ll see that the overall trend is still upward. The number of sole female-led startups that received funding between 2016-2021 increased by 72 percent compared with the period of 2011-2015, with the amount raised increasing fourfold.
Personally, about 20 percent of the startups I work with are led by women, and 50 percent have women on the founding team, which isn’t a bad ratio. Yes, it needs work, but I feel we’re moving in the right direction.
Does gender matter anyway?
There are plenty of reasons why a startup may or may not receive funding.
The question should not be if the company is female-led or male-led, but rather if the idea/product is solid, there’s an addressable market, the team is well-rounded and works well together, etc.
If women founders worry too much about the gender issue, there’s a risk they’ll overlook other more significant aspects of their pitch.
Don’t seek a behavior pattern that justifies your anxiety; instead, treat each funding meeting as though it’s the first one, which means focusing on selling your company as well as possible. If you had a bad meeting, try not to bring that into the next meeting—come in with renewed confidence and a clean slate. The most important thing is to keep the momentum going.
I advise women to approach funding rounds “like men do,” namely without thinking about your gender at all. Your title is “founder,” and you need to apply the tactics of highly successful founders, including:
- Showing why you are the one/s. Don’t be shy to showcase both yours and your team’s abilities, skills and accomplishments. This builds credibility.
- Mastering “the brag.” Don’t wait until slide 17 to share strong figures. You’ve worked hard for this, so don’t be afraid to “toot your own horn”—especially if there’s truly something to toot.
- Know your numbers. It’s a frustrating double standard: You will be scrutinized more, so rise to the occasion; learn your numbers inside out, backward forward. Numbers are an investor’s “love language.”
- Going in big. Don’t downplay the uniqueness of your proposition. Paint a glowing picture of your bigger vision, even if it’s still some way in the future.
Women founders can succeed despite the gender barrier
It’s true that the VC world is male-dominated, with women underrepresented both as founders and as VC partners. It’s something that needs to change, but in the meantime, gender identity should not be allowed to dominate the funding experience. The goal should be to make gender a nonissue, not to keep pushing it into the spotlight.
And since traditionally, investors tend to back someone “like them,” let’s turn the tables. Seek out strong, successful women in your networks: LinkedIn, alumni, workplaces or communities for women founders and investors like Women Founders Unite. If we want to flip the ratio, we can speed it up greatly by scaffolding each other, taking the time to mentor, connect, advise and invest.
And most important, perfect your storytelling, ace your pitch and deck, know your numbers and come fully prepared to VC meetings.
Donna Griffit is a corporate storyteller and pitch alchemist who has helped over 1,000 startups, corporates and investors raise hundreds of millions of dollars.
Illustration: Dom Guzman
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