We recently hosted a web meeting with a group of women CEOs and investors. The goals of the meeting were twofold:
- First, to determine if these women leaders experienced bias in fundraising.
- The second goal was to develop strategies to deal with stated bias.
Here are 8 take-home lessons and observations. A bonus lesson is that all strategies to overcome bias apply to all biases a Vision Master may encounter are at the end of this blog:
1. All the women have experienced bias or think they did.
2. Some women think they are not fundable as entrepreneurs. This is due to an internalized perception of bias. The first step is to deal with any self-doubt.
3. There is a bias among investors based on the belief that women’s lives are more complex than men’s – That women have more family commitments. This is more like if they have children in the family.
4. To counter this, all agreed that the best strategy is to use it as a positive. Raising a family builds character, valuable patience, and stress-management habits. Stories based around family commitments and past problems solved can create trust.
5. In general, the way to deal with all biases is to acknowledge them and build upon them. Show evidence of key management skills and tell the stories that build trust.
6. Many investors (such as myself) have beliefs that women are not as competitive, risk-taking, and decisive as men. To deal with this, acknowledge it, and point out that the kinds of high-risk businesses that need this skill set are not the kind you are founding. Your business is less risky, having a better than 50% chance of reaching a liquidity event. Make sure you are meeting investors for whom these kinds of startups are appealing.
My biases haven’t changed but I recognize that the kinds of businesses I want to fund are not affected by the bias. Those kinds of founders are too risky for me. Any weaknesses in you as a founder (such as for example, a low-risk tolerance or lack of technical experience) can be offset by co-founders.
The way to think about these character traits and habits is as a team rather than just the CEO. You should never start a company alone anyway. We and you should prefer two co-founders as Y-Combinator and many other accelerators have found.
7. If you tell personal stories in your pitch, you give the investor the opportunity to see you as an individual and to suspend their biases. In contrast, if you try to sell products and markets as you’ve learned from others, the bias will remain in the investor’s head.
8. Most rejections have nothing to do with bias at all, so don’t take it too personally. All investors reject most deals pitched to them. Often, this has to do with their preferences and current portfolio. So, your chances of getting to a second meeting are much better if you tell personal stories that develop trust. The fact is that investors fear and distrust all founders that pitch them. We fear that founders are fantasizing and exaggerating. They are unable to manage a business. They are unable to hold down a regular job and take excessive risks. This applies to men and women founders. Women actually have a better shot at countering this fear.
My advice, as an investor:
- Don’t try to emulate the masculine traits you think investors are looking for. This makes the bias worse. Believe that your relationship skills, management skills, and ethical character make you MORE trustworthy because they DO.
- If you have doubts about being fundable as a woman. Your concern is certainly valid, but if it leads to self-doubt vs. looking at what is in your control, it can be paralyzing. By the way, men are concerned about being fundable and deal with self-doubt. The solutions work in both cases.
- Stress the balance your team creates. No CEO has all the traits investors are looking for.
- Use personal stories to overcome the fear and develop trust. That will increase your chances of a second meeting.
- Go into investor meetings knowing that investors have fear and distrust no matter who is pitching. Be prepared to break through or disarm their fear. That gives you a distinct advantage.
- Meet only with investors for whom your startup or company is appealing.
If you are interested in the topic, read our last blog, Women Raising Capital. Is There a Bias?
Lastly, if you would like to spend 30 minutes chatting about your company or startup, feel free to grab a spot on my calendar here.