You want to invest in women? Really?
You know the stats: women led companies deliver better returns. Fortune 500 companies with women on their boards perform significantly better financially. The people enthusiastic about investing in women will quote these to you all day. However, given the number of really badass people out there having a hard time raising VC funds to invest specifically in women, it would seem that the Limited Partners still do not buy “investing in women” as an investment thesis. And of course, if you look at major VC funding stats, you can see that the industry as a whole still isn’t all that interested in parity of any kind.
So I want to speak directly to investors — Angels, Angel groups, VCs and most especially to LPs — about how to be better at investing in women. I have experienced some common behaviors that I believe must change if we are ever going to move the needle. If you care about driving returns, this post should matter to you.
I’m the founder and CEO of Seed&Spark — a streaming platform dedicated to ushering in a conscious consumer movement in entertainment. We’re a Techstars company. I’m a first time founder with a HELLA HARD business to fund: social good, content, long tail-ish oooooh scary. Nevertheless, I have raised over $2M to date, and am halfway through our first equity round. I have talked to hundreds of investors over the last four years. I was five months pregnant when I entered Techstars last February. I’m currently breastfeeding my now seven month old son. Basically, I’ve made it as hard for myself as possible.
Contrasting my own experience with the experiences of my male peers, there’s some shit investors are SAYING about investing in women that does not jive with what they’re DOING. And in the spirit of Techstars’ “give first,” I want to help.
This has been the year of false equivalencies. So let’s start here: Yes, men and women are equal, but equal does not mean the same. In the fight for equality, we get obsessed with the idea of making sure women are treated the same. We will never get to equality — equally funded businesses, equal numbers of founders and CEOs — if we just treat women the same (as men or as we have been treating them).
We are not the same.
I know a lot of incredibly talented male founders, and not one of them can build a human with his body. Not one of them bleeds (and experiences often 8–10 level pain) every month. Not one of them has a body that is hyper-sexualized by the culture (sorry guys, not even with all that p90x). Are women equal to men in our abilities to come up with smart ideas, build teams and run companies? Hell yes. Are we the same as the men? NO. Women build relationships and teams differently, and are often motivated by different methods. Our sense of safety in the workplace is crucial to our productivity, though women have managed to be insanely productive in really unsafe work environments (Uber). In fact, the traditional notion of “professionalism” itself can create an unfriendly environment for women. More on that here.
If you’re serious about investing in women, here are some ways to work towards equality without insisting on sameness:
1. Stop talking about investing like dating. We see this in articles and investment advice columns everywhere. (Here is one from last week that I hate.) Every woman I know who is raising money is trying her damndest to make sure it’s NOT confused with dating. I learned after about 5 investment meetings to wear what looked like a wedding ring on my left hand to take a seemingly inevitable part of the conversation off the table. Then I learned that every unmarried female founder I knew was doing the same thing. When I have recounted this to other investors, they’re unanimously shocked! Chagrined! Confused! But given the number of female founders who report inappropriate behavior in meetings, it’s safe to say that every single investment fund on the planet needs to have a serious talk with their teams (and their partners and their LPs) about treating female CEOs as entrepreneurs and not potential dates.
So: to the investor who invited me to a meeting and thought it was appropriate not to be wearing a shirt when I arrived, your body is not your selling point. AND MINE ISN’T EITHER. See?
It IS possible to build lasting relationships that aren’t, like, confused for romance. A start is to stop comparing these relationships to romance.
2. “Not the same” does NOT mean “double standard.” In fact, we must fight the double standards the hardest of all. The unconscious bias that leads to success and likability being positively correlated in men and negatively correlated in women is only reinforced if we apply different standards for what can be said/what is considered “appropriate” for men and women at work. Guys, you gotta cut off the vulgar talk around the office even when women aren’t around. Don’t be a Billy Bush.
I have heard many, many male investors say things like, “Yeah, he’s a real dick, but I have no doubt he’ll do whatever it takes to make his company successful, and that’s why I invested.” I have never, EVER heard an investor brag about investing in a real ruthless bitch. (What I’m saying is that both of these are bad, but right now they’re certainly not equal and are illustrative of the double standard of what makes an entrepreneur successful.)
3. Women angel groups have a common problem: incredibly high bureaucratic overhead for very small checks. It’s typically first a lengthy application, though sometimes just a phone interview, followed by another call with some more of the angel group members. Then they decide if they want you to come to the live pitch event, which may be months away. Then a bunch of due diligence. Then they circle up investors, and MAYBE some of them get involved.
Certainly, these angel groups serve important purposes for their participants: the screening process ostensibly removes some of the risk, they handle diligence, make deal flow more manageable. However, the very process most of these angel groups employ to lessen the overall risk essentially ensures they will miss out on the hottest deals. From a founder’s perspective, I cannot possibly sink months of time, travel and planning for the hope of a $50K check. These groups would do well to evaluate the hoop-jumping to check size ratio, and consider if their LPs would have gotten where they are waiting 6 months or more for small checks.
Additionally, a lot of these angel groups want to come in after there has been an institutional VC lead. Which is to say, they want to follow the part of the process that seems to be fraught with the most bias against women. It’s a confusing position to take.
4. LPs must hold the funds they invest in accountable. If you knew that the fund you were investing in engaged in practices that — intentionally or unintentionally — left out possibly 50% of the most lucrative deals in your space, would you still invest? You must examine the culture of a fund, the way they meet and deal with entrepreneurs, the makeup of the partners. The vast majority of VC “Team” pages look…exactly alike. Does your portfolio of VC teams express much diversity? Do you think that might also represent a lack of diversity of thinking? The answer to these questions really matter. Consider that Arlan Hamilton no more than announced she was starting Backstage Capital to invest in women, POC and LGBT founders and saw a thousand deals in her first year. What are your funds doing to get that kind of deal flow?
5. Acknowledge that our physical differences may require different treatment. If we do not talk about this and change investor behavior around it, then we’ll just never get anywhere. It’s amazing to me how much energy I have watched my male peers sink into trying to figure out how to treat (coddle) their (male) engineers, and no time into how to treat the women in their companies. When my husband and I decided we wanted to have children, we didn’t get to have a conversation about who would carry the baby, given that I was running a company and he has a lot more flexibility. I have the uterus. Female CEOs in heterosexual relationships bear this responsibility exclusively, and pregnancy is an exceptional physical demand you can’t (or shouldn’t) just “push through.” While I was at Techstars Boston in 2016, and my male colleagues were proudly working 16 hour days, I couldn’t because I was building a human being with my body. If you are investing in a company with a burnout culture, that’s a particularly unfriendly environment. And I would argue the burnout culture of accelerators is a bad standard to set across the board. Being at Techstars while pregnant I believe made me a better CEO because I had to learn to work smarter, not just more hours.
6. Don’t be weird about pregnancy. When I was pregnant, I had all manner of awkward exchanges with investors — early on because I’m sure they didn’t want to make the cardinal mistake of asking me about a baby if it was just a burrito. But it continued even when I was very clearly pregnant. At the end of the meeting, the investor said “hey, so, I overheard something the other day about…you’re eating for two now?” Awkward crickets.
A female co-founder of an exceptional social good company got engaged and one of her investors said: “Oh, you’re not gonna go get pregnant right away are you?” Her male co-founder had also just gotten engaged, but no family planning questions followed. If you have business questions about what a founder’s plans are around maternity leave, or an interim CEO, this would be a really cool direct set of questions to ask. You could learn about a founder’s preparedness, her general strategy around planning ahead. You might, in fact, gain confidence in a pregnant founder if you just asked her those questions directly. It’s a great way to learn about the strength of her whole team.
7. You may have to change the way you are accustomed to building relationships with founders. I just had a wonderful chat with another Techstars CEO about navigating a particularly tough cash crunch for his company, and we were comparing notes about how we handled our respective situations. He was talking about all the investors he was able to go to because he had been “out at drinks three nights a week for the last three years cultivating relationships.” Networking events, parties, LATE nights at SXSW, etc…these are the bread and butter of developing relationships. But pregnant or breastfeeding founders can’t do this. You cannot be pregnant and go to Summit at fucking Sea. I certainly used to go to everything, every festival, every late night event I could. But it’s been 17 months more or less since I’ve been able to make it out to drinks. The burden has been entirely on me to keep relationships up as best I can by phone or other means…so…
8. Bend your rules. The first 6 months to year after having a baby is an incredible physical burden on mothers it just isn’t on men. My friend, above, is able to go to drinks three nights a week while he has two young boys because his wife is awesome and supportive. And because he doesn’t feed those boys with his body. If you find yourself saying “Yeah but you can pump,” or “there’s always formula,” or “hire a babysitter” you a) shouldn’t be making child rearing decisions for anyone else and b) don’t understand that most of us put every last $ into our companies and can’t afford childcare. Take more phone meetings, be willing to jump on Skype. Just because I can’t fly up to SV for the day doesn’t mean it’s not really important to me to meet with you.
True story: I was once turned down by a women’s angel network because I was 36 weeks pregnant and not permitted to fly so I couldn’t attend their scheduled pitch event. An angel group of women investing in female entrepreneurs made no accommodations for pregnant founders. This could have been solved with a video conference!
You may also consider it a negative signal when a founder reports they have been raising for a while. I took a big break from fundraising to have a baby. I think a more negative signal would be if I hadn’t.
9. For God’s sake, don’t ask me how I am going to keep my company going once the baby comes. Do you ask mothers about to have a second child: “What will you do with the first child, are you worried it will starve when the second baby comes?” It’s a stupid question. Like I said, don’t be weird about pregnancy.
Even as I review these tips, I still feel the fear of an intractable problem: most investors are men, most of their investments are in men — there is a rhythm and inertia to the startup universe that has been set by — mostly really young — men. That means the rhythm of the business is built to drum 50% of its MVPs (in this case, Most Valuable Players…) out of the game.
If your work is to be the best possible investor you can be — to find the founders and the teams building the products that aim to really change the world and drive serious returns — you may need to examine the very common behaviors driving away the next most profitable investment you could make.
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