It would seem that many view the world as being different for male and female founders. I was asked if there was specific advice I would give to female founders who were fundraising, so I thought I would share my views.
Tl;dr: There is no difference. Women are not a subclass of founders. No one is out to get you. If anything, it’s easier to raise for a female than a male founder. You just need to go through the same crap everyone else has to.
Everyone is equal in my eyes
I fall into this little camp that treats everyone equally, purely on results and intellectual factors, and severely resents the notion of being a ‘female’ founder.
I’m not a feminist or some lame apologist. I just know how hard startup is and what it takes… and that most people aren’t cut out for it / will fail. Those that do make startup work deserve respect.
You are either a founder or you are not.
If you really have built a company, with a team, traction and the like, you deserve the title of ‘founder of the year’ NOT ‘female founder of the year’. The market doesn’t care what genitals the founder has. Customers are who you are competing for with your product.
The most successful female founders I know (My friends) DO NOT identify as being a sub-class.
They just founded a startup like anyone else and have been grinding to make it work.
I’ve stayed in a founder’s house in Bangkok when she was working nights before she quit her job mapping out layouts at midnight for her app, and I helped her raise 3x what she asked for when she had traction. She’s just my buddy, she’s not a ‘female founder’.
She’s also married to a woman, so does she deserve the title of a lesbian female founder? Fuck no. I think everyone would agree that it is ridiculous, so why does the title of founder need any other appendage?
I work intimately with a lot of founders to help them with their fundraising, writing their deck from scratch, do financial models etc. That’s a really personal relationship of trust. I get told everything.
I have noticed a key difference with some of the women vs some of the men, though.
Before I talk about it, I want to assert there is no specific advice to ‘females’ on how to raise. The exact same basics apply.
- You are not a sub-species.
- No one is out to get you. Raising is just hard
- No VC is going to pass on a ‘vc fundable’ company because you are a girl
- Normal ‘male’ VCs are not grabby
It’s total BS.
OK, I have two pieces of advice now specific to women based on my observations:
1/ Have more confidence and ask/take what you want
I do high-end work, so my sample size is people who can afford me. The women I work with (like men) are normally older so have had kids (and exits) or have been out of work a bit, but now want to get back on the pony. That’s totally not always the case, but let’s just assume it is as I think it’s something women, in general, could grok, even if they are in their 20s.
I find many women lack the exuberant confidence many men do and don’t set their goals high enough (Of course this is not the rule! I know many women who are basically men, but more fun). In VC, you need to be insane to generate the returns VCs need.
Explained: A meaningful startup exit strategy is not the same thing for venture capital –
Women more often almost apologize for wanting success and big goals and don’t have the confidence to back up their claims.
Her confidence in backing up her potential revenue outcomes
I had one client- I don’t want to name her as I’m sharing emails word for word – for whom I’ve pulled out some of the relevant email quotes to illustrate.
We talked about how much revenue she could generate. We got to $100m ARR in the UK alone. There’s no reason she couldn’t feasibly achieve it if she really kicked ass. But she can’t back it up when she gets pushed in meetings with investors. The feedback is “that’s too much”.
No, it’s not. She just can’t sell it.
From her pitch at a trial demo day with investors:
Feedback from an investor (she emailed me it- this is one quote from a long list):
Good looking presentation but focus on improving presentations skills… Face audience… eye contact is key. More information about what you can do for the agencies.
Ok, my guess is you have low confidence? Most of the people at [xx] are prob tier 4 people, so start building up some arrogance- be a 10% dick. Why should you defer to them?
You prob were v different in [Bank]? Maybe a bit of a dragon. Why not try treating the audience as minions in IBD? You would have been comfortable then, right?
Thanks for looking over Alexander and your comments.
Yes, I agree, I very much need to spend the time practicing, here, there, everywhere!
You made me laugh, I was a bit of a cold dragon at [Big bank]. I had to be!! Oh, it seems like a long time ago. Gone far too soft now, spending way too much time with kids (although they do know who is boss, I have a very menacing and disapproving stare 🙂
Women generally have a lot less ‘ask for more’ perspective than guys and the wherewithal to back it up.
Confidence in salary negotiation
Let me give you a non-fundraising example.
I was at a house party talking to a girl who maintains the history of London. She said to me
“I’ve been offered a job with a range between £30–50k. What should I ask for?”
“£50k. I can negotiate from there.”
“That’s interesting. I asked all my GFs and they all said £30–35k. They didn’t want to ask for too much. When I ask my guy friends they all said the same thing basically.”
As a founder, you need to be a bit of a dick. You need to know what you want and not be ashamed to ask for it.
Here is a real quote from a chat with a VC that reviewed a company I sent her:
Show hunger and urgency that you need to achieve something. Super confident, intense, slightly a dick (she is taking about Oli Samwer). [Famous founder] is a tiny bit of an asshole too, and it’s not bad in a way. Be 10% of an asshole. You want to back an outlier to make big money. You can’t be a nice guy all the time.
I wrote notes from a real VC feedback call and that’s one of the bullet points. Real VC feedback on a founder’s startup –
When I give feedback to men, I still need to explain how VC works, why they need to do certain things and they have the same questions as women, but men might be more willing to do what I say- to a smaller extent. I don’t know.
My sample size is only so large, but it is what it is.
Women are no less dedicated bla bla, but I do notice they need to be pushed a bit to be willing to take what they want.
So have more confidence.
Ask for more than you think is reasonable.
Take what is yours.
I don’t need to explain this to my female friends who don’t have limits though, so I don’t want to assert this is for all women, and it applies to a lot of men too.
But if you be 25% more aggressive, you are more in the ballpark you need to be.
2/ No one is out to get you
This is crap advice, but it’s also not.
I just hate that I have to say it, but I have to. I’ve talked to enough women (including my family) to understand they don’t get it.
There is this female echo chamber to explain why women don’t get what they say they want.
It’s that men are out to get them and that’s why they don’t get it.
It’s a limiting belief. F*** that shite. Take what you want.
Here is a real example (from a family member):
“Before, I would have slapped you, but now I’ve seen how women clubs work, I hate that you are right. Everything you say is true and I hate you for it.”
I’m not going to add further because the environment is such that saying anything that argues with prevalent dogma is tantamount to “killing anyone with glasses as they are academics”.
No one is out to not fund startups with female founders.
I can sincerely tell you I mentor VCs who are stressed out about allocating capital. They need to fund companies and “but she’s a woman” is never something I have ever heard once. These GPs are occasionally gay too if that matters.
Frankly, there just aren’t enough female-founded companies. To be a founder, you just quit your job, recruit one or two people and hustle.
If you have crazy traction, a great problem to solve in a huge market, a defensible model… a VC would be literally insane not to fund you.
A VCs job is to fund those companies.
Fine. I’m setting myself up to be burned. Whatever… there’s no stopping Alex…
A lot of women who complain about not getting funded by male VCs, just have crap startups that are not fundable.
I have dealt with this in detail (for free) twice by women in their 40/50s who were totally fixated on the fact being older and female was the only reason. There couldn’t be any other reason…
- One just had a crap business (think a crap Groupon). She killed it and is working on something else now involving taking advantage of gov grants… and seems to be happy now. I helped with that by getting her to kill her crap startup.
- Another has a potentially interesting startup, but the money comes from charities (which no one understands- yes they have money!) and she frankly doesn’t make much revenue. It comes from one-off custom app development. It should be SaaS revenue but she wasn’t doing that. No MRR! Her revenue model was total garbage. She still hasn’t figured it out. She’s still not fundable. She still blames men in comments on Medium though. Privately she agrees with what I say but doesn’t fix it.
Neither cases were ‘men out to get them’, they are just crap/unvalidated/unfundable startups.
If you are actually VC fundable, no one is out to get you.
Like 99% of startups, you:
- Aren’t fundable
- Have a crap team (The real reason founders aren’t being funded you will never hear a VC say / Investible founding startup teams for fundraising)
- Not enough traction
- Pick a real reason
Views from a female Sequoia investor
Jess Lee is an investor at Sequoia Capital. Prior to that, she was cofounder & CEO of fashion app Polyvore. On Quora she wrote a post on the advice she gives to female founders.
To summarize, here is the key fundraising advice I give to women, which addresses some of the common mistakes female founders make:
Sell the dream. VCs make returns from maximizing upside, not from minimizing downside. Make sure you dream a little and paint a picture of how big the company could be one day, even if it’s a vision 10 years out.
Sell yourself. This is the moment to brag a little and share the things that make you uniquely equipped to win your space. Many women express discomfort at doing it, but it’s important for investors to know who they’re investing in and why they’re special.
Base case and upside plan. For the 5 year P&L slide, I’ve noticed women are more likely to say “…and even with the most conservative assumptions, this will still be a $100M business in 5 years”. Whereas men are more likely to use aggressive assumptions and not caveat it. Just be aware that VCs are comparing the data points they see across pitches. So if you’re going to present the base case, I’d recommend you also include the upside case. This part of selling the dream.
If you read the above, you can summarise it in the first main point I made “Have more confidence and ask/take what you want”.
My views on these three points
Here are my views on the three points she made. Unsurprisingly, my comments apply to any founder.
1/ Sell the dream
This applies to everyone.
No one does it well.
For example, I invented this slide called ‘range of values’.
You don’t share forecasts as an early-stage company. Everyone knows they are BS.
What you do instead is have a discussion about how big you could be under logical assumptions. You numerically show the dream.
This is a real but bastardised example of a slide. It’s a basic version.
In decks, I don’t sell. I present logic. At the end of the range, you are illustrating the Facebook outcome at the top end results. With the ‘older’ girl I mentioned, that was about $100m ARR in her current market (to show focus).
She said to me that was totally possible. Our slide had a lot more detail with % of the market and how many agencies we would have. But she doesn’t sell it well. We had the numbers and logic, but she didn’t have the confidence. (So far. Working on that).
It’s one thing to have a vision, it’s another to have the numbers and another entirely to have the ability to sell it with conviction.
Learn about confidence: Founder confidence. How you answer investors’ questions matter as much as what you say when fundraising –
2/ Sell yourself
This is true and the core point of this post.
You need to sell yourself and not be ashamed. But you want to do it humbly. Guys don’t brag in pitches (well the smart ones don’t).
You have to show investors you are a badass, connected, you can hire, you are an industry insider, but you want to insinuate it.
Show don’t tell with data.
70% of the investment decision is the team. Why are you the best possible team to invest in?
Investible founding startup teams for fundraising
3/ Base case and upside plan
I don’t put financials in the first deck for the first meeting, if you are early.
I disagree on “…and even with the most conservative assumptions, this will still be a $100M business in 5 years”.
This is a logic question.
Most founders haven’t done the logic. I have to teach them it.
Most of my clients aren’t dumb- they have had like 2 exits etc. When I reference founders, they have already demonstrated they can do it.
I’ve made a tool to help you answer this question.
It’s a profound exercise that starts with a question I should almost trademark “How much do you want to sell for?”
How to forecast your fundraising till you exit –
Come on. Most people struggle with one model case, let alone 3.
I tell founders to ask for what you need, then you might get what you want.
But you do need to know how to spend the want and need cases. You need to be able to debate the differences in cases.
When I did a round with a female buddy of mine raising 3x the ask, we asked for what we needed and got the 3x want, as VCs said:
“You could do a lot more if you raised more”.
“Yes. Yes, we could 😉.”
Then we showed them how.
I don’t really think that men caveating less is necessarily true. It’s a common symptom of anyone without confidence and logical forecasts. What I do know for sure is I’ve never met a founder who had an amazing model and plan! Well that’s a lie. I’ve seen one.
Everyone is insecure on this stuff.
Sure, maybe women present as less confident, I just don’t have a sample size to argue. I don’t work at Sequoia and I don’t care to pick up the differences between men and women as I frankly don’t give a shit.
I just know I’m a big data nerd and I’ve never met anyone who was 100%… and famous investors/founders learn from me on my blog.
Raising money is hard for everyone.
Most startups don’t raise.
Take what you want and don’t apologize for it.
No one. No one is stopping you. Do not ever believe that.
Most people are average. Average does not get funded.
You are a founder. You are NOT a female founder.
If you really believe you are fundable and are not getting funded because you’re a girl, email me. I’ll tell you if you are full of shit or not.
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