Female entrepreneurs can find it a challenge to get funding, particularly when it comes to finding venture capital, reports suggest.
The most recent UK Venture Capital & Female Founders report found that in 2019, companies with all-female founders had the slimmest chance of getting financial backing.
They got 1p out of every £1 of venture capital investment, while mixed gender teams got 10p and all-male founders received the lion’s share at 89p.
So, is it a case of gender bias or are there simply fewer female founders to begin with?
All female founders typically find it more challenging convincing a panel of male venture capitalists to invest in their business than their male counterparts
Jasper Smith, chief executive of venture capital business Vala Capital, believes it’s a bit of both.
He says: ‘There has been an inbuilt bias in the venture capital industry – the net result of which is that fewer women get VC backing than men, and subsequently there are fewer proven female entrepreneurs.
Jasper Smith, CEO of venture capital business Vala Capital admits there is an inbuilt bias in the industry
‘Management teams and boards are becoming more diverse, but at a leadership level the money generally goes to entrepreneurs with proven track records – and they are more likely to be male because they have received most financial backing in the past.’
Globally, there has been a drop in venture capital funding for women-led start-ups.
In 2019, 2.8 per cent of funding went to women-led start-ups, but in 2020 that fell to 2.3 per cent, according to business information website Crunchbase.
The data also revealed that globally, more than 800 female-founded startups received a total of $4.9billion (£3.53billion) in venture funding in 2020 through mid-December – a 20 per cent decrease on the same period last year.
Getting more female founders to partake in pitches is an industry-wide issue – but biases can certainly be dealt with on an individual basis.
Here, five female founders share how they dealt with gender bias and sexist comments during pitches, and offer tips on how to deal with similar scenarios.
‘I was asked when I would have a child’
Brittany Harris is the co-founder of Qualis Flow, a construction tech business.
She has had unfortunate comments ranging from ‘How do we know you didn’t get this pilot because your boyfriend works on the construction site?’ to ‘You’re not going to go and get pregnant now, are you?’
Brittany Harris (left) founded Qualis Flow, a construction tech business, with her co-founder Jade Cohen. She was asked about her ambitions to have a family when she pitched for funding
Harris says: ‘I think the one that we found most shocking and frustrating was in a recent investment committee where one of the partners, who was responsible for diversity no less, explicitly asked our male mentor when he would sell the company.
‘Our mentor, although shocked, effectively redirected the question to me which I answered.’
Tip: Address the maternity question head on
Harris recommends not being afraid to deal with questions about starting a family.
‘If we never talk openly about maternity leave, it will never be seen as something that we can plan for, and take ownership of, and female founders will always be dealing with this alone, and without the support they deserve,’ she says.
‘They think I’m there to get coffee and coats’
Alexandra Smith is the co-founder of The Sustainability Group and says that funders often think that co-founder Mike Penrose is her boss
Alexandra Smith, co-founder of consultancy The Sustainability Group, says she often has to point out that she is an equal partner in the business and that she doesn’t work for her co-founder, Mike Penrose.
She says: ‘There is always the assumption that I work for and not with Mike. I am interrupted more often when speaking and explaining our product and services.
‘There is often a question asked to Mike to ‘back up’ or verify my words.
‘I think for both of us, being in an equal position, the differences in how we have been treated have become increasingly obvious, sometimes amusing and often frustrating.’
Tip: Communicate that you are the boss
Smith says: ‘When there are assumptions that I work for my business partner or I am there to get the coffees and coats, it is important to make it clear that we both lead the business and have the authority and the knowledge to be in the room.
‘We do this as part of the internal and external communications, ensuring equity and parity when we speak about our organisation and the leadership.
‘When we are in a room with people, it is important to judge the situation, be polite, but also clarify and correct.’
‘Women selling property wouldn’t be taken seriously’
Vivienne Harris, founder of estate agency business Heathgate, was rejected for funding because ‘women couldn’t sell houses’
Vivienne Harris, founder of estate agency business Heathgate, says that she was rejected by funders when she started the company over 30 years ago – but that one of the individuals who turned her down has since become a client.
She says: ‘They refused me on the grounds that if a woman came to their house to sell it they would not take her seriously, and that the residential property industry is known to be a male-orientated business. Actually, the second point is probably true even today!’
Tip: Go elsewhere for funding
Harris says: ‘My company has been successful for the last 31 years – as they said in the film Pretty Woman, “Big mistake, huge!”
‘I decided not to take any notice, I trotted off to the bank, saw my male bank manager who agreed to give me the seed money I needed, and the rest is history.
‘I sometimes still bump into one of the men that refused me then – he admits that they made an error of judgement and has in fact given business to me over the last 15 years. At one time he was even my best client.’
‘Women over 50 aren’t interested in “nice” underwear’
Eleanor Howie is the founder of a brand called Valiant Lingerie, which creates empowering post-surgery lingerie for women who have had surgery for breast cancer or had preventative mastectomy.
Eleanor Howie had to busty some myths about women over the age of 50 to convince investors to take her seriously
She says: ‘I was pitching to one individual who told me that he didn’t think mine was a viable business.
‘He said these issues don’t impact people under the age of 50 and, according to him, women over the age of 50 aren’t interested in “nice” underwear.’
Tip: Be prepared to dish out facts
Howie says: ‘I was able to calmly explain the numbers behind the business – the number of breast cancer diagnoses both in the UK and worldwide each year, the number of women who have surgery, and the numbers of women within different age groups. I was also able to explain my plans for the future of the business.
‘Firstly, ensure you know your business and your numbers inside out, and secondly do not let yourself feel shaken or let imposter syndrome take hold.’
‘They told me to get more tech experience… then funded a male with no tech experience’
Haifa Barbari is the founder of life and love coaching app Be What Matters.
She says: ‘I was told by a male investor that as a founder, I needed to have tech skills. He said funding a solo entrepreneur like me ‘simply won’t happen’ and that I would struggle to find anyone who would invest in me.
He told me to ‘to go and learn some coding or find a chief technology officer.
‘But the next male who pitched, who was also not a technical founder, received the investment.
‘He was a business-driven founder with a marketing background like me. I was disappointed to have been treated differently in 2021 despite having the same profile.’
Tip: Don’t give up
Barbari says: ‘Reframe the injustice to maintain strength in yourself, by seeing the sexism you are witnessing as dodging a bullet. You wouldn’t want that person investing in your business in the first place.
‘Use it as extra motivation. Tell yourself every day that you are going to keep going, and while it might take you longer, giving up on yourself is not an option.’
3 tips to perfect your funding pitch
1. Be confident and passionate. Jasper Smith, CEO, Vala Capital says: ‘You tend to back people that are really confident in presenting their idea. No one knows whether an idea will be a winner or not. But the confidence in which you can deliver your idea is a key indicator. If you can sell the idea to me, you can sell it to somebody else.’
2. Know your numbers. Stella Smith, founder of employee benefits firm Pirkx, says: ‘My advice would be to read up, find a programme like the incredibly helpful Mayor’s International Business Programme; or a programme run by venture capital funds, your bank, or an association in your industry.’
3. Solve a problem: Shaun Rutland, co-founder of Hutch Games, a mobile racing game company, told Startups magazine: ‘The pitch is laying out the problem you’re trying to solve and the size of the marketplace. It’s also backing up the pitch doc with how your experience and team qualifies you to tackle that problem.’
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