Ladies, Your Companies Don’t Suck. Men Just Don’t Get It.
Is there anything worse than sorting through hoards of jeans looking for a pair that’s cute, fits, and matches your style? Personally, I waste hours in fitting rooms, scrounging for the perfect pair. The founder of Redenim, Kelly Ernst, tackled this problem with her company Redenim. She provided a personal interview about her experiences as a female Founder and the unique challenges she faced. It shed some light on why female founders receive such a small percentage of VC funds.
She said her largest obstacle was helping male VCs to understand how deep this problem runs for women.
“They just don’t get it,” she sighed.
Heidi Zak, cofounder of ThirdLove, a company designed to make buying bras quick, easy, and affordable (the second biggest problem facing women behind jeans), walked into a meeting with a venture capital firm with a similar problem. She had amazing metrics, skyrocketing growth, and fantastic margin structure. She was confident that she would nail this pitch. Unfortunately, she was mistaken; the VCs just weren’t interested. At the end of the meeting one of them told her “Sorry, we only invest in things we understand.”
Yes, all this is frustrating and the numbers don’t lie. Just 17% of startups in the U.S. this year have at least one women founders. Not only that, just 3% of all venture capital goes to companies with all female founders. Are VCs sexist pigs who will do anything to keep women out of business? I don’t think so (although there are some who are). Heidi Zak says the problem is that male VCs just aren’t passionate about female targeted products.
So as a woman how do you break into this male-dominated industry? Heidi says the most important thing is that female founders support other female founders. Of course this can’t replace venture capital; those checks are hard to beat. But other founders can provide feedback, mentoring, and networking opportunities. Another big problem with venture capital is that most VC and founder introductions come from “warm leads” where a friend or partner introduces the investor to the company. That means male founders have an advantage right off the bat.
The other problem is that there are few women in venture capital. Most women are at the associate or analyst level. VC firms need to promote women so that they have a seat at the table, and the firm benefits from the “no brainer” idea that diversity makes better investment decisions. You can’t teach a blind man color, so men need women at the table to tell them the value they can’t see.
There’s a lot of work to be done for women in business. Don’t get me wrong, there are are women founders out there who are incredibly supportive of one another. If you are a woman with a business idea don’t be afraid to reach out. Work together. Succeed together. Find progressive VCs who understand this problem and work with women founders. Those percentages will go up.
Follow Heidi Zak and Kelly Ernst on Twitter: