Office Hours: The Art of the Pitch – Female Founders Share the Truth About Getting Investors
This post originally appeared on Medium.
It’s an ugly truth: when women start their own companies they have a harder time raising money from investors compared to their male counterparts. In 2019, only 2.8% of venture capital investments went to all-female founded companies. For Black and Latinx female founders, this number is even lower. How low? Black female founders have received only .0006% of tech venture capital funding since 2009.
At Venture For America, we have the privilege of calling some of today’s leading women founders members of our community. They’re acutely aware of what it takes to run companies and of hurdles that come with raising money to help their companies grow and survive. We asked some of these female Fellow Founders to share their tips on what it takes to pitch. Their wisdom should serve as helpful inspiration to anyone starting a new business. But it also reminds us that making entrepreneurship accessible for all is far from over.
Now, about the money.
Get mentally prepared to pitch.
Agni CEO Astrid Schanz-Garbassi (2013, Providence) says “I am a huge fan of visualization. It’s quick, free, and consistently really powerful for me. On a day that I’m pitching, I might dedicate my meditation practice that morning to visualizing certain moments of the pitch: an impressed investor smiling and nodding, my co-founder delivering an insightful response to a question with conviction, a really great handshake with eye contact.” Astrid’s company makes foods to support specific life moments like postpartum recovery, period health, and menopause transitions. After several months of beta sales she closed a $2.5 million seed round in August 2019, led by Greycroft, to support an upcoming public launch. “Or I might just sit in the car with my eyes closed for 2 minutes before getting out envisioning this.”
Jamie Norwood (2015, Baltimore) and Cynthia Plotch (2015, Philadelphia) are the founders of Stix, a company that provides discreet health products for women. “We practice with each other before and go through any tough questions we’ve gotten in the past to prepare. Every pitch is an opportunity to improve and we tweak our pitch after every conversation. Our best pitches are the ones that turn into an open conversation and dialogue around the problem we’re solving, so we always strive for those types of investor meetings.”
Stay motivated in the face of a ‘no’.
In a lot of ways, it’s just as simple as remaining steadfast. When Jennifer Alba launched the Honest Company, she heard ‘no’ more than 200 times and still went on to pull in more than $530 million in funding over seven rounds.
For Jamie and Cynthia, this was a bit tougher. “It’s demotivating and concerning to hear no after no, but it’s also the unfortunate reality of starting a company. One way to stay motivated is to connect with other founders in our community (the VFA network is great for this!). Everyone is going through the same thing, and it’s so nice to know we aren’t alone. Throughout this experience, we’ve learned that one of our strengths is asking for help. We call or text with our mentors daily and we don’t know how we’d do this without them.”
Astrid pointed to a Chinese idiom that roughly translates to “Old man lost his horse, how do you know if it’s a blessing or curse?” “The story is very evocative. Remembering that each ‘no’ may be a blessing, that that team clearly doesn’t understand our vision or connect with me and therefore would not be a good partner in helping us with what we want to accomplish, leaves me feeling at peace with every no and even more energized for the next meeting, where I may meet someone who does see my and my company’s potential.”
Learn to tackle questions that you may only be getting because you’re a woman/of your gender identity.
Founders are often placed in awkward situations. It could be as harmless as tripping over a word in an informal elevator pitch at a bar and range to being exposed to extremely offensive commentary from a potential investor. This includes getting probing questions that are only being asked because of their gender identity.
Astrid doesn’t deflect these kinds of questions, preferring to address them directly. “I answer them with as much clarity and conviction as possible and hope, as with any answer that I’m giving, that it provides an opportunity for the individual to get to know me, trust me, and feel confident in my leadership and intellectual abilities.”
For Jamie and Cynthia, this was another tough one, “especially because we make women’s health products and, unfortunately, most investors are men, so they don’t have firsthand experience with the problem we’re solving for. We do our best to answer respectfully answer their question and then point to data we’ve collected or insights we have from our customers. We know we’re building something great and we have traction to prove it, so we go back to that as much as possible.”
Remember, as Astrid said, ‘no’s’ can be a blessing in disguise. You want to be aligned with partners and investors who not only understand your vision, but who also believe in you as a founder. You’re not obligated to take funding from anyone who makes you uncomfortable so you always have the right to walk away, even if they respond to your pitch with an offer to invest.
Keep these things in mind when pitching.
For Jamie and Cynthia, it’s pretty simple — “Just be yourself. At the seed stage, investors are making a bet on the founders. Our most successful pitches have been ones where we connect with the investor on a deeper level and just have an honest, open conversation. Also, for more tactical advice, do your homework and look like you have it together. The ability to answer tough questions and seem unfazed is a tough but important skill.”
It’s a one sentence statement from Astrid: “Get multiple introductions from multiple people to the same investor group.” She also says “it will be an amazing and rewarding learning experience regardless of the outcome. Also: confidence in yourself is contagious — nurture that confidence!”
Even more, Jamie and Cynthia want you to be aware of the imposter syndrome as it’s “our worst enemy here. With a lot of practice and help from your community, anything is possible.”
Lastly, don’t be afraid to walk away.
Yelitsa Jean-Charles (2016, Cincinnati) is the founder of Healthy Roots Dolls, a toy company that creates storybooks and dolls to showcase diversity and empower young girls. She advises female founders to be mindful of whom they choose to accept money from. “I said no to $20,000 from an organization that slighted me and ended up receiving a six-figure investment and winning $125,000 a few months later. Not all money is good money.”
If the terms of the deal aren’t right for your business, don’t be afraid to politely decline. Again, if a potential investor makes you uncomfortable and isn’t someone you’d want to partner with, you can always walk away.
While everyone’s experience pitching investors will be different, these words of advice from our female Fellow Founders are good to heed. What lessons have you learned when pitching for your company and can you share this information with others? Also, what resources can you point new founders to that are in the throes of their first round? Every bit helps and will play a role in helping ensure that everyone who wants to become an entrepreneur one day can.