“Raising money is a catastrophic challenge for female founders, and even more difficult for black female founders.”
It’s a bold, even damning statement — one I made in a recent discussion where I speculated on what’s going to happen in 2022 for female startups, like myself.
As one of the few black female developer tools CEOs, I’m often asked to comment on big, collective social issues related to technology. It’s a lot to bear, but I realize how valuable it is to all of us to raise these issues, and my voice, when I can. But while I’d love to be able to give decisive answers, I have many questions.
Technical innovation < social progress
In the world of technology, we long to be a part of the next digital product that takes advantage of first-mover status and shapes what’s to come at the industry level. This is especially relevant with regard to the search for capital. And while we’ve witnessed some impressive transformations in the developer tools space, with VC-backed funding following suit, I sometimes worry that we risk confusing technological growth with the social progress we really need. . Women are still lagging behind. Why?
There are some great female developer founders like Nora Jones of Jeli, Window Snyder of Thistle Technologies, Edith Harbaugh of Launch Darkly and Jean Yang of Akita Software, just to name a few. There are also some amazing female angels and VCs. These are women I look to as industry leaders – those who overcome the barriers to providing or seeking funding while remaining authentic to who they are.
Limited partners should support more female VCs, and funds should offer women the same grace and freedom as men. Shanea Leven
Despite those of us trying to make a name for themselves in dev tools, the reality is that the dev tools space is mostly run by white males. For those of us who don’t meet those gender and racial criteria, simply thriving requires more attention to detail, energy and time than is often sustainable.
We need to set the level and recognize the current ways in which women have to fight to thrive. We have to ask some tough questions.
The struggle to be taken seriously
We want to be able to raise money for other people who are similar to us, right? But many female investors fight just as hard to be taken seriously as the female founders they want to support. If we all face the same social constraint – fighting to prove our legitimacy – we probably maintain the same aversion to risk.
This creates an invalid cycle in which female investors take fewer risks, especially with regard to investing in female founders, and bring in less money than their male counterparts. How can we break this circle?
Limited partners should support more female VCs, and funds should offer women the same grace and freedom as men. Female VCs should be promoted to partnerships, where they can quickly write meaningful checks.
I have personally witnessed the extraordinary results of powerful female angels and VCs connecting with others to support female founders; the community and sense of sisterhood they inspire have the potential to change the industry. We need to stick to this and scale up.
The struggle to overcome deep-seated psychological barriers
Today, there is a widespread belief that women are less aggressive when confirming a round, both as founders and VCs. As a female founder, I’ve been told that male counterparts are able to commit to larger funds more quickly – that women seem to be more risk averse, often going through the process more slowly and asking less.
So, what causes the hiatus in women? It’s probably the most obvious answer: we actually run a higher risk of rejection in the funding process. We also have fewer connections with the VC community, where the ‘rules of VC’ – what to do, say and how to act – are often confusing and counterintuitive. There’s nothing like clear guidelines for writing a good piece of code.
The fight against the numbers
Imagine you have 1,000 potential investors and only 10% of them are targeting companies that offer technologies like yours. Then only 2% of them invest in companies at your stage and 5% of them share the same philosophies – and you only have access to yet another percentage of them. Now imagine stepping into those discussions with the realization that we are ultimately people pitching people, so you have to “click” in an often too short interaction.
You will be committed to this investor for the next ten years or more. So while you’re trying to navigate the numbers — the odds against you — you’re also trying to figure out a VC’s history, personality, and perspectives. How have they been burned before? Can we empathize with their past companies and assure them that our company is a worthwhile investment… all in 30 minutes or less?
So, how can women successfully fight for funding?
The simple answer: we can’t do it alone. Like most professional endeavors, the search for funding is ideally supported by a social network. While I wish I could say that women intrinsically have everything they need to excel in the venture capital world, I believe we need allies and support that go beyond basic networking and span gender and race.
We need everyone who has a stake in the game to join the fight for women, with a focus on the challenges faced by women of color. We must recognize the potential danger to female founders and investors when operating from a survival mindset and provide them with the coaching and guidance they need to become practiced, prepared and able to speak more forcefully on behalf of a company in financing discussions. to step.
Simply put, we must rely on the ability and potential of women on both sides of the deal, with no strings attached.
And so my last question to founders and investors everywhere: are you willing to join the fight?