December 10, 2014
Last year, Brideside was in talks with a large angel network, hoping to raise funding from them. After sharing information about their business over email and by phone during the due diligence process, they got the bad news: the angels weren’t going to invest.
Co-CEO Nicole Staple recounts the gist of their rejection: “We represent a large number of angel investors, thousands and thousands, and they tend to be men, and what we’ve found in the past is that concepts that focus on a woman consumer don’t really resonate with them. We’ve tried once or twice, they haven’t done well. So even though we were impressed with your team and your traction, we’re not going to move forward.”
Brideside is starting as a service to find bridesmaid dresses; users can get advice from a personal stylist online, try on three bridesmaid dresses at home for $10, and then send in their measurements for the final purchase. Bridal fashion is a $14 billion industry and bridesmaid dress shopping has lots of room for improvement, but it’s a pain point that women are more familiar with.
And therein lies the problem: angel investors often fund companies because they care about the problems being solved, and male angel investors simply don’t empathize with problems that are all too obvious to women. Staple says that almost all female entrepreneurs she’s talked to have had a similar experience.
About 80% of angel investors are men, which may mean that the cards are stacked against women entrepreneurs from the beginning:
“You ultimately spend more time fundraising and you might get less money than a male counterpart. That ultimately affects funding as you grow … there’s less money and time to focus on growing the business, which means it theoretically would take you longer to grow the business to a certain traction point where you’re ready to raise a series A or a big seed round, which ultimately means you’re spending more time again on your next round fundraising,” says Staple. “It snowballs as you grow, and that’s why we see such a large number of companies drop off and have such a hard time getting to that series A round.”
No one is saying that we should force angels to bring more gender equality to their portfolio – they’re giving out their own hard-earned money and are free to do what they please with it. But Staple makes the case that investing in women could be good for business – after all, women control the majority of household spending but many of the startups out there are targeting men.
Of course, there’s always those famous women investors – and inevitably, when a female-founded startup gets denied funding, they’ll be referred to someone like Golden Seeds. Because “they invest in women companies”:
“I think it’s a very sexist thing to say. That comment alone, while someone is trying to be really helpful and connect you to people, shows an underlying disconnect in the way that a lot of funds and early-stage firms focus their attention,” says Staple. “It would be a better approach to educate your angel investor base on the opportunity and highlight it as a place that is underserved.”
Despite the obstacles, Brideside did end up raising funding last year, from a group of all-male angels to boot. Now, as they try to raise another round, they’re getting comments about “female concepts” again. But Staple knows better how to talk to investors now; she steers the conversation toward the business opportunity and their core metrics. For example, 80% of the women who try on bridesmaid dresses from Brideside at home end up buying.
Staple used to work in venture capital and even started an organization called the Association of Women in Equity, at a time when it was even harder to find women at VC firms. Her advice for other female founders? “Block out the noise and keep your head down and keep pushing. If it takes you longer, it’s okay, as long as you’re building a real business.”
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