Getting your pitch down, dealing with rejection, the stress of waiting for the big check and trying to make payroll are just some of not-so-fun parts of raising capital, but for many, it must be done.
These days, more women founders and cofounders are going to be listed on the pitch deck and be the ones pitching investors for money to build their business. While some accelerators, investors firms and groups around the country actively seek out female founded companies, in the boardroom there is still a perception and belief system about risking their money on women and if the company can provide an ROI. In a study by First Round Capital, women founded companies were shown to outperform their male peers by 63 percent.
We asked four female founders of various capital milestones their advice on raising funds and how to approach the investors when pitching their company.
Prepare, Prepare, Prepare
Just as the heading says, preparation was among the number one thing to do before you head through the boardroom doors. Even then, you’re going to face questions you didn’t expect and it’s important to keep your cool. Aly Saxe, CEO and founder of Iris PR who raised an angel seed and venture round said,
“Make sure to have a really good deck and shouldn’t be more than 10 slides. You also need to be prepared to pitch your startup in 30 seconds or less. Be prepared for a lot of questions you might not think are important, but they are important to the investor.
Know Your Audience
Looking on an investor’s LinkedIn profile is not enough to know exactly who you are talking with. You need to keep digging. Karen Frame, CEO and cofounder of Makeena who has raised capital via crowdfunding, angel, foundations, family trusts, accelerator programs and SBA-backed loan, said,
“Understand who you are talking with, what types and stages of companies the investor invests in. [Also,] talk with some founders who have been funded by the investor.”
Don’t lose Your Cool
If you do enough pitches, there will be moments during the meeting that will make you bristle and want to fire back, don’t. The most important thing is to keep your cool and balance arguing versus defending your product. Maryann Guerra, CEO and cofounder of Aesthetics Biomedical who raised an angel round, said,
“Do not B.S. investors, they will see right through you immediately. [If you need to defend your product, use] facts and data, and avoid arguing with investors if they disagree with your presentation or points in your presentation. Focus on the product features and benefits.”
No matter what, stay composed and don’t lose your cool.
“When an investor asked an off-topic or offensive question – questions that I thought were ridiculous and I was getting annoyed – it may mean that that the investor isn’t right for you. Don’t let yourself get defensive and argumentative, it’s OK to debate, but steer them to the conversation you want to have and don’t fight with them,” Aly said.
The Belief System is Slowly Changing
Ask any female founder who has pitched for money and there will be at least one story about experiencing bias. Unfortunately, until more investor firms take a stand and discontinue inappropriate practices and tech bro mentality, there will continue to be incidents like these. Women founders need to choose investors who will support diversity and help them build their business.
“I think there is just a baked-in mindset with investors that women are different, and we see it in the data, and they approach the opportunity and meeting differently. It’s rooted in a belief system that has to be changed,” said Aly.
But women founders aren’t giving up. Maura Kolkmeyer, founder and CEO of Sitterly.CO, an early-stage company, said,
“If I have to pitch 150 times more than the man next to me, then my pitch will be 150 times better and my company will be 150 times smarter. I am an optimist and see the value in the challenge, I believe being underestimated is a huge advantage.”
We asked our women founders to share some overall advice that helped them raise capital.
Be patient. Don’t whine. Don’t blame others. Make it happen. Be scrappy, bootstrap and get to the next level to hit your milestones and prove your model. – Karen
Focus on your business, your customers and provide value. – Maura
Raising money is hard. Be tenacious and keep at it. It’s going to take a long time and you’ll get frustrated, and that’s normal. – Aly
In your investor meeting, be quick, be good, and be gone. Know the market and how the product fits in. Tell them how, and the timeline for, an anticipated ROI, and do not overpromise. – Mary Ann