April 13, 2015
When sisters Donna and Rosy Khalife were raising funding for Surprise Ride, a monthly subscription box for kids’ activities, mentors told them to bring on a male cofounder so it would be easier to raise funding. But they resisted this “easy” solution – they wanted to recruit the smartest people they could find, regardless of gender.
But the Khalifes found other ways of making an impression on VCs. Through a rejection on Shark Tank, a seed round of $100,000, and a larger seed round of $650,000, they learned how to subtly tweak their pitch – tweaks that probably wouldn’t be necessary if they were men.
“Whether you’re a woman or a male founder, tweaking your pitch is part of the process of fundraising,” says Donna. “What I do mind is that I have to think about those things and also have to consider the psychology of fundraising and gender biases. That just adds a layer of complexity that I wish we didn’t have to worry about.”
Below are some of the extra tweaks they felt they had to make because they’re women:
1. Emphasize innovation
Surprise Ride’s subscription box delivers fun activities and snacks every month to kids ages 6-11. Each box has a surprise theme, ranging from geography to art to Amelia Earhart.
How innovative is this idea? According to a study published in Social Forces, investors may hold women to a higher standard of innovation than they do men. When participants were asked to rate ordinary and innovative pitches for companies led by men and women, they were less likely to invest in the ordinary women’s pitches (compared to the innovative ones). That result isn’t surprising; the surprising part is that they weren’t less likely to invest in ordinary pitches by men (compared to innovative ones). When women pitched something ordinary, participants rated them as less skilled and competent, but the same effect didn’t hold for men.
“When a woman proposes the same idea [as a man], she can expect others to simultaneously be looking for cues that she in fact possesses the types of skills and traits needed to make a venture a success – abilities she’s often assumed to lack because of her gender,” wrote study author Sarah Thebaud of UC Santa Barbara. “Women have to work harder to prove to others that they have what it takes to run a successful startup.”
2. Focus on the numbers
A similar dynamic may be at work when it comes to numbers. Having worked on Wall Street, Donna is comfortable busting out the spreadsheets and talking about profits and revenue, month-over-month grow, and long-term projections. That kind of facility with numbers may be a skill that investors are more likely to assume men have, so women are forced to overcompensate.
“As a woman, you’re expected to be able to justify the numbers a little bit more than your male colleagues,” says Donna.
Another tactic that Donna has found helpful is making lots of connections with successful female entrepreneurs – then talking about those connections during her pitch to VCs. She thinks it gives VCs comfort to see that you have proper guidance, and makes them believe that you might follow in the footsteps of those successful women.
“As a male, you can stand behind your presentation and your pitch and not have to do as much of the name-dropping. But sadly I’ve found that every time I’ve done [the name-dropping], it has worked to our advantage,” Donna says.
4. Talk about the team
Entrepreneurs typically add a slide called “Team” in their VC pitches, showing the cofounders and their qualifications. But over time, the Khalifes modified their slide to include the whole team, not just the two of them. They observed that VCs were worried about women being “lone rangers,” working on their own and not bringing on enough people to help.
Despite all this extra work, Donna is quick to point out that women have an advantage when raising funding: being different.
“If you can deliver an equally strong pitch as the male counterparts, you have the potential to stand out more, and that can really work to your advantage.”
Did you like this article?
Get more delivered to your inbox just like it!