How women entrepreneurs are raising funds against the odds

We’ve all heard the horror stories from women leaders in tech – wear a wedding ring to investor meetings. Bring a male team member to make people (read: men) in the room more comfortable – but be ready for every question to go to him.

Founders Network has 2x the women members of any other professional technology association, and we asked this group of successful female founders their one piece of advice for women learning to navigate the world of tech leadership.

Their answers turned out to apply to any man or woman working in high tech who wants to learn how to “not get into bed with assholes.” Here’s a top-10 list of do’s and don’ts from the women of Founders Network – actionable advice on how gender plays into team development, business building and fundraising.

10) If you ask for advice, you get money; if you ask for money, you’ll get advice

“The amount of time you’ll spend on your deck, and the amount you’ll change your deck, is mind-blowing,” Meghan Conroy (Sept. ‘12) says. “Asking people to run through your deck with you and give you advice often leads to money – the people who want to fund you will tell you clearly that they want to be involved.”

Conroy launched 14 products into the medical market before founding CaptureProof, a secure platform for patients to share photos and videos with their doctor. A TechStars alum who’s raised $3M, she was one of three experienced (and funded) women entrepreneurs from the Founders Network who led a forum on “Raising Your Seed Round” in August.

Conroy says that women in particular struggle when it comes to asking for money.

“It feels like,‘Oh my God, will I ever pay that back?” she says. “The guys see it like they’re giving a lottery ticket to their friends – letting you in on this amazing opportunity.”

“Fix your mindset: you’re not borrowing money to pay back, you’re giving someone an opportunity to be part of something that is going to change the world.”

you’re not borrowing money to pay back, you’re giving someone an opportunity to be part of something that is going to change the world tweet

9) Wear a ring. Bring a man. Do what it takes, but don’t let that get you down.

Phoenix Gonzalez (Jan. ’13) has raised almost a million dollars as cofounder of Dotstudioz INC – her startup provides management, monetization and tracking tools for content creators. She recalls a recent experience with ire: walking into one VC meeting to find that they patently expected to meet a male “Phoenix Gonzalez.” Not a woman. Not a black woman. When they asked where her CEO was, she knew the meeting was over.

Faced with an uneven playing field, women like Gonzalez have found ways to fight dirty. Emily Best (Nov. ’13) wears her grandmother’s ring on her ring finger.

“That hasn’t stopped me from meeting with a shirtless VC, getting comments on my appearance, and getting sexual advances,” she says. “But it does start the conversation with some things off the table because there are assumptions made.”

Before raising $1.5 million as founder of Seed&Spark, Best was named a 2014 New York Woman of Influence, and produced her first feature film in 2011. Her startup offers an end-to-end solution for filmmakers and film lovers to fund, promote, and watch films in a virtual studio and cinema.

8) Find the people who’ll have tough conversations with you, about sensitive subjects.

“If you know the big vision of your business, it’s much harder for them to sway you,” Best says. “Surround yourself with people who will give you great, honest, ruthless advice and make good connections for you.”

“You should have a mentor who you think is kind of an asshole and asks you questions that make you think, ‘what a jerk,’” Conroy says. “They’re setting you up for success because they’re asking you the hard questions.”

As CEO of Astia, Sharon Vosmek has grown an accelerator-like program that links women-led startup teams to advisors, resources and investors. And as a member of Astia Angels, she manages a portfolio of high-growth companies with one salient feature in common: one or more women leaders in the c-suite. Discussing unequal expectations in tech can be a taboo topic, but she wades in (that’s her job).

“I cannot tell you how many men and women in the valley think this is a non-issue – they believe it’s a meritocracy, and to have this conversation – they’re going to shut down,” she says. “Just know the environment. Arm yourself with all kinds of great resources, like your network around you.”

“We have Founders Network to share conversations that are not always easy or popular to have,” Maria Fernandez Guajardo (Feb. ’15) says.

After cofounding MagneticWill, a social fitness platform, Fernandez recently started a new job as head of product for a foodtech in stealth mode (spoiler: they do DNA testing on food – the modern supply chain means that often people don’t know what’s in the food they eat). She helped organize the Female Founders group as a place for salty conversations and even that theoretically un-female word, “no.”

7) Say no. As often as you need to.

Meghan Conroy, CaptureProof’s founder, saw the good and the bad in fundraising: an accelerator program’s funding requirements lit a fire under her to raise $250k. Closing a million in convertible debt created a serious runway – but also accrued interest that was going to start to add up. She went to VCs early, when CaptureProof was more idea than reality, and says she’d wait longer next time to show all her cards.

Going against advice and turning down a concrete offer from a VC firm last year taught her that “some of the most critical things you will do for your company involve saying no at the right time.”

After three years of building off revenue and bootstrapping, Gonzalez decided it was time to raise an angel round and grow capacity. She considered an accelerator that charged $350,000 and 10 percent of the company – it wasn’t going to work. But she walked out of that interview and into a client meeting where the client asked, “Are you looking for an investor?”

“Literally another door had opened the next day,” Gonzalez says.

Aggressively negotiating term sheets, deciding how far to compromise in an angel round, she relied on advice from a law firm with a good reputation – but in hindsight, she says, “don’t believe anyone who tells you that ‘we can clean it up when we get to Series A.’”

Once a signed agreement goes in someone’s pocket, it’s going to be hard to go back. Only agree to a deal you can love. Here’s her cheatsheet of times to say no – and when to bring out the yes.

6) Don’t:

  • get shackled to in-kind investments. They won’t necessarily give you the opportunity to build what you truly need – or at a market value.
  • bend too much when it comes to taking a short runway. Hold your ground about the time you need not just to raise money, but to set milestones for traction for your next round.
  • sign documents until you’re done negotiating. Have the gumption to fight for what you believe in.

5) Do:

  • Create proofs of concept and a development cycle that shows, in detail, that you know what you’re up against. Before you go out and raise.
  • Find a great law firm, who will take your call even if it is 8 a.m. on a Sunday, and you don’t have money yet.
  • Demand a founding team that stands up for each other, no matter what happens.

“We have a great dynamic – two female founders and a male founder,” Gonzalez says. “We’re fortunate because we have a man who is steadfast in what he believes in and two women who are business-minded but able to look at the other side of the table, and find a solution that is equitable for everyone.”

4) PITCH TO STRANGERS

In September, Lisa Lambert (Intel Capital) and Sharon Vosmek (Astia) represented VC, Seed/Accelerator and Angel investing experience at the panel discussion “Funding Women in SV and beyond.”

They bring domain expertise as investors in consumer internet, life sciences, cleantech and e-commerce – but above all, in funding and supporting female entrepreneurs in Silicon Valley and beyond. And they want women to start catching up when it comes to unabashed introductions.

“The use of the term ‘referral’ in Silicon Valley generally is a way to keep out diverse groups. I don’t need a referral, but I need you to take the time to get to know me as an investor,” Vosmek says.

The use of the term ‘referral’ in Silicon Valley generally is a way to keep out diverse groups. tweet

 

Lambert echoed this “do your homework” requirement. Come to a meeting not just knowing her firm, Intel Capital – but also know why your business fits Intel Capital. That’s more important than the best warm intro.

Intimidated? Start small. Angel-stage investors often begin by pitching friends of friends.

“When the first two angels who weren’t already known to me came in, it made me feel like I could do it,” Best recalls. “I think it’s important to pitch angels you don’t know.”

3) Raise more money than you think you need –

Once those conversations start, don’t shoot yourself in the foot.

“I was going into VCs saying I needed $300k and they were like, ‘that’s cute,’” Best says ruefully.

“If you ask for small money they think you have a small idea,” Best says. “That’s something men do really well. I’m seeing $9 million seed investments pre-product in LA right now – guys are saying they need 2 million just to get this off the ground. And I had community, product, some of the most successful crowdfunding in the world, and I couldn’t get a meeting.”

“Imagine the possibilities for your biz – the way it explodes if you have the money you need and the talent you need – that’s the business you pitch,” Best says. “You have to have the really big vision in your mind from as early as possible, and walk in and say, this is what we’re going to do.”

“People say raise for revenue positivity – forget that, raise for growth,” Best says. “Women are known for running small, nice businesses. Men raise for growth.”

2) – and only from people you love

Your investors are going to be your close business advisors. Only go into business with people you’re going to be happy with.

“You’re getting married for a long time,” as Best puts it.

That’s a value shared from the other side, by investors like Angel Investor Sharon Vosmek.

“I invest very passionately, I do deep diligence and learn before I invest, but I am a relationship person,” she says. “My favorite is when I can see how I’m going to be helpful to the individual and the business.”

1) Forget the asshole factor. In the end you still need to be investor-friendly

Women leaders get a bad rap – too nice and they’re passive, or candidates for dates, not funding. Too assertive, and they’re bitches.

“Someone told me I’m pushy and I said, ‘yeah, I’m a CEO – you want me that way,’” Vosmek says.

“Someone told me I’m pushy and I said, ‘yeah, I’m a CEO – you want me that way” tweet

But that doesn’t mean adopting an abrasive attitude is going to win the day, regardless of how it plays out in an episode of Silicon Valley.

“I’m never impressed by someone who comes at me in an offensive way,” Lambert says. “Be professional, be respectful.

“I invest in people I like, so I’m really not a fan of arrogance,” Vosmek says.

Even when faced with what feels like a rude interrogation, don’t get ruffled – dig in. Harsh questions often deserve an answer. And, Vosmek says, that means someone engaging. That’s a win.

“The worst is when they stare at you and don’t get it enough to ask a question,” she says.

Ready to learn more? The women of Founders Network are gathering again at an upcoming Female Founders get-together in San Francisco Oct. 9. RSVP here for a night of wine and mediterranean meze hosted by Neha Sampat.