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Women entrepreneurs have long received a small portion of venture capital funding.
Female VC leaders are trying to change that.
Indeed, there are many opportunities for “entrepreneurs,” said Julie Sandler, executive director of Seattle-based startup studio and venture capital fund Pioneer Square Labs. She spends most of her time running the VC arm PSL Ventures.
“First, the startup funding market for founders has never been as cheap as it is today,” she said.
“Second, there has never been a moment in this generation that created so many changes or opportunities for innovation as what we are currently witnessing in the world when we emerged from the pandemic.”
In 2020, female founding teams only received 2.4% of all venture capital dollars in the US, up from a high of 3.4% in 2019, according to the Crunchbase business platform.
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One of the challenges is the base of investors who make the decisions, as many tend to invest in founders that remind them of other successful founders, Sandler said.
“The problem is, you have an entire industry that, generation after generation, has just invested in men,” she said.
“This is one of the reasons why it is so important that diversity in the ranks of decision-makers in venture funds accelerate.”
All Raise says only 13% of decision-makers in US venture capital firms with assets under management of more than $ 25 million are women.
Advice for women entrepreneurs
Because of this disproportionate representation, women may need to change the way they base their business on VCs.
One of the most important things Sandler founders says is to bring their most boastful, bombastic version of themselves to the meeting. The vast majority of their competitors are pretty close to the “Silicon bro” profile – a 35-year-old white man who has been conditioned to pound on his chest.
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“If you walk into this playing field and you feel like the most disgusting, confident version of yourself, you are nowhere near what the businesswoman did before you,” noted Sandler, who said most of the investments made during her career were made in women-led companies.
Women should also take a tiered approach to fundraising, said Lindsey Taylor Wood, founder and CEO of The Helm in New York, an early-stage venture firm that invests in female founders.
Not only should you be reaching out to companies that have the ability to support your business, but also get creative with the type of angel investor you’re looking to acquire, she said. Check out a variety of avenues, including stock crowdfunding or a small business loan.
“If you can get a bunch of strategic investors on board with smaller checks, it can be painful early on, but if you need it to get going, that’s what you do,” said Taylor Wood.
Helm’s Lindsey Taylor Wood speaks at a responsible lunch hosted by Diane von Furstenberg and LinkedIn in New York on September 5, 2019.
Craig Barritt | Getty Images Entertainment | Getty Images
Her company focuses not only on financing female founders, but also on attracting female investors. Last month, The Helm launched a membership program that allows its investor community to invest in early-stage companies founded by women for an annual fee of $ 750.
If you’re rejected, don’t let it stop you. Instead, remember that this is a sign of progress as it means you are getting feedback, Sandler said.
“If you’re not out there, if you don’t ask for what you really want, the answer is no anyway,” she said.
“So collect a few ‘no’. Be proud to collect a few ‘no’. Then the yes is so much the better when it comes to it.”
Women should start businesses in every single category for every single customer, Sandler advised.
That said, there are certain areas that are ripe with opportunities. One is focused on easing the burden on female family members trying to balance work and personal life, Sandler said.
“Family responsibilities need to be balanced,” she said. “In the meantime, new technology can help achieve this balance, making communication, scheduling, household and financial tasks easier to see and coordinate.”
Sandler also sees room for new business in the “wildly massive and wildly underserved” category for feminine technologies like reproductive health. These include puberty, fertility, pregnancy, childbirth, menopause and beyond. She also sees room for new ventures in mental health and holistic wellbeing.
Colored women and LGBTQIA (lesbian, gay, bisexual, transgender, queer / respondent, intersex, and asexual / aromantic / agender) are hardest hit by the lack of resources in this area, Sandler said.
“The opportunity for entrepreneurs to develop comprehensive solutions is not only relatively untapped, it is also huge,” she said.
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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.