By E.B. Boyd7 minute Read
Women entrepreneurs dread fundraising. Many are convinced there’s bias involved, and they’re not wrong: Research shows that investors ask women different questions than men, and that in turn influences funding decisions.
Granted, much of this is likely unconscious. Ideas about gender are so deeply embedded that an investor who thinks he or she is treating women and men the same probably isn’t. Still, women who want to maximize their chances of getting funding need to learn how to navigate the undercurrents of pitch meetings. Below are tips on how to answer specific questions, but the overall advice boils down to the following: Control the direction of the conversation, and keep bringing it back to the business and the amazing opportunity it presents.
Full disclosure: A lot of what we’ve written here is going to sound sexist. And it is. Women shouldn’t have to twist themselves into pretzels to get well-deserved backing. Hopefully society’s ideas about gender will evolve, but this is the playing field as it currently exists.
1. “How are you going to defend your market share? How are you going to retain your customers?”
With women, investors tend to focus on all the ways their company could fail, while men get questions about how their company could succeed. For example, investors will ask a man how many more customers he can acquire, and women how they plan to retain the ones they have.
Research led by Dana Kanze at Columbia University looked at TechCrunch Disrupt pitch competitions and calculated that founders who were asked “gains”-related questions went on to raise seven times more money than founders who were asked “loss”-related questions. Investors often don’t even realize they’re doing this. Leadership and entrepreneurship have historically been seen as male domains. The slant of investor questions, then, is often simply a manifestation of deeper anxieties about women’s abilities to pull off a successful startup.
There’s a silver lining. Women who pivot mid-answer from “loss” content to “gains” content increased the amount of funding they received. While this needs to happen subtly, Kanze says, shifting the conversation back to the founder’s bold vision and the company’s huge opportunity redirects investors’ attention to the gains side of the equation, and they walk out of the meeting with more enthusiasm.
There’s an important body language component to this as well. Loss-related questions elicit defensive reactions. “You can see the body language of these women shut down,” Kanze says. That initiates a vicious downward cycle. A founder who comes across as deflated inspires less confidence in investors. “The by-product of the Q&A is that [an investor] can walk away thinking, ‘Wow that woman was really defensive. She seemed really uneasy about the questions’”–even though, Catch-22 style, it was the investors’ own questions that generated that result.
Preparing for the loss-related questions, and learning how to pivot shifts a founder’s body language. They’re calm. They’re confident. They smile. They lean forward. And investors leave with different impressions.
2. “Who would use this?”
Investors–who remain overwhelmingly male–often scratch their heads at products aimed at women. While they can sit through presentations for nano-AI-machine learning-deep proton-plasmatic startups and enthusiastically pull out their checkbooks having understood almost nothing, show them a menstruation-tracking app or an improved breast pump, and suddenly, they “don’t know enough” about it to invest.
Some investors deflect by telling founders they have to run the product by their wives. Michelle Abbs, who directs Babson College’s Miami WIN (“Women Innovating Now”) Lab, says the accelerator trains founders to reply by focusing on the numbers. “‘Yes, ask your wife,” the founders are taught to say, “and [in the meantime] let me tell you about the long-term return on investment for you.”
In some cases, another approach could also help. Tyler Haney of Outdoor Voices (Fast Company Most Creative People 2017) created a new type of activewear for women. Investors initially pushed back, fearing the company wouldn’t be able to compete against Nike and Under Armor. So Haney began sending samples to the women in the investors’ offices–and sometimes to their wives. The excitement of those women demonstrated the company had legs, and Haney has now raised $56.5 million.
3. “Are you planning on starting a family?”
Investors worry that a woman will lose interest in her startup once she starts a family, or that the demands on her time will overwhelm her ability to run the business. Some will directly ask a woman about her plans. (There are no federal protections against this when it comes to investing.)
While answering the immediate question however they please (some are candid, others dodge), experts advise moving the conversation back to the company. “There’s a way to pivot back to your focus, drive, and excitement for business,” says Kara Miller, who directs the Babson WIN Lab in Boston.
Investors are often simply looking for signals that your interest isn’t going to flag. Both the story you tell, and your body language, need to pattern-match what they expect to see from single-minded founders. For example, you might say in a relaxed, confident, excited-about-the-company way: “My partner and I have talked about children, but we don’t have any immediate plans. I’ve been thinking about solar energy for the last 10 years, however, and SolarPlazMatix has developed a unique technology that will be the leader in our $25 billion market. That’s my sole focus at this point.”
4. “I don’t think you have the right temperament to lead this company”
When Hustle Fund General Partner Elizabeth Yin was raising money for her previous startup, an investor told her, “I don’t want to say the wrong thing and call you a ‘meek Asian woman,’ but I question how you’ll lead a team of a hundred people.” She’s not alone. Women founders often find their leadership chops questioned.
There’s little you can do mid-pitch if someone has already formed that impression of you. That’s why female-focused accelerators focus on body language long before founders step into meetings. Research has shown that investors react better to women with “masculine” behaviors and less well to women who come across as too feminine. If you have a high voice, for example, you might consider bringing it down into a middle register. (No need to go full Elizabeth Holmes, however.) If you’re normally very expressive, you might modulate your gestures. If you’re normally demure, you might practice coming across as more assertive.
Michelle Abbs recommends that founders tape themselves and then assess their own performance: What is your tone of voice? What are you doing with your hands? How’s your eye contact? How commanding are you? Then look at videos of women who exhibit the more masculine behaviors investors are looking for and consider how to move your behavior in that direction. “It has to be honed by them,” Abbs says.
Again, we’re not saying this is fair. Hopefully, our daughters will be able to show up in pitch meetings as their full selves. But for now, this is the game. Here are some videos of women leaders displaying the kinds of qualities investors respond to: former Xerox CEO Ursula Burns, Rent the Runway founder Jennifer Hyman, and former PG&E CEO Geisha Williams.
5. An investor asks an aggressive or attacking question–or is simply behaving like jerk
Some investors get aggressive. They interrupt. They attack. They might even bully. Some of this is simply a legacy of the more jostling communication style these meetings had when this was an all-male game. While founders need to answer the questions, the content of the reply could matter less than the grace and class with which they handle the aggression.
Dennis Joyce, an angel investor in Seattle who mentors entrepreneurs in the Female Founder Alliance’s Ready, Set, Raise accelerator, says entrepreneurs can use a questioner’s brash behavior as opportunity to demonstrate their leadership skills. Angels are a tight bunch, and they often know who has a rougher personality. Sitting in a pitch meeting, they might not approve of an aggressive person’s style, but they will want to see how the founder responds. They know founders will run into jerks at every stage. “The mark of a really good CEO is you’re able to patiently get through this situation,” Joyce says. “Our money will be safe, knowing the next time you get asked a question like this, you’ll handle it well.”
6. “You need a male CEO”
If an investor tells you they want a different leader, the trainers at WIN Labs advise founders to simply “smile and say, ‘Thank you for that thought,’” Michelle Abbs says. And then cross that person off your list.
“Not all investors have to be your investor,” Abbs says. “You’re not going to change that perspective, [and] you don’t want them to invest in you if that’s how they think.”
Correction: A previous version of this article misstated the amount of money Outdoor Voices has raised.