Why only .01% of women entrepreneurs get funded?
By yadavranjan on May 15, 2013
How do you get women venture capital? First get women venture capitalist. Women invest in women but the problem is; not any women can be a venture capitalist. It’s a very small group of women who are asked, since most have to have their own money to invest also.
Will women get funded? Well, most venture capitalist equates a female entrepreneur’s idea with their wife. Would the wife use this new idea/technology? If the new idea passes the “wife” test then they will have a second meeting. The irony is dumbfounding. For me, the technology is always way out, too farfetched until it happens. Like my idea in 1999 for paying parking tickets online. One of the venture capitalist asked me after extensive due diligence “what is your most important role today?” I said it was being a mom. Since everything else in business can be fixed with a course correction or resources and money, children in retrospect cannot. You mess up once and no amount of time, resources or course correction can help you.
Every good venture capitalist has to have started a company. It’s important to have empathy with founders to understand what they are going through so I want to work with folks who want to get help. Good help vs Bad help to turn imaginative ideas into enduring companies. To do this right and having done this first hand, many of the challenges, big early strategic decisions and setting the culture of the company. The collective knowledge of the team is important and their place in the success wheel in the early stage of launch determines the outcome. A friend of mine was a sales guy. Knew nothing about the technology he wanted to create. He fired his CTO, an MIT PhD, after three days on the job. Why? The CTO didn’t fit the culture and had a different product vision.
Your PRODUCT has to be YOUR BRAND! You have to live it and eat it.
When I first went looking for VC funding, I went up and down Sand Hill Road, it was very hard for me trying to get meeting and when I did, I would get ripped apart by their questions and it was a horrible experience. Today there are many different way Entrepreneurs can get money only one of which are VC’s. So, you have to understand what you really need and you need a network first. Most VC’s rely on past success with CEO’s and team for the next big thing. The problem with that is that the next big thing is stemming from someone else’s pain. They are coming up with the next game or app and these folks do not have to raise money the old traditional way – venture capital. The venture firms need to offer more than just money, they have to revamp the offering and evolve.
The entrepreneurs have to be disciplined, curious and learn quickly, zig and zag. The idea for a company cannot be just something they came up with in a couple of weeks. It takes at least 6months to a year to get your idea solid, conduct market and product due diligence. Otherwise be happy to become a lifestyle company, have a great ride and be happy with a small exit, like id="mce_marker"0-$30million!
So, what do small, agile, fluid companies to do be successful? Choose what type of money you need. Smart money, money or bad money, I have done the last two, each time with brutal, teeth pulling outcomes when I delivered an exit. As a woman founder, my advice is this: look around and see who is hanging back. They are the people you want the money from. Not the front row guys. These guys are only in it for the lights.
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