05/05/14 | Uncategorized

Show Me The Money: A Women's Guide to Securing VC Backing

A woman who has raised $200M in VC money offers tough talk – and solid advice – to female founders who are fundraising.

By Carol Realini (Serial Entrepreneur & World Economic Forum Technology Pioneer)

logo2-150x1501-2The latest VentureSource report for the first quarter of 2014 reports US financing at $10.74 billion, a 44 percent increase from the first quarter of 2013. Women entrepreneurs should be ecstatic about this. But are they?

Not really, and for good reason. In November 2013 Forbes reported “The picture was especially bleak for venture capital funding, with only 7 percent going to female-led businesses.” It is not surprising since VC industry itself is a men’s club. Some of the top firms are the worst – for example Sequoia has no female partners. Fortune reported in February of this year that only 4.2 percent of US partner-level VCs were female.

Failure Is Not an Option

This is bleak. Have we traded the glass ceiling for a bridge to nowhere? Crowd and angel funding numbers are better, with 24 percent of women-led businesses receiving investments.  But, as many entrepreneurs know, post seed-money can be critical to building a scalable business. So without access to VC funds, the runway can run out and then it’s game over.

Women entrepreneurs need to say to themselves: failure is not an option.  Despite the bleak numbers and extra challenges, if the business needs venture funding, she must get it.  Determination is a must. She can’t let these figures dissuade her. The list of women getting VC funded may be small but it exists.

No Woman Is an Island

No one, especially no first timer, gets funded without support from others.  Support is essential.  Advice, introductions, references, feedback, credibility all comes from the people that help entrepreneurs get funded. It may look like a solo act, but it isn’t. A women entrepreneur with inadequate support, needs to fix this. It is the foundation of a successful fund raise.

Her job is to be an evangelist and recruit stakeholders, investors, employees and customers. What she’s offering won’t be for everyone. She is not in a popularity contest. She must find the people that will opt in – don’t spend an extra second on the people, including VCs, who just want to critique and really aren’t going to invest in her company.

She must perform like a master sales leader – “be surgical”.  She can’t waste any time. Be focused on where there is money for her type of investment. Engage with warm introductions with senior partners. Understand where they are in their process, identify obstacles and overcome them.

Reprogram Your Internal Monologue

If necessary, she must reprogram herself. So many women have internal messages that work against them. They usually take the form “Because I am bla bla bla, I can’t raise money.”  She may not be able to eliminate this message, but she can keep it from impacting her actions.

Someday there will be more women VC partners, more women investing on crowdfunding platforms, more male investors looking for investments in women entrepreneurs. But women today confronted with the fundraising challenge, must be successful despite all this. A bridge to nowhere is not an option – she must get smart, work hard, get support and successful close a round.

Still not a believer? When I started 20 years ago it was even tougher for women to raise money and I considered myself the least likely to succeed.  But after raising over $200 million I know that if I can do it, so can you.

Image credit: Andrew Hyde via Flickr

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