Raising money is catastrophically challenging for female founders

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“Raising money is devastatingly challenging for female founders, and even more difficult for black female founders.”

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It’s a bold, even damning statement—one I recently made in a discussion about what’s to come in 2022 for leading startups for women, like me.

As one of the few black female CEOs in the developer tools space, I am often asked to comment on larger, collective social issues centered in tech. It’s a lot to carry, but I realize the value to all of us in raising these issues, and my voice, when I can. Still, while I’d like to be able to give conclusive answers, I have a lot of questions.

Technological Innovation

In the world of technology, we look forward to being part of the next digital product that benefits from first mover status and shapes what is to come at an industry level. This is particularly relevant in relation to seeking capital. And while we’ve seen some impressive changes in the developer tools space following a VC-backed funding suite, sometimes I worry that we’re at risk of stifling technological advances for the social progress we really need. . Women are still behind. Why?

There are some great female developer founders, such as Norah Jones of Jelly, Window Snyder of Thistle Technologies, Edith Harbaugh of Launch Darkly and Jean Yang of Akita Software, to name a few. There are some wonderful female angels and VCs too. These are the women I see as the leaders in the industry – overcoming the barriers of either giving or asking for money while remaining authentic for who they are.

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Limited partners should support more female VCs, and the funds should provide women with the same grace and latitude that men are given. Shania Levene

Despite those of us trying to make a name for ourselves in the dev tools, the reality is that the dev tools space is mainly led by white people. For those of us who don’t meet those gender and racial criteria, just thriving requires a great deal of attention to detail, energy, and time, which is often sustainable.

We need to level-set by acknowledging the current ways in which women must fight to grow. We need to ask some tough questions.

fight must be taken seriously

We want to be able to fundraise from other people who look like us, right? But many women investors are struggling to be taken as seriously as the women founders they want to support. If we are all facing the same social obstacle – fighting to prove our legitimacy – then we probably maintain a similar aversion to risk.

This creates an invalid cycle in which female investors take on less risk, especially with regard to investments in female founders, and receive less funding than their male counterparts. How can we break this cycle?

Limited partners should support more female VCs, and the funds should provide women with the same grace and latitude that men are given. Women VCs should be promoted to partnerships, where they can quickly write meaningful investigations.

I have personally seen extraordinary results from engaging with others to support empowered female angels and female founders of VC; The sense of community and brotherhood they inspire has the potential to transform the industry. This is what we need to move forward and scale.

The fight to overcome underlying psychological barriers

Today, a widespread belief exists that as both founders and VCs, women are less aggressive in the process of verifying a round. As a female founder, I’ve been told that the male counterparts are able to fund larger, faster – that women appear to be more risk-averse, often going slower through the process and requesting fewer.

So, what is causing the stagnation among women? This is probably the most obvious answer: in fact, we are facing a greater risk of rejection early in the funding process. We tend to have fewer connections in the VC community, where the “rules of the VC” – what to do, say, and how to act – are often confusing and counterproductive. Nothing like clear guidelines on writing a good piece of code.

fight against numbers

Imagine you have 1,000 potential investors and only 10% of them focus on companies offering technologies similar to yours. Then, only 2% of them invest in companies at your level and 5% of them share the same philosophy as you—and you only get access to another percentage of them. Now, imagine you’re stepping into those discussions with the understanding that we’re ultimately pitching people, so you often have to “click” into the all-too-brief conversation.

You will be committed to this investor in business for the next decade or more. So, while you’re trying to navigate the numbers — the odds are against you — you’re also trying to trace the history, personality, and perspectives of VCs. How have they been lit before? Can we empathize with their past businesses and reassure them that our business is a worthy investment… in 30 minutes or less?

So, how can women successfully fight for funding?

Simple answer: We can’t do it alone. Like most professional endeavors, seeking funding is ideally promoted by social networks. While I wish I could say that women intrinsically have everything it takes to excel in the world of venture capital, I believe we need basic networking and allies and support beyond gender and race. is required.

With a focus on the challenges faced by women of color, we need everyone who has a stake in the game to join the fight for women. We must acknowledge the potential danger of working with a survival mindset for women founders and investors and provide them with the coaching and guidance they need to be able to speak, prepare and speak with greater strength on behalf of a company .

Simply put, we need to rely on the ability and capability of women on both ends of the deal with no stipulations.

And so, my final question to founders and investors everywhere: Are you willing to join our fight?

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