Anita Brearton and Sheryl Schultz have advice for other post-50 female entrepreneurs: Don’t give up, no matter how many ridiculous, insulting things are said to you by the mostly male venture capitalists you will inevitably encounter.
The two businesswomen, both entrepreneurs and both in their late 50s, should know. For the past year, as they looked for investors for their latest venture, Brearton and Schultz heard all kinds of unhelpful suggestions, including:
- "You should tell the investors in the room to close their eyes, send in some hot babes and let them start talking for you.'"
- "Start-ups are really, really hard. You gals are really smart. Why don't you just take CMO roles?"
- And then there was, "Don't even bother trying to raise money, you're too old."
Even venture capitalists who themselves are in their 40s or older viewed Brearton and Schulz as really, really old. “Everyone wants to find the guy who’s 27 years old in a hoodie,” says Brearton, referring to Facebook founder Mark Zuckerberg and his signature look. Noting that stats show most startups fail, Brearton says, "it's just plain stupid to think that you can pick the winning team by selecting on (the basis of) age, gender or ethnic background. But we see it. We definitely, definitely see it."
You won’t get money if you look like their mom
While much has been written about the difficulties women entrepreneurs face, interviews with entrepreneurs, investors and others who study startups say that women older than, say, 40 begin with a couple of strikes before they even open their mouths. A recent Modis survey of U.S. adults who work in the tech industry found that 55% think the biggest challenge to diversity in tech is age. This is followed by gender (21%), ethnicity (18%), and religion (6%).
Yet, when the biggest names in Silicon Valley decide they want to become more diverse and inclusive, they often don’t even include age in their campaigns. The prejudice is probably not surprising; the conventional wisdom in the tech world is that neither women nor people over 50 know much about tech. And if VCs are literally looking for the next Zuckerberg, then female entrepreneurs—particularly older ones who aren't considered "digital natives"—just don’t fit the profile.
The first obstacle: getting past the associates who screen ideas at VC firms, almost all of whom are male, white and under 35, says Julie Wainwright, founder and CEO of San Francisco-based luxury consignment empire The RealReal, which topped $100 million in sales in 2014.
“You tend to do deals with people you have an affinity with, especially at the beginning,” explains Wainwright, who started The RealReal at 53. “[These young men] don’t have an affinity with someone who could be their mom … and if they don’t relate to you, they’re not going to relate to your product.”
Finding female investors
Ultimately, older female entrepreneurs don’t have much recourse against age and sex discrimination. In interviews, many told Fortune they simply turned to one of a handful of female tech investors for support or former mentors.
“I think if you’re out there trying to raise capital and you’re a woman, and you’re in tech, I think what you need to do is find people to work with who know you and believe in you,” says The RealReal’s Wainwright. “Or [you should] go to firms that have female VCs.”
In November, Brearton and Schultz were finally able to launch their business — CabinetM, a Match.com of sorts connecting marketers with the latest marketing technology. They did it with seed money from angel investor Jean Hammond who, among other claims to fame, helped fund Zipcar, another enterprise started by two women. They also got seed money from Crimson Hexagon CEO Stephanie Newby, who founded Golden Seeds, a VC firm specializing in women-led enterprises.
Trish Costello, CEO and founder of equity crowdfunding site Portfolia, also has stepped in to help older women entrepreneurs, starting an Active Aging Fund aimed at backing companies with founders over the age of 50, and the Rising Tide Fund, which makes early-stage investments in businesses run by underrepresented groups, especially women.
“Most of the entrepreneurs we’re looking at in that space are women in their 40s and 50s,” says Costello, also cofounder of the Kauffman Fellows Program. “It’s still a fairly new investment area, but what I know about VCs is once they see people making money in an area and they’re missing out, it’ll be eye-opening.”
One entrepreneur Portfolia is backing is fiftysomething Jean Anne Booth, whose company UnaliWear recently developed a smartwatch geared to seniors, called Kanega. It is expected to hit the market by summer 2016. Before her latest venture, Booth started two companies that sold to Texas Instrument and Apple.
Booth came up with the idea for Kanega in 2013 when trying to find a solution to keep her octogenarian mother safe. The result is an attractively designed smartwatch that doesn’t need to be tethered to a smartphone. It can remind the wearer when it’s time to take medication and calls for emergency assistance in the event of a fall or if the wearer appears immobile or unresponsive. It also will provide the owner’s current location, if they’re wearing the watch, and help him or her retrace where they had been during the day in case of a “senior moment.”
She says they bet on her because they want to “take advantage of the fact that [she has] experience.” That might be a lesson the rest of the VC world may learn as they end up missing out on potential big sellers like the Kanega. Booth says several of her investors are moving into the senior space, “because they totally get” the demographic explosion in that age group.
The over 50 crowd of entrepreneurs is now the biggest
That older people's ideas tend to get brushed off by Silicon Valley types reflects mainstream attitudes. But it may ultimately prove to be bad business. Paul Graham, 51, co-founder of Y Combinator, which provides seed capital to startups, related a misstep by his company to The New York Times Magazine in 2013: “There was a guy once who we funded who [turned out to be] terrible. I said, ‘How could he be bad? He looks like Zuckerberg!’”
The numbers of baby boomers starting companies for the first time are rising. The Ewing Marion Kauffman Foundation’s 2015 startup index report found that Americans, aged 55 to 64, now make up the biggest group among first-time entrepreneurs, representing 25.8% of the pool now versus 14.8% in the 1997 index. Conversely, the percentage of younger entrepreneurs, aged 20 to 34, has been contracting, dropping from 34.3% in the 1997 index to 24.7 percent in 2015.
The old-school mentality — that youth is the only source of cutting-edge digital ideas — may ultimately prove to be bad business.