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Investors Explain Why ‘Men Pitch Unicorns and Women Pitch Businesses’

Theresia Gouw, left, Susan Lyne, and Sukhinder Singh Cassidy Theresia Gouw, left, Susan Lyne, and Sukhinder Singh Cassidy
Theresia Gouw, left, Susan Lyne, and Sukhinder Singh Cassidy Getty Images

While women are making progress in many segments of the business world, there’s one—very important—area where they still lag: raising money.

In fact, the latest stats from funding database Pitchbook reveal that women-led companies landed a minuscule 2.19% of venture capital funding in 2016, down from the previous three years.

Speaking on a panel at South by Southwest in Austin on Monday, a trio of female investors—all of whom are also successful entrepreneurs—discussed some of the reasons those numbers have remained so measly. One issue: Female founders sometimes shy away from pitching a grand vision—or, in the words of panelist Susan Lyne, president and managing partner, BBG Ventures: “I see men pitch unicorns and women pitch businesses.” (More on that later.)

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The group quickly turned to ways to improve the stats, giving attendees a wealth of tips on how to raise funding from institutional, angel, and seed investors.

Your network is your greatest asset

Don’t know any investors? Think about your contacts who are entrepreneurs—especially if they’ve raised money themselves. “Let me tell you who VCs take referrals from,” said Sukhinder Singh Cassidy, founder and CEO of and an active angel investor. “They take them from the people they’ve invested in.” If one of your contacts has gotten funding from an investor you’re targeting, she said: “Go pitch that entrepreneur!”

Aspect Ventures founding partner Theresia Gouw agreed, saying that referrals from entrepreneurs she’s funded—or from investors she’s partnered with—go “to the top of the list” of the thousands of potential investments that come her way each year. “I’m 100% going to take that meeting,” she said.

Similarly, talented friends are a great gateway to angel investing, added Singh Cassidy. “If you’re thinking about being an angel investor, think about the people who are starting companies in the spaces you like and that you know,” she said. “If you have close networks, you may be able to start small, and they will take your $10,000 check—it does give a way to understand” what the angel investing world is about.

Go big

Singh Cassidy recalled learning that Lyne had turned down an entrepreneur that the Joyus founder had referred to pitch BBC Ventures. When she called Lyne to get feedback on what had gone wrong, Lyne told her: “Sukhinder, all I can tell you is that I see men pitch unicorns and women pitch businesses.”

“That resonated with me,” said Singh Cassidy. “One of the things you can best do to increase your access to capital is learn how to sell a big vision.”

The issue, according to Lyne, is that women too often “pitch the business they’re building right now.” Investors, she said, want to see you step back and describe the opportunities you see for the business as it grows and expands over time. That also means being able tell “a great story,” she said. “A good narrative will take you very far in being able to get investors excited about what you want to do.”

Be the best woman for the job

Raising capital, particularly in the early stages, is often as much about pitching yourself as is it the company. In order to intrigue Gouw, you must tell her why you’re the “domain expert.” You must show “why are you the entrepreneur, or the entrepreneurial team, that is going to figure this out,” she said.

That includes knowing—and acknowledging—competitors in your space, she added. Acting as if you own the space will backfire, she said, because investors assume any market with no competition is likely to small and unworthy of their time. “Be thoughtful about competitors—bring it up. It’s your chance to set the market landscape for your investor.”

Don’t wait

While you may—and should—have unicorn aspirations, few investors are willing to put their money into a business that only exists on paper. Start building it now, said Singh Cassidy. “If you are not prepared to spend your evenings and weekends—because lets be clear a lot of us have day jobs when we’re trying to start these companies—and some of your own capital to getting an alpha up, then its hard to convince somebody else that you’re serious about your business.”