Fundraising Advice From Female Founders Who Raised Serious Cash
For women dreaming of launching their own startups, the numbers are grim: Female founders received just 2% of the $85 billion total invested by venture capitalists in 2017.
Yet the stats don’t tell the full story. There are a growing number of women entrepreneurs fighting to defy the odds—and succeeding. Take Zola, the wedding registry and planning company that landed a $100 million Series D in May, one of the largest fundraising rounds to go to a woman-led company this year. The women-only co-working space The Wing, meanwhile, continues its rapid expansion, with its first international clubs—in Paris, Toronto, and London—slated to open in 2019.
Fortune sat down with the founders of the two companies, Zola’s Shan-Lyn Ma and The Wing’s Audrey Gelman and Lauren Kassan, to talk about the inspiration for their startups, their experiences raising money in the male-dominated world of venture capital, and their advice for fellow female entrepreneurs.
What motivated them to start their companies?
Zola, says Ma, was “born of out of personal need.” It was 2013 and she was experiencing a familiar phenomenon: that year when all your friends get married “at exactly the same time.” She was going to lots of weddings—and buying lots of wedding presents.
“I was buying for my best friends from department store registries, and found the shopping experience on those registry websites to be one of the worst eCommerce shopping experiences I have ever seen,” she says. She started talking about the issue with a friend, Nobu Nakaguchi, who would eventually become her co-founder. “The same three things kept coming up again and again. People want everything that they’re passionate about in products, experiences, and cash in the one place. They want it to be personal. And they want full control on whichever device they’re on,” she says. “We realized that no one else was doing that, and if we could solve this, it was a huge opportunity, and we had all the right experience to do this.”
The Wing, too, sprang from the founders’ personal experiences. For Kassan, it was the period right after her marriage, when she was struggling to expand her social and professional circles. “I really wanted a place to go to where I could meet other women who have common interests or I could learn from or could learn from me,” she says.
Gelman recalls a work trip to Washington, D.C., where she was stuck “putting on a suit and trying to apply mascara in a moving train car bathroom.” She continues: “I just thought there has to be a better way. I think that there are all sorts of spaces that are out there, but none of them were designed with women in mind….For me, I was just carrying my entire life in my bag. A space like The Wing, we wanted to lighten women’s load. ”
Not surprisingly, most of the VCs Ma found herself pitching were men. “It was very hard for them to connect personally to what the pain points were today, and even what the product is or the concept is, because they had never even done the work themselves when they got married,” she says. “I certainly got a lot of people saying to me, ‘Let me ask my wife, or my assistant whether they would use this product, and I’ll get back to you,’ but ultimately those were not the investors that we picked for Zola.”
Kassan echoes the importance of being choosey about which investors to work with. “Someone told us not all money is the same color green. That really resonated with us and is very true. I think finding people who really believe in you and your mission versus just taking any check is a hard and disciplined thing to do but an important thing to do.”
Finding powerful female role models and mentors was an important source of inspiration for all three founders. From encountering tech icons like Meg Whitman during her years attending Stanford University to working at Gilt, a startup with two female co-founders, Ma says she learned a lot from other women throughout her career.
“At Yahoo, I think one of the things that I loved about that experience was that I got to observe and present to Cammie Dunaway, who was the CMO at the time—a great leader, extremely well respected. As well as got to watch in action Sue Decker, who was then CFO. So just had great female role models both at Yahoo as well as at Gilt,” she says. “I think seeing that it’s possible is half the battle.”
“I’ve always surrounded myself with strong women,” says Kassan. “My first boss is a woman who is an entrepreneur and did everything herself, is a single mother, is an incredible force. I worked for a woman who was the only female board member at her company.”
Gelman says would-be founders “have to really put on a rhinoceros skin. You have to prepare yourself for an experience where there’s a lot of rejection. You’re going to meet a lot of people that aren’t the right fit for you. It is sort of like dating in a way. There’s a pattern matching of people that understand and believe in you and you were meant to have support you in your vision.”
“My advice to any female founder is to really know your audience, and know the questions that they have in their mind that they have to answer about any investment that they make,” says Ma. “They are: ‘Why now? Why is now the right time for this idea? Why you? Why are you the perfect founder or founding team for this business and this market? And, how much money are you going to make me? Why is this going to be such a big, important, impactful company that I’m going to be really glad that I stuck my neck out to invest?'”
A final word from Gelman about what makes a successful entrepreneur: “The thing that always strikes me is somebody who just seems like they’re never going to take no for an answer. They’re just going to plow through every challenge, every wall or obstacle that’s in their way…If you are truly that person, you have to make sure that people know that.”
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