Venture capital is all about evaluating risks. Those risks come in many forms: technology, team members, market shifts, operations, etc. As a venture capitalist, my job is to perform comprehensive due diligence to determine whether an investment and a founder offer enough potential value to justify those risks.
Diversity, including gender diversity, is part of this evaluation process. It’s critical to innovation, and it can bring your company better opportunities, as well as build a strong team dynamic. But the goal at my VC firm isn’t just to find women-led tech startups; it’s to find the tech startups that offer us the most potential value. As one of the few VCs who is a minority woman under the age of 30, I’m eager to support fellow women in their quest for business success. And the best way to show my respect is by treating them as objectively as possible.
I do, however, always search for opportunities to help female entrepreneurs make the best possible case for their startup. If you’re a founder searching for VC funding, there are two main questions to answer when pitching your company:
- Do you have a long-term, insightful vision for your business?
- Do you have some unique advantage, whether it’s your tech, your team, or your resources?
Developing well-thought-out answers to these questions will attract VCs — and their funding — to your business.
Vision + Advantage = Secure Funding
You might be able to tell me all about your industry and have a strong, diverse team of people working with you, but the market might not exist for your specific idea. Additionally — and I’ve seen my fair share of this — the following red flags will make you stick out to VCs for all the wrong reasons:
- A bad team dynamic
- A small market for your product
- A cash flow problem
Each represents risk, but I’m also looking for ways to identify the reward. Calling back to our big questions, what unique advantages does your woman-led company have that make it superior to competitors?
- Do you have a better technology stack?
- Have you forged strong connections you can leverage?
- Did you invent a new platform that will advance the industry?
If you’re able to offer investors something no other company can, start making the case that your potential benefits outweigh your risks. If you’re certain your team is beating the competition, prove it. Showcase a pilot program for early stage customers, for example, or form a partnership with a more well-established company (perhaps another female-led one). Do whatever it takes to grab a VC’s interest and secure your first meeting.
From there, you can begin to make your case:
1. Deliver a perfect pitch.
Having a great company won’t do you any good if you can’t explain why it’s profitable. Use your pitch to show VCs how you’re thinking through profitability. Be precise and highlight relevant numbers whenever you can.
Have different versions of your pitch for different situations. Sometimes, your pitch will need to be five minutes, sometimes 20 minutes, and sometimes an hour.
2. Stay on your toes.
Be ready to take meetings with investors at a moment’s notice, even when you’re not actively raising money. Keep track of how your company is growing and how your industry is changing, and constantly refine your pitch based on these factors. Be proactive about getting capital before your cash flow reaches a crisis point.
3. Suck it up.
Perhaps most importantly, get ready to hear the word “no” — a lot. I’ve learned that you can’t take it personally. Rejection can’t prevent you from moving forward, and it doesn’t mean you can’t prove yourself to be a good investment.
Instead of looking for a “yes,” try to find an investor you trust who can give you honest feedback. That’s what I always try to offer entrepreneurs, especially women in tech. Sometimes, these tough conversations are the first step to fine-tuning the product, strategy, and pitch you’ll need to get funding.
VCs are always waiting for the next best thing — as a woman in leadership, you already have certain advantages. Just make sure your vision and pitch align, and you’ve got capital in the bag.