“Raising money is catastrophically challenging for female founders, and even harder for Black female founders.”
It’s a bold, even damning statement — one I made in a recent discussion speculating what’s to come in 2022 for women leading startups, like myself.
As one of a few Black female CEOs in the developer tools space, I’m often asked to comment on big, 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 offer decisive answers, I’ve got a lot of questions.
Tech innovation < social progress
In the world of technology, we thirst to be a part of the next digital product that benefits from first-mover status and shapes what’s to come at an industry level. This is especially relevant in regard to seeking capital. And while we’ve witnessed some impressive transformations in the developer tools space, with VC-backed funding following suit, sometimes I worry we’re at risk of conflating technological growth for the social progress we really need. Women are still behind. Why?
There are some great female developer founders, like Nora Jones of Jeli, Window Snyder of Thistle Technologies, Edith Harbaugh of Launch Darkly, and Jean Yang of Akita Software, to name a few. There are also some amazing female angels and VCs. These are women I look to as leaders in the industry — those overcoming the barriers of either giving or seeking funding while remaining authentic to who they are.
Limited partners should back more female VCs, and funds should offer women the same graces and latitude that are given to men. Shanea Leven
Despite those of us trying to make a name for ourselves in dev tools, the reality is the dev tools space is led predominately by white men. For those of us who don’t meet those gender and racial criteria, simply thriving requires more attention to detail, energy and time than is often sustainable.
We need to level-set, acknowledging the current ways in which women must fight to thrive. We need to ask some tough questions.
The fight to be taken seriously
We want to be able to fundraise from other people that look like us, right? But many female investors are fighting just as hard to be taken seriously as the female founders they want to support. If we’re all facing the same social constraint — fighting to prove our legitimacy — we’re probably maintaining the same aversion to risk.
This creates an invalidating cycle in which female investors take fewer risks, particularly in regard to investing in female founders, and garner fewer funds than their male counterparts. How can we break this cycle?
Limited partners should back more female VCs, and funds should offer women the same graces and latitude that are given to men. Female VCs should be promoted to partnerships, where they will be able to write meaningful checks quickly.
I’ve personally witnessed the extraordinary results of empowered female angels and VCs connecting with others to support female founders; the community and sense of sisterhood they inspire have the potential to change the industry. This is what we need to latch on to and scale.
The fight to overcome ingrained psychological barriers
Today, there exists a widespread belief that women are less aggressive in the process of confirming a round, both as founders and VCs. As a female founder, I’ve been told male counterparts are capable of committing larger funds, faster — that women appear to be more risk-averse, often moving slower through the process and requesting less.
So, what’s causing the pause among women? It’s likely the most obvious answer: We are, in fact, facing a greater risk of rejection in the funding process. We also tend to have fewer connections into the VC community, where the “rules of VC” — what to do, say, and how to act — are often confusing and counterintuitive. Nothing like the clear guidelines on writing a good piece of code.
The fight against the numbers
Imagine you have 1,000 potential investors and only 10% of them focus on companies offering technologies like yours. Then, just 2% of them invest in companies at your stage and 5% of those share your same philosophies — and you’re only able to access yet another percentage of those. Now, imagine you’re stepping into those discussions with the understanding that we are ultimately people pitching to people, so you must “click” in an often all-too-brief interaction.
You’ll be committed in business to this investor for the next decade or more. So, while you’re attempting to navigate the numbers — the odds against you — you’re also trying to figure out a VC's history, personality and perspectives. How have they been burned before? Can we be empathic to their businesses of the past and assure them our business is a worthy investment … all in 30 minutes or less?
So, how can women successfully fight for funding?
The simple answer: We cannot do it alone. Like most professional endeavors, seeking funding is ideally bolstered by a social network. While I wish I could say women intrinsically have everything they need to excel in the world of venture capital, I believe we require allies and support beyond basic networking and spanning gender and race.
We need everyone who has a stake in the game to join the fight for women, with focused attention on the challenges encountered by women of color. We must acknowledge the potential danger to female founders and investors in working from a survival mindset and provide them the coaching and guidance they need to step into funding discussions practiced, prepared and able to speak on behalf of a company with greater strength.
Said simply, we need to trust in the ability and potential of women on both ends of the deal, with no strings attached.
And so, my final question to founders and investors everywhere: Are you willing to join our fight?