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This is what women endure when trying to raise capital

In a survey of female founders conducted by Fast Company and Inc, nearly 62% said they experienced bias during the fundraising process.

“The most succinct way I can describe it is: I have noticed that men receive what I call a ‘presumption of competence’ that women don’t get.”

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That’s what one female founder told us in a survey of 279 women entrepreneurs conducted by Fast Company and Inc. We asked founders about their businesses, employee demographics, fundraising efforts—even their political leanings. Funding, in particular, was a source of frustration for many women, which comes as little surprise: In 2017, just over 2% of venture capital funding went to companies founded by only women. (Founding teams with both men and women received about 12% of the $85 billion raised overall.)

Of the women we heard from, about 63% used at least some angel or venture capital to finance their startups (and the rest dipped into their personal savings). Many of the founders who raise capital said they experienced bias—largely on the basis of gender—as they tried to fundraise. Some said pitching investors felt especially difficult because it was so time-consuming. “Fundraising takes you away from the reasons you started the business in the first place: building a product, building a team, and building a company,” one founder said.

Here are some of their takeaways—and lessons—from navigating the funding process.

You’ll pitch men who don’t get your product

“Being an all-female management team, walking into rooms of mostly men and selling them on a female-targeted product was difficult. It took a lot of time to find the right investors—it’s like dating—and I felt we could usually tell early on in the conversation how it was leaning. There were a lot of snap judgements.”
—founder of two-year-old fashion startup with six employees

“Because most of the investors we pitched are not facing the same parenting challenges as the majority of parents in the U.S., it was hard for them to personally relate to the incredible impact our product was having on parents. We found some investors let their personal bias get in the way of seeing the traction we had achieved.”
—founder of two-year-old parenting tech startup with nine employees

“I was trying to pitch sexual wellness and period products to male investors, who literally every single time would say, ‘Let me take this home to my wife and see what she thinks.'”
—founder of five-year-old sexual wellness startup with 12 employees

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“In the early days, I had to convince male partners of VC firms that women would actually try clothes on together and share intimate stories.”
—founder of seven-year-old fashion startup with 36 employees

You’ll be underestimated

“One investor told me to my face that I come across as a ‘media spokesperson,’ not a serious CEO who fully understands my business.”
—founder of six-year-old media startup with 15 employees

“I have a male cofounder and occasionally we would pitch VCs who would only address him, even though I was doing most of the presenting and talking. Our fundraising rounds were always oversubscribed, so we immediately dropped any individuals or funds who displayed that type of gender bias. I’m fortunate to have a cofounder who is highly sensitive to gender inequity!”
—founder of food company with 500 employees

“I was basically told I was too female, too old, even too blonde. (‘You do not look like a CEO.’) Why this matters is that any groundbreaking venture requires the founder to see something that is hard for others to visualize; then the founder raises capital based on their ability to get investors to buy that they’re really onto something. I found my insights and experiences were vastly underestimated by virtue of my gender.”
—founder of 10-year-old e-commerce platform with 90 employees

“Despite having revenue and a full, working business model, proving ourselves to investors as nontechnical female founders was very rough.”
—founder of retail company with 30 employees

“We are two female cofounders, serving the needs of sick babies, and we are sometimes underestimated by predatory investors or potential business partners. One potential investor asked, “If you are motivated by saving the lives of infants, why does valuation matter?” as he attempted to negotiate a ridiculous discount on equity. We asked him to leave politely.”
—founder of healthcare company with 25 employees

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“I was told a man could do a better job than me in my first year. I think that only got me going to prove them wrong.”
—founder of seven-year-old retail startup with 20 employees

“There were several times that it was outright articulated to me that funders were hesitant to get involved due to both my age and gender. No one thought a female could be successful in a male-dominated industry such as construction.”
—founder of five-year-old construction business with 20 employees

Your male competitors will land capital more easily

“Some investors said they funded young men—whose technology is not as good as ours—because they reminded them of ‘young versions of Mark Zuckerberg and Steve Jobs.'”
—founder of health tech company with 49 employees

“I’ve seen men with really bad ideas, no traction, and no path to traction raise millions of dollars. It’s just not that way for black women. Everything is scrutinized and the conversation starts at ‘no.’ You have to move them to ‘yes.’ For white men, it seems to be the other way around.”
—founder of three-year-old fintech startup with seven employees

“I’ve been told multiple times that ‘investors don’t fund professional services.’ However, there are several male-led competitors that have received capital.”
—founder of marketing company with 20 employees

Your pregnancy may count against you

“One investor told me they felt like there was too much pressure to close a deal because I was about to have a baby—therefore they wouldn’t have time to think about the deal enough. I was not putting any explicit pressure on that investor; I just happened to be pregnant.”
—founder of two-year-old parenting tech startup with nine employees

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“My two cofounders were both pregnant while we raised our first round. There was an immediate judgement when we walked into rooms—much more so when they were all men—that their pregnancy meant they would likely be unavailable, get over the concept, or not take our business as seriously as a man would.”
—founder of two-year-old fashion startup with six employees

Investors may make inappropriate advances

“It took a lot of conversations with many people to find those who understood the business. There were times investor meetings turned into unwanted dates.”
—founder of six-year-old finance company 

“I have been hit on and had angel investors set up follow-up meetings to ‘date’ under the guise of investing.”
—founder of three-year-old pet startup with five employees

You may have to raise the money yourself

“We had to find investors who believed in the idea even with a proof of concept. We had to bootstrap the idea and now, we are seeing more traction from investors.”
—founder of three-year-old leadership firm with 10 employees

You’ll have to make financial sacrifices

“My employees currently make more than me and it will likely stay that way until we are more successful. I’d rather put money back into the business and grow it ourselves and hope for a bigger payout later.”
—founder of 10-year-old career site with four employees

“I have gone many months without compensation, providing payroll out of my pocket.”
—founder of government services startup with five employees

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“We invested our downpayment into the business instead of buying a home. So we’re overall less stable and have less savings than we would have if I hadn’t started a company.”
—founder of two-year-old parenting tech startup with nine employees

“I have strained my marriage by taking small loans from our joint account to help make payroll during slow revenue periods.”
—founder of six-year-old pet care startup with 16 employees

You may feel like you can’t crack the boys’ club…

“Investors were noticeably more transactional and less willing to establish rapport with us. It was harder to build relationships and get to know them on a personal level, which makes it harder to convince them to take a chance on you, especially as an early stage company.”
—founder of two-year-old parenting tech startup with nine employees

“I have been told by potential investors that I would have a better chance of getting funded if my male cofounder gave the pitch—not because they felt he would do a better job, but because they felt the audience (male investors) would resonate with him better.”
—founder of two-year-old healthcare startup with five employees

“To me, raising money is by far the most overwhelming aspect of being a founder. Not only does it take you away from your day job, but it feels to be a boys’ club that is much more difficult for a woman to find her place in.”
—founder of two-year-old fashion startup with six employees

“I’ve been getting invited to more of these private CEO dinners and learning a lot from them, which has been great. Of course, there was a moment at one of them recently, where the partner of the VC fund that was hosting the dinner asked me to get him a glass of wine and hang up his coat. I was wearing a sweatshirt with my company’s name across the front, and the servers were dressed in all black. So, two steps forward, one step back.”
—founder of seven-year-old construction startup with 35 employees

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…But sometimes you can

“The company I started is particularly a company for women. Although I have been funded many times by venture capitalists, I was uncertain that this particular company could go to mainstream Silicon Valley venture capitalists and be accepted. But when I pitched our company to our series A investors, we received a unanimous vote from the partnership to take the entire A round off the table.”
founder of seven-year-old fashion startup with 36 employees

“My largest investors are a group of men from Dell, who normally invested in male companies that were tech driven. They have been very supportive, and many have reinvested up to three times. I’m thankful they took a risk on me early on and have been able to see the progress I’ve made as a female founder of a social business.”
—founder of seven-year-old retail startup with 20 employees

“My female cofounder and I secured our first round of venture capital while she was visibly eight-plus months pregnant. She is the CEO, but the investors didn’t question her ability to build and run the company.”
—founder of 12-year-old food startup with 1,600 employees

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About the author

Pavithra Mohan is an assistant editor for Fast Company Digital. Her writing has previously been featured in Gizmodo and Popular Science magazine.

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