Raising capital as a startup founder, especially as a female founder, can be a daunting challenge. In a recent webinar, Sarah Park and Dr Kathleen Lucere from Even Capital shared their insights on navigating the venture capital (VC) landscape. They highlighted practical advice and strategies to empower female founders looking to raise funds. Here’s a summary of the key takeaways for startup founders considering a capital raise.
1. Understanding the funding gap
Female founders face a significant funding gap in the venture capital landscape. Despite data showing that female-led companies often outperform their male counterparts in revenue generation and overall financial returns, only about 2% of global VC funding goes to female-only teams. Even Capital aims to close this gap by investing in female founders or mixed-gender teams, demonstrating that investing in women can yield significant returns.
2. What investments Even Capital looks for
Even Capital’s investment criteria are clear and focused:
- Female founders with equitable shareholding: Companies must have at least one female founder with a significant shareholding—either the largest or equal to the largest in the company.
- Active role in leadership: The female founder must play an active role in the company’s leadership, ensuring their influence on strategic decisions.
- Venture scale potential: The company should have the potential for significant financial returns, aiming for a minimum of four times the investment.
- Innovative and disruptive: Even Capital looks for companies that disrupt existing markets or create entirely new ones, with a clear path to scale globally.
3. Practical tips for female founders
Sarah and Kathleen provided several tips tailored to female founders navigating the investment landscape:
- Tell your most optimistic story: Investors want to see the big picture and your most ambitious vision. Female founders often downplay their potential by presenting conservative forecasts, but investors are trained to vet these stories. So, aim high and let investors challenge your projections rather than underselling your business from the start.
- Network strategically: Networking is crucial but can feel uncomfortable, especially in male-dominated spaces. Start where you feel most at ease, such as female-founder networks or sector-specific forums. Approach networking with a clear goal—identify a few key people to speak with and have a purpose for each conversation. Consistent, focused networking can significantly impact your startup journey.
- Understand your market size from the bottom up: When presenting your market opportunity, use a bottom-up approach rather than relying solely on broad industry figures. This involves calculating your potential market size based on the actual number of customers you can realistically serve and the revenue you can generate from them.
4. Navigating bias and building confidence
Kathleen and Sarah discussed common biases female founders face, such as the perception that women are more risk-averse. They argue that women are not necessarily risk-averse but are more risk-aware, which can be a strength in building a sustainable business. Female founders often bring a more calculated approach to risk, considering financial implications deeply, which can ultimately drive better business decisions.
Additionally, confidence plays a crucial role in pitching and fundraising. Female founders are often seen as lacking confidence compared to their male counterparts, which can affect how investors perceive their competence. To counteract this, Sarah and Kathleen encourage founders to project confidence, even if it feels forced initially. Pitch with conviction, showcase your accomplishments, and remember that self-assurance can be as persuasive as the financials you present.
5. The importance of telling a compelling story
Beyond numbers, investors are looking for a compelling narrative. Female founders should focus on storytelling—articulating their “why” and connecting deeply with the problem they’re solving. A strong, clear vision of how your solution addresses a market need can differentiate you in a crowded field of pitches.
6. The investment process at Even Capital
Even Capital follows a straightforward investment process that is accessible and transparent:
- Initial application: Founders can apply directly through their website without needing referrals, lowering the barriers to access.
- Pitch and due diligence: After an initial review, founders present their pitch, often accompanied by a product demo. This stage is crucial for both parties to assess compatibility since the relationship between investor and founder is long-term.
- Final investment decision: If successful, the company moves to a more detailed due diligence phase, followed by a final decision from the investment committee. The process is designed to be inclusive and supportive, with feedback provided even to those who do not make it through.
7. Overcoming challenges unique to female founders
The challenges of raising capital are not unique, but female founders often face added layers of difficulty, such as smaller funding rounds compared to all-male teams. Even Capital is actively working to change this by writing larger checks earlier in the process and being a supportive partner beyond just financial investment.
Final thoughts
For female founders, raising capital requires resilience, strategic networking, and the ability to project confidence even in the face of bias. By understanding what investors like Even Capital are looking for and adopting a bold approach to storytelling and market sizing, female founders can better navigate the funding landscape. The journey is challenging, but with the right approach and support, the potential rewards are immense.
Watch the full webinar
Check out the full webinar below:
What’s next?
- Sign up for future Startup Sessions here.
- Email Chris O’Neill, Senior Innovation Specialist if you are interested in founder or coaching support
