Venture Forward Series — LA
The Riveter x Christina Vuleta presented Venture Forward, a conversation series focused on helping women entrepreneurs take their next step forward. The panel discussions, held live in LA, Austin, and Seattle, featured three funders answering questions from three early-stage founders with a focus on overcoming the challenges startups face in scaling their company (reposted from The Riveter).
Timing, Testing, Tenacity and Other Advice on Fundraising While Being a Woman/Person of Color
June 26, 2019
In LA, early stage founders of a mental health focused social network, a cannabis care startup, and a party planning marketplace got guidance on what qualities funders look for, navigating speed to market, and how to access to funders as first-time women and POC founders.
Funder Panel: Sara Christensen, Angel Investor and Advisor; Jenna Jackson, Imperial Capital; Raina Kumra, CEO of Juggernaut, early stage investor.
Issue 1: Balancing being a strong leader and team player while developing the qualities that attract funders.
Ana Pompa Alarcón knows the power of trust. Her startup, findSisterhood, is an anonymous social network for women to discuss issues that are deeply personal but often hard to talk about publicly. Anonymity, which may at first seem less authentic, is exactly what provides the safe space to open up about vulnerable topics such as sex, relationships and mental health without fear of judgment, taboo or competition.
“We want women to feel safe to share anything on their mind with other women, get support, give feedback, and share wisdom. There are so many things that we still can’t talk about as a society, and especially as women. We are disrupting these conversations.”
Unlike other social networks and anonymous spaces findSisterhood doesn’t collect data on the identity of their users. From the start they engaged community managers on the app 24/7 to prevent bullying.
“We employ sentiment and content analysis to identify high traction discussions and connect users with brands and non-profits to inform and educate them in the best possible way.”
It’s striking a chord. Since launching in 2018, the findSisterhood community has expanded to 31 countries.
Alarcón’s Question: I want to be a strong leader for my company as well as an ally for other LatinaX founders. As investors, what qualities do you look for in founders?
The Advice:
Sara Christensen, an active investor in female founded and led businesses, compared the process to finding a mate for life. The first thing Christensen looks at is whether a founder has the experience and expertise to build a company. Second, she looks for the drive and discipline required to handle the unglamorous part of startup life.
“Will a founder breathe, sleep and dream about their company?”
Third, she makes sure their values are aligned.
“Of course, when a founder tells you their story you look for authenticity. But a good story is a nice-to-have. A clearly defined opportunity and financial model are must-haves.
It comes back to what problem you are solving.
“You need a founder to say, ‘Here’s the problem, here’s the need, here’s the opportunity, here’s how I’m solving for it, and here’s how we are going to win. That’s the short list of boxes to check.”
Jenna Jackson, managing director of Imperial Capital and investor has come to appreciate a founder’s ability to hire for their weakness.
“I see a lot of founders who are controlling to the point of damaging their business. It’s impressive when a founder has the humility to say, ‘I’m the best person in the world at this, but this person is the best in the world at that, and I’m going to hire them and let go of that’”.
Alarcón, who acknowledged the obstacles of raising money as a LatinaX woman, expanded on her question, asking the funders, “How much time do you spend with a founder before you decide to invest?”
Christensen acknowledged that there are cases when an investor knows they are going to buy somebody in the first meeting, but typically a funder wants to spend some time seeing if the founder is up to the task and has the team to fulfill their vision.
“Start raising money a long time before you actually need to raise money. Build the relationship a year or six months out so when it does come time to raise, the conversation can go a lot quicker.”
Jackson agreed.
“The worst thing you can to is hand an investor a deck and say ‘We want to close in two months.’ Due diligence on a deal with someone you trust and have known for ten years, and someone you have just met, is very different”.
Jackson always looks for product testing.
“If the company is pre-product, I look at every mock-up and I want to meet the engineering team, because sometimes there isn’t one”.
Raina Kumra, early-stage investor & CEO of Juggernaut, encouraged Alarcón to connect with the Latinax investor community to instigate movement building early on.
“It starts grassroots. Systemic change is very hard. I’ve been on all sides. I’ve been the only woman in the room and I’ve been the only brown woman in the room, many, many times. At the same time, you don’t always get funding from the places you think you will. So talk to anyone and everyone about it.”
Issue 2: Access to Funders as a Woman of Color in the Cannabis Space
The more Whitney Beatty experienced the legitimate benefits of cannabis, the more she become frustrated with the lack of appropriate storage and care for it. Beatty set out to fix the frustration with Apothecarry, a 3-year old cannabis storage startup.
“The easiest way to describe my offering is that people keep wine in wine fridges, they keep liquor in bars and they keep cigars in humidors. But most people hide cannabis in a shoe box underneath their bed”.
Before she was CEO of Apothecarry, Beatty had built a successful career in TV and film. Then one day at work she had an anxiety attack. The experience stopped her in her “type A” tracks.
“I had gone after everything I had ever wanted in life. So I went on mission to fix my anxiety problem with the same drive.”
After several prescription-based attempts to reduce her anxiety failed to work, a doctor suggested cannabis. Beatty was hesitant at first as she didn’t have any prior experience with or connection to the cannabis space. Then she did the research and was convinced of its effectiveness. As she began treatment, she found the ritual left something to be desired.
“I was happy with what the plant was doing for me health-wise, but I was upset with the stigma of it.”
No one was putting the proper care into the whole ritual. There were a lot of accessories, but not a lot of storage options. And when you don’t use cannabis every day, it dries out. With both a child and a dog at home, creating a safe environment was mission critical. Beatty also sought a better way to share cannabis with her friends.
“I thought it deserved more attention and respect, so I did what any entrepreneur does. I did my research, I quit my job, I sold my house and I started my company as a single mother to a small child.”
Beatty built her MVP, graduated from a business accelerator, and raised a seed round of $50K. Now Beatty is raising money again, but doesn’t have a pipeline.
“I don’t have friendships with people who have a lot of money lying around. I raised $30K from a ‘friends and family’ round and that was $30K from people who gave me all that they could give me.”
She also experiences barriers as a founder of color in the cannabis space.
“Everyone here is aware that women aren’t getting the money from VCs we should be getting. And, I don’t know if anyone has noticed, but I have been a black woman my whole life, which makes it even harder to raise money.”
Beatty’s Question: I feel like I’m throwing introductions into the ether because I’m sending blind emails and not getting any responses. What is the best way for me to approach people in order to have them at least listen to this opportunity?
The Advice:
Jackson suggested tapping into both formal groups of investors, such as the Female Founders Network, All Raise, or 37 Angels, and informal pockets of angel investors.
“Women who write checks, get a lot of decks and often share decks with a friend. When you make a connection say, ‘I’d like to send you my deck and if it’s not right for you, would you do me a favor and send it to someone that would be great for it?’”
She also stressed the importance of starting your research with the investors who have put money into adjacent products.
“At least you will know that even if it’s a cold email you’re emailing someone who is interested in investing in the cannabis space.”
Raina Kumra, CEO of Juggernaut and early stage investor, shared strategies to get ahead of the ask.
“Ask for money, get advice. Ask for advice, get money.”
That’s what happened when she met with someone for advice on her mobile startup Mavin.
Sometimes having a conversation when it is not structured around a financial ask is an easier conversation.”
Christensen agreed, and pointed out the advantage to being in a hot category.
“There are funds and micro-funds surrounding the space, whether it’s touching a plant, or not touching a plant. There’s a lot of press around it right now so you can see who’s involved.”
Christensen added some tough but inspiring advice for the founders.
“You can’t give up, if this is what you want to do and you love it and you believe in it. It’s a brutal job to get people to write that check. You just have to find support groups who are going to help you get there.”
She shared the story of a successful founder she helped fund who got 278 no’s before the first yes.
“She just wrote and wrote and called and called and wrote and wrote.”
Issue 3: Navigating Speed vs. Stability in Consumer Go-To-Market
CEO and founder Tabitha Salomon started Party Dash to take the pain out of planning kid’s birthday parties for busy millennial parents. Sorensen enjoyed planning parties and was the first to volunteer to plan parties for coworker’s first babies and birthday parties for her friend’s children. As a product marketer, she quickly found the process tedious and the product design underwhelming — not helpful when she was working 70 hours a week at a tech company.
Sensing that other people shared her frustration she started curating products and selling them on Amazon, chalking up $250M in sales. That gave her the confidence to quit her job with the goal of disrupting the $11M children’s party planning category.
Salomon’s research found that parents visit between three and six stores when planning a child’s party, each experience more chaotic than the last.
Hypothesis confirmed she set out to build a platform offering original designs from award winning designers and a curated selection of beautiful products that are shipped directly to the home.
“You don’t have to guess if your selections from Amazon, Target and Party City will all go together. Party Dash will turn a process that could take up to 12 hours into something that could be done in 10 minutes, giving parents peace of mind and time back.”
As Salomon gets ready to launch, she has received conflicting advice. Many entrepreneurial leaders advise founders to “move fast and break things.” But she wonders if the advice to “get shit out there and see what sticks” works for consumer products.
Salomon’s Question: How should I think about “go fast” or “move slow and see what works”? What frameworks can I use to make decisions as a consumer-focused company where I only have one opportunity to go-to-market and build that first impression with my customers?
The Advice:
Christensen shared perspective both as a funder and through her experience cofounding Liquiteria, a pressed juicery in New York City.
“I don’t how many birthday parties some tech founders have thrown but when a mom has a bad shopping experience, she’s not going back. I always say that if it’s worth doing it’s worth doing right.”
Jackson agreed that what works for software doesn’t work for consumer. She encouraged Sorensen to prototype experiences and focus on rapid feedback and exceptional customer support.
“You want people to use Party Dash and use it many times. That experience has to be great. It has to be seamless and easy if you want that mom to say ‘I’m never going to use anything else again’. If it’s a disaster she is telling everyone in her preschool class and they are telling their friends and suddenly you’re not shipping anything to anyone’s house anytime soon.”
As a funder she looks at the customer experience very closely, interrogating return rates and returning customer rates to see if the customer is loyal and if the brand is the one they think of first.
Kumra suggested launching a decoy brand to test the proposition in a smaller market.
“You can see how that is going and work out all the kinks without spending a lot less money before you take it to launch.”
By Christina Vuleta
Christina Vuleta hosts Venture Forward events to help founders move their ventures forward, Mentor Accelerators to foster unstructured mentorship within organizations, and Venture Salons to accelerate innovation through wisdom exchange.
