Fundraising While Female

Lauren Kay
Apr 5, 2019 · 8 min read
Photo by Gimlet Media

I wrote the original version of this blog post back in 2015. It was a whole different world back then. Before #metoo. Before Trump got voted in over Hillary. The world’s way of reinforcing that when it comes to two imperfect candidates, the man will always win.

This week, I have returned to thinking about the subtle and not-so-subtle sexism that pervades Silicon Valley. While Elizabeth Holmes’ infamy grows, Parker Conrad, who was fined for half a million dollars by the SEC for misleading investors and committing insurance fraud at his last startup, just announced a $45 million dollar Series A round for his newest venture.

Few would doubt that Holmes’ fraud, which put people’s lives at risk, was more severe. But I do wonder, if their genders were swapped, if Conrad would have been given a second chance in Silicon Valley. Or if Holmes’ fraud — along with her hair, her clothing, and her voice — would have been scrutinized as intensely.

Y Combinator funded both of Conrad’s startups — Zenefits, which was sued by the SEC in 2016, and his new startup, Rippling. I took part in Y Combinator in 2014 while running my startup, Dating Ring. I started this post after participating in Y Combinator’s Demo Day, a frenzied mess of an afternoon that is spent running around and schmoozing with old, white men, trying to convince them to believe in you and wire you money.

When I was in Y Combinator for my company, I was told a few times not to waste time blogging about gender and tech. Then again, that was just YC’s mantra — don’t do anything that doesn’t directly lead to growth. As long as you grow, everything will be fine, or so they told us.

And so we focused on growth. For a year, my cofounders and I worked 100-hour weeks, all major holidays and weekends. We gave up social lives and had one of the most impressive graphs at the crazy 78-company Demo Day YC hosted — 60% MoM revenue growth, with 25k in revenue for March.

We had more press and name recognition than any other company there, and my pitch was named as one of the top 8 by TechCrunch.

Out of the 500 investors there, only one invested.

We were told that our product was too ‘early’, that the dating space was too ‘tough’. Meanwhile, Zoosk was filing for an IPO (which ultimately failed) and 1-year-old Tinder was being given a 9-figure valuation. Unlike the spaces many of my peers occupied, dating seemed ripe for innovation. There are few companies out there with more than a few million in funding, and if you end up winning in the dating space, you easily have a billion-dollar-plus company.

This was my second company, the first of which I started at 19, which is still operating and profitable. My CTO had brought in millions for Zynga and my COO had somehow managed, on her own, to coordinate hundreds of dates per week.

I knew the founders of many other companies pretty closely — their backgrounds, their revenue, their valuations, how much they raised. Sure, it’s comparing apples and oranges, but one company (with a 6’ tall, attractive white, male CEO) that was pre-product and just a few LOIs raised over a million with 3x the valuation. A smaller B2B company that had 10% of our revenue raised the same amount as us, at twice the valuation. Another B2C company, with a quarter of our revenue and much stronger, well-funded competitors, raised 3x what we raised, at twice the valuation. The main difference? They were all run by all male founders.

Everyone told me fundraising would be bad, but how bad could it be, I thought. Pitching was my thing — I have a background in theater and improv; my strongest skills are sales and marketing; I had personally pitched my company to hundreds of people and gotten them to sign up. Fundraising seemingly was a bunch of quick meetings where you got people to like and trust you and write checks. I could do this.

Well, I couldn’t. I had 40 fundraising meetings, I sent over 300 emails requesting meetings, and tried to get in touch with another 500 investors. While it’s hard to ever know exactly why you’re being rejected by an investor — and while I didn’t want to blame any of it on my gender — by the end, I knew it had played a role.

The first investor who tried to invest was drunk at Demo Day and got handsy with a cofounder, so he was out. Demo Day is a pretty difficult ground for anyone — but especially women to navigate. It’s extremely intimidating walking up to older men, getting them to make eye contact, and then convincing them to fund you through a quick convo. It’s also extremely easy to confuse these approaches with flirting — which is exactly what happened.

Fundraising is all about signaling, and because we didn’t accept that first big check we were offered, we had little leverage to go on. There’s also a ton of back-channeling in the very small investor circuit, so it’s possible the investor talked poorly about us to others.

While this post isn’t about the easy to spot sexist actions, I find that it’s hard to gain credibility without the direct stories. So here are a few more: One investor took me to lunch, said he wasn’t interested in investing, and wanted to ‘test’ the product out by going on a date with me. Another investor introduced me to a group of fellow investors as ‘the beautiful CEO who has two other beautiful cofounders’. Another never followed up with me after our meeting, but a month later invited me to an event his VC was holding with a ‘PS — this is a personal invite’ (meaning I was invited as a date, not because I was being considered as a potential investment). Another investor met with my CTO, held off on investing, and then asked one of our matchmakers if he could be set up with our CTO, or someone like her.

And on. And on. I’ve heard much worse war stories from other female founders.

I’ve been told over and over that this sucks — but won’t it feel ‘so good’ to get back at these investors by making a successful company without their money? After all, if I really am worth funding, shouldn’t I be able to do it without their help?

Well, maybe, maybe not. We were up against companies with millions of funding, or hundreds of millions of revenue per year. We needed a large team to be able to build a great product. We were able to get to 25k in revenue, tons of press, and a sizable user-base with no funding, but it’s very hard getting past this point with a small team. Imagine if Uber tried to prove their product with $300k in the bank. They couldn’t. We needed tens of thousands of users to prove what we were trying to prove, and acquiring users in this space is very costly, thanks to bigger players like The most feasible acquisition channel, Facebook, kicked off all dating companies other than big players like Match, making it even harder for smaller players to gain a foothold in the market.

Seed investment is made on little more than a discussion and gut feeling. While I think that the large majority of investors aren’t sexist pigs, here’s the easiest way to explain it: When a guy (especially an attractive, white guy) walks into a room, especially with the YC brand behind him, many investors will see him as fundable until proven guilty. Show a few strong points to prove the case — number of downloads, strong founder backgrounds, confidence in the product, and the check is in the bank. But as a woman, you’re often faced with tougher questions, and have a lot more work to do to gain investors’ respect. For companies attacking a giant problem (like dating), who will surely have many, many problems with their business at the seed stage, it can be much harder to win over much-needed seed investment that other founders are able to access through boys’ club connections and bravado.

It’s easy to spot direct sexism, and to react to something like an investor getting handsy. But the subtle sexism that hinders women goes ignored and is often denied. Fundraising decisions are often made off of little more than ‘gut instinct’, and research shows that these gut instincts favor men and disfavor women. Subtle sexism is something that needs to be addressed and fixed, so that male and female founders can get the funding they need.

After 5 years of running Dating Ring, we officially shut down the company at the end of 2018. We made every payroll and paid every employee. We survived for 5 years primarily off of revenue we brought in, with some help from the small seed round we raised. Over the past decade, no startups without VC funding have seen large-scale success in the dating space. Many have become household names, but I doubt that any, aside from Tinder or maybe Bumble, could be considered profitable. User acquisition is too expensive, and apps need millions of users to succeed.

One final addendum, that I wish I had addressed in my original post. As founders, we were still incredibly lucky to take part in Y Combinator, and to have a handful of great investors who believed in us. We were able to live the Silicon Valley ‘dream’ (or in our case, nightmare,) and while we did not have male privilege, we did have white privilege. We did not get far enough to succeed, but our privilege did get us far enough to start. This is something that is denied to many founders, who are not young, white, and cis-gendered. Silicon Valley has a lot of work to do, and I wish more progress had been made in the four years since I originally wrote this post.

I love connecting with and supporting fellow writers!

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Lauren Kay

Written by

Founder & writer / Rep’d by @sabrinataitz at @wmebooks / / /

The Startup

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Lauren Kay

Written by

Founder & writer / Rep’d by @sabrinataitz at @wmebooks / / /

The Startup

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