Why We’ve Failed Female Entrepreneurs & What We Can Do About It
It was the beginning of 2017 and I seemingly “had it all” as a female founder. The company I co-founded was doing revenue in the millions and we had successfully raised capital in the millions, landing us in the extremely small subset of women entrepreneurs to have done either. We had not only expanded our team but had expanded offices and had two offices at some point. There were no signs of us slowing down. It should have been an exciting time. Not for me. I was mentally and spiritually exhausted and wouldn’t know why until I was forced to slow down.
One of the worst and best moments of my entrepreneurial journey at that point happened — I was asked to step down as CMO of the company I had co-founded to “make room for grey hairs”. I was shocked. I was confused. I was sad. I was angry. I was devastated. I was…happy. Yeah, you read that right. The more scaling success we achieved, the greater the pressure I felt for hitting numbers to appease investors. My exhaustion came from forgetting what actually mattered to me in building a business in pursuit of chasing numbers that would look great in a pitch deck. My devastation came from being attached to the idea that what we had built made me who I was and knowing I would have to reconcile and face that I had made that my reality. However, my happiness came from the relief to finally act on the urge I had repressed for over a year to go out and build something that would take on a system I allowed make me believe there was only one way to scale a company successfully. What I didn’t know then was that was the defining moment that would push me to make it happen by any means necessary.
Since resigning from that company, I’ve dedicated nearly 2 years diving into how to reshape outcomes and redefine the narrative of success for female entrepreneurs. I’ve obsessed about how to not only scale access but also how to create a new system instead of fixing a broken one. Just in case another person asks me how a Sociology degree can lead to entrepreneurship (ding ding ding) What really lit a fire under my ass is when I learned that 88% of female entrepreneurs make less than $100k annually, while only 1.7% make $1M+. I understand that for some female entrepreneurs, $100k is game-changing. However, we live in a time where we either tell women to build small or build a unicorn. We’re completely neglecting a massive group — those who live in between. They either want to raise capital later, haven’t decided yet, or don’t want to at all. They all have something in common — they want to understand how to build sustainable traction that scales so they have options to choose from.
Here’s why we’ve failed female entrepreneurs…
Venture capital will be our savior! I receive Google alerts on the terms “women entrepreneurs”, “female entrepreneurs”, “female founders”, etc. I can summarize the bulk of the articles floating around the Internet about female entrepreneurs. “It’s so hard to be a female entrepreneur!” “Why are female founders only getting 2% of funding?” “Here’s what female-founded company just got (Insert $ amount here)” Here’s the thing… I’m a proponent of venture capital if your company is appropriately structured for VC funding. What we’re missing is that the MAJORITY of companies are not suitable for venture capital. A very small population of founders, in general, will receive venture capital. Of that small population, only 2% of those dollars go to women. Is that a problem and should we fix it? Absolutely. However, it also signals how inaccessible VC is for most companies. The reality is that most companies should not raise venture capital because of the pressure cooker it forces a company into. Many founders don’t realize it yet but they’re not really about that life. Unfortunately, we have created a dangerous narrative through the rising glamorization of VC-backed companies like Uber, Away, Rent the Runway, etc without educating entrepreneurs about what it means to scale with the intention of building to a billion, going public, or exiting within 5–7 years and returning at least 10–30x’s your investors money. I wouldn’t be fuming when Shark Tank comes on or an article about a “successful” entrepreneur comes out if we were utilizing our media platforms to showcase multiple narratives around entrepreneurial success beyond VC-backed companies.
Context Matters: I’m proud of anyone, who decides to embark upon the entrepreneurial journey. You have to be crazy to decide to do something with a 90% failure rate. However, I’ve noticed a rising trend of events or interviews on entrepreneurs that tell their stories and take on the “If I can do it, you can do it too!” narrative. The intention is pure but this has led to more people proclaiming they’re entrepreneurs without ever having sold anything because they’re stuck at the inspiration stage and don’t understand the action involved to build a business. I believe the story is important from a motivational perspective. However, from a practical perspective that leads to action, it falls short.
It’s not enough to tell someone that if you did it, they can too because context matters. For example, I’m extremely proud of founders like Emily Weiss of Glossier. What she has built is badass and no one can take that from her. However, from a timing perspective, she built a blog at a fantastic moment and had access to networks that gave her the ability to interview people like Karlie Kloss. Giving context to how successful entrepreneurs have made it, doesn’t minimize their accomplishments. On the contrary. It gives us the data we need to strengthen the ecosystem by giving us insight into the context for what makes for successful entrepreneurs today, addressing patterns, and coming up with solutions to fill the gaps. Right now, we still have many blindspots because the data is inherently biased. If we continue to operate from a place of inspiration instead of fact, how can we improve outcomes?
Networks are Everything: I would not be where I am today without access, specifically, access to networks that had insight and connections to help guide me as I’ve built companies. I’m a black female founder who has scaled $1M+ company and raised venture capital. Technically, I’ve beaten the odds in many ways. Did my family invest in my companies? Nope. They didn’t have the means to. However, as soon as I was admitted into one of the top schools in the world for my undergraduate degree, it opened up access that would have otherwise been far more difficult to obtain. Plus, it granted me social validation to “gatekeepers”.
For example, it is a well-known fact that the majority of VC’s will only invest in founders if it’s through a “warm intro”. For those of you not familiar, a warm intro is similar to when someone you know tells you about a new product or service. It’s proven that consumers are 84% more likely to make a purchase if a friend or family member recommended it. This is similar to how investors decide to invest in founders but VC’s take this to another level.
For example, I recently listened to an interview with Brian Koppelman, and Marc Andressen. Andressen is one of the founders of arguably one of the top venture funds in the world. In his interview, he mentioned that of the many deals he has invested in, he has never invested in a founder from cold outreach, i.e that didn’t come from a trusted source. His argument, along with many VCs, is that the warm intro not only helps to minimize risk but also proves that the founder has enough hustle to “get the job done” by any means necessary.
Although I can understand the logic in this argument; when I start to invest, I will try to minimize my risk as much as possible too; this limits diversity in deal flow because the majority of investors pipelines continues to be representative of their backgrounds, which many times is white, male, and/or ivy league. There are many other founders who have amazing companies that don’t fit that profile. However, since many founders don’t fit this profile, their networks don’t have any crossover with VC’s and sometimes aren’t even 3rd, 4th or even 5th-degree connections. It’s not that these founders don’t have what it takes, they simply don’t have access because their networks don’t overlap. This is similar to getting into rooms to pitch a strategic partnership, sell a service, etc. A founder not having direct access to these networks that could open doors does not mean that what they’re building shouldn’t exist.
Here are a few practical and actionable solutions I propose we can start focusing on…
Optionality for Growth: We continue to romanticize billion-dollar unicorns who raised a ton of capital. Their stories are important but aren’t the only stories of what scaling success looks like. Also, let’s be clear. Founders who raise capital will tell you that it is NOT indicative of success but that part is often left out as we celebrate the dollar amount raised. Let’s start including the stories of founders who are building scalable businesses like Jabari Johnson, who turned down $1M from investors when he was strapped for cash or Jane Lu who bootstrapped her way to building a $30M empire.
Why is the full story important? It gives founders an idea of what alternatives for success look like so they can imagine different scenarios for how to scale. You can’t be what you can’t see, right? Unfortunately, if you’re not a female entrepreneur who has already decided to scale with venture capital, you are dubbed a small or ”lifestyle” business. Nothing is wrong with building a small or lifestyle business. However, we’re leaving out a ton of female entrepreneurs who want to scale sizeable companies. If we focus on showing female founders how to build sustainable, repeatable, and scalable traction instead of just focusing on a check, we all win. She gains the power to choose, she can start to build wealth, she’s able to contribute to the economy, and if she chooses the institutional capital route, her company is a much more sound investment.
How can you help a female entrepreneur build sustainable, repeatable, and scalable traction? Purchase her products, spread the word, make an intro to a contact at a company she can sell her software or service into, etc. These are just some suggestions. Comment with your recommendation for other ways we can support female entrepreneurs scaling success.
Practical Knowledge Sharing for Scale: It’s crazy that in just the last few years, we have learned to share almost anything with strangers from our cars to our homes to our clothes. However, when it comes to sharing practical knowledge, we’re falling short. Instead, we’re click baited into 5-min videos on Youtube that tell you that you’ll be successful overnight.
One way to solve the “If I can do it, you can do it too” conundrum is not by just saying why and what you do but also explaining how you do it. I would argue that the majority of entrepreneurial content today is rooted in inspiration but lacking the practical steps for getting it done. On my show, Get Sh!t Done, I interview female entrepreneurs who have scaled companies successfully. Instead of focusing on their story for the entire episode, I have them walk the audience through something specific they’ve done to grow and scale. The practical stuff isn’t always “sexy.” However, the practical details are what turns ideas into empires.
This is why practical knowledge sharing is important to helping female entrepreneurs scale companies. If you’re an entrepreneur who has done it or doing it or if you’re an employee working at a company with specific expertise, sharing practical tips on how to do something integral in scaling such as customer acquisition, self-care, financial modeling, pitching, etc is extremely valuable.
Community — widening access through proper utilization of networks: In order for this solution to reach its full potential, we all need to be involved. I’ll address each group individually.
- Women Entrepreneurs: I spend every day interacting with and supporting female entrepreneurs. I see you fighting to make your vision a reality BUT you cannot do it alone. I’ve seen this time and time again with women where we try to be Wonder Woman and don’t open our mouths to ask for what we need. Don’t dance around your needs or feel like you’re a burden. Make declarative statements and asks such as “I need mentors. Who would you recommend that does x, y, or z”, “I need introductions to investors. Would you be willing to introduce me to (insert investor) at (insert fund) ”, “I am now accepting checks? Would you like to invest in this opportunity?”
- Investors: Investment dollars are at an all-time high but capital isn’t being deployed equitably and big opportunities are being missed. Are all investors assholes? No. Some are though. While female entrepreneurs are trying to figure out how to get into rooms with investors, investors are depending on a few rooms to create deal flow. These rooms are typically ivy-league, white, and/or male hence why the companies capturing the majority of investment dollars are typically ivy-league, white, and/or male. In order to diversify deal flow, investors have to be willing to step outside of your networks. Similar to female entrepreneurs make a declarative statement in your asks. “I’d like to diversify my deal flow but finding limitations in my current network to make this a reality. Are there are any founders or people you think I should talk to from underestimated communities to help me diversify my current pipeline?” Many investors love Twitter. If you fit into this category, put it in the Twitterverse to expand your reach. This is not charity. It’s smart business. Women control 80% of purchase decisions and between Black and Latin X millennial consumers, there is $2.5 trillion combined spending power. Investors have a massive opportunity to get a sizeable return by investing in founders who understand and are innovating in these markets.
- Non-entrepreneur and non-investor ally’s: Oftentimes, conversations about the entrepreneurial ecosystem are split into the two camps above — entrepreneur or investor. However, I believe one of the most untapped resources are corporations and talent at these companies. Big companies have the ability to hire top talent in the world. You know what founders could use — advice from the top talent in the world. If you’re awesome at what you do in areas like marketing, sales, accounting, law, basically anything important to scaling a business, you can help! Founders may wear all of the hats but that doesn’t mean that all of the hats look good on us. They could leverage your expertise in areas that are weaknesses to better navigate where to focus now to scale.
4. Friends & Family: Did you know that entrepreneurs are more likely to face depression than the general population? It’s very common for us to feel alone and that we don’t have the support of friends and family. Actually, sometimes we feel that we have more support from 2nd and 3rd-degree connections. This is not to say that you’re the problem. We all make choices and as entrepreneurs, we made the choice to take a risk on something that has a high likelihood of failing. That in itself is beyond stressful. However, you can help make this crazy journey feel less lonely. Even if you don’t understand what the hell we’re doing or think it’s crazy, encouraging words, a gift card to a massage, or just a beer together to let us vent without judgment or maybe not to talk about work at all, can go a long way.
That’s why I’ve built Get Sh!t Done and launching programs like our accelerator to tackle the scaling challenges faced by female founders instead of just talking about it. I’m done talking. Let’s start doing in a way that makes outcomes more equitable. In order to do so, we can no longer pigeon-hold female entrepreneurs to two options for building a business, which means we need to nurture those in between lifestyle and unicorn. That’s where I’m placing my bet.
Founder & CEO, Get Sh!t Done