What Does Funding Inequity Feel Like

I have always been comfortable being one of the women in a primarily male environment. I played soccer on a male-dominated team until high school. My MBA class was only 25% women. I work in tech. Getting into these schools, teams, and industries wasn’t easy, but I feel like I’ve been treated fairly and equally (most of the time) once there.

Then I opened up the Openview SaaS Benchmarks report, which collects data from privately held software companies. It is a treasure trove of facts only of interest to tech founders, leadership teams, and investors. As I was perusing their executive summary, I stopped at one glaring headline, “THE PLIGHT OF DIVERSE TEAMS: WORKING HARDER FOR LESS CAPITAL.”

It went onto cite their findings: “Companies with an equal or female-dominated leadership team grew at faster rates than their male-dominated peers (115% vs. 99% year-on-year growth). But despite their strong performance, these companies are struggling to raise capital. They’re 50% more likely to cite fundraising as something that keeps them up at night. Consequently, they’re raising only half as much capital ($10.9M vs. $19M).”

That is not data about someone else. I am part of that average. We answered that survey and WeSpire’s stats are so eerily similar that I double-checked the survey response volume. We are one of ~75 teams behind that inequity statistic.

As I have thought about how I feel about this data, I have mixed emotions. Primarily, I am so proud of what we’ve managed to accomplish. Startups are always hard, no matter what your gender. I have incredibly supportive team members, investors, and customers. So we had to work harder and figure out how to do more with less. That which doesn’t kill you makes you stronger, right?

I briefly played the mental game of “Wow, where would we be if we’d had another $10M?” Would we be three times as big? Five times as big? Or would our mistakes have been just that much bigger and more magnified? As many experienced board members will tell you, more capital is not always the blessing that it seems.

There are admittedly moments where I get that mash-up my daughter calls “sad-mad.” How many good people did I have to let go over these past years because we just didn’t have the cash to withstand what would be a normal bump in the startup journey? How many more hours did I have to spend fundraising for half the capital that other founders got to spend making their product better or meeting with prospective customers? Has another slower, worse company gained an advantage because we didn’t have the same funds to invest?

The very small club of female tech founders had a recent tragedy in our ranks. A founder disappeared after a fundraising meeting in Silicon Valley. She was found dead a few days later in her car after suffering what they believe was a manic episode. She had no history of mental illness. While clearly an unusual situation, it raises the most troubling question. What is the emotional toll of being told that your business isn’t scalable enough, that your team isn’t good enough, that your market isn’t big enough, that your go-to-market model is too expensive hundreds and hundreds of times, year after year? When what’s actually behind some of those nos is your gender, whether the investor realizes it or not? How do we really feel about systemic funding unequities?

One of my investors helped me confront the biggest impact this fundraising reality has had on me. He is a successful SaaS executive who took his own company public. He was asking me how much I was planning to raise in our next round. When I told him the number, he paused and said, “Why aren’t you thinking bigger? You have great metrics and customers and the market is finally accelerating in your direction. There’s not a lot of room for small-ball in SaaS.”  I knew exactly why I wasn’t thinking bigger. I had lost the conviction that it was even feasible to think bigger.

That’s when I got mad. At myself. Who builds a technology to change human behavior for the better that isn’t, at their core, thinking big? Who takes on customers like Disney and NBC Universal when they have 5 people in an incubator space that doesn’t fundamentally believe they can accomplish the hard things. I think big. It’s who I am. But I had let all those nos get to me.

His comment was just the kick in the pants I needed. Yes, when we go out to raise that bigger number, it wil feel hard. While the investor community is changing, there is still a long, long way to go. It’s not fair that it’s not fair. But fundamentally, WeSpire is a great, profitable company with a stellar future. The right investors will see that and will not notice, or perhaps will be thrilled, that the founder is a she.

Quote of the Week: “Whenever I meet a successful CEO, I ask them how they did it. Mediocre CEOs point to their brilliant strategic moves or their intuitive business sense or a variety of other self-congratulatory explanations. The great CEOs tend to be remarkably consistent in their answers. They all say, ‘I didn’t quit.’”

Ben Horowitz

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