Investing in Startup Women | Insights from Jackie Vullinghs (Airtree), Holly Cardew (Carted) and Jason Atkins (Cake Equity)
As a digital recruitment agency that works with a lot of startups, we know that finding funding is one of the major (and largest) hurdles that founders face. From venture capital, angel investors, accelerator funding, bootstrapping and beyond, capturing capital is an uphill battle and for women, that hill can be even steeper. But things are looking up!
A 2017 Startup Muster report showed a rise in the number of women founders in Australia at 25.4% — up 1.9% from the previous year. In comparison to other countries, particularly the US, the Australian startup scene fares much better. But all that considered, it is still notoriously difficult to get capital, notably more so for female founders.
There’s no better time than now to have a discussion on how we can help more women make the leap and get funding, which is why we were so excited to get involved in the ‘Investing in Startup Women’ event. For this event, we partnered with Amazon Web Services, Cake Equity, Tractor Ventures, Australian Computer Society and River City Labs to find out more from three very successful experts who intimately know the fundraising and capital raising space.
We wanted to share with you a few of our key takeaways from the fabulous panel which included:
- Jackie Vullinghs – Principal at Airtree
- Holly Cardew – Co-Founder of Carted
- Jason Atkins – Co-Founder of Cake Equity
Let’s get into it!
Rocket ships vs. Tractors
We love this analogy by Tractor Ventures describing startups as tractors. Read the full anology here.
“I never liked the term “unicorn” for fast growing tech companies. I always preferred the analogy of a rocket ship. They do exist, and when built well can do amazing things for all the people involved, and humanity… Rockets have a downside, that is, they’re complex and hard to build making them expensive… Tractors, though less exciting than rockets, are the real workhorses. They’re reliable but most importantly, they optimise for efficiency in the workplace… Building a tractor isn’t free, but for founders who have deep experience in the problem they’re solving, they’re much cheaper than rockets. What rocket ships do is exciting to everyone, what tractors do is exciting to their specific set of customers.”
Network is important
You know the ol’ saying, ‘your network is your net worth’. Well, we can confidently say this applies to raising venture capital. Early-stage venture capital is almost entirely people-driven which ironically signals why this industry is very likely to be the last to become digital. This means building a strong network (that trusts you) and maintaining that momentum during your funding rounds plays such a critical role in finding investors. This feeds directly onto our next point…
Be active on social media, especially LinkedIn
Social media and projecting your personal brands is one of your absolute key weapons in your journey to finding funding. But which platforms are best for reaching startup investors? There are two simple answers to that:
- What platforms are your ideal investors on?
- What platform will help you build momentum?
White there are certainly advantages to claiming your online real estate across all channels, our panel suggests focusing on two key platforms: LinkedIn and Twitter.
These platforms are great for:
- Building social proof (and trust, ahh there’s that word again!)
- Spreading awareness of your journey – humans, even investors, make emotionally-driven decisions and want to feel like they are part of the journey
- Creating urgency for your startup and ultimately,
- Showing why people should invest in you.
Not only can you become a thought leader in your industry, you can also use these tools to directly reach out to your favourite investors and start pitching. This is how Holly Cardew, Co-Founder of Carted brought a key investor on during her US$13million raise. She simply tweeted her top 5 favourite investors including Honey (acquired by PayPal in 2019) and managed to get one of them onboard! Speak of a #SuccessStory.
Ps. Notice how we didn’t hashtag #OvernightSuccessStory? Sure the tweet worked well but it was Holly’s 9 years of personal brand building as an industry voice that made this possible. So don’t just post once and give up, keep going!
Do your homework
One of the common mistakes people make when seeking funding is getting caught up in the money and not looking at who is writing the cheques. It is so important to find the right people and get connected to the right circles, making sure your investors are the types of people you want to align with. And this just starts with a conversation! Get on the phone and reverse the conversation / pitch by asking the investor what they are looking for. This ensures you are not wasting your time speaking to the wrong investor and also vets that this person is the right person for you and your venture.
Same goes for finding an investor that values diversity. Do your homework and see if the investor has invested in women before.
Get good at storytelling
A common theme that just kept popping up during this panel is storytelling! Crafting the vision for your company and being able to convey that story in a compelling manner can truly make or break your pitch.
Something that Jackie Vullinghs, Principal at Airtree, said that captured our attention was that investors jobs are to “invest in the improbable”. So paint the best case scenario picture – what could your startup achieve if ALL the stars lined up perfectly? Investors are smart people, they know that not everything will go to plan but they need to know how well it could all go too.
Following on from that, once you can tell your story in a compelling way, it’s time to create momentum and some serious #FOMO for your investment rounds! FYI, that means Fear Of Missing Out.
Your past experience and success will determine future interest. Once you can get that ball rolling, expect your calls to accelerate and really deep dive into understanding someone’s business problems and outlining your ability to solve that problem, plus what the outcome you’re looking for is.
Paint a more ambitious picture
It’s been shown that men are historically better at overstating their potential success. In turn, they are offered great funding opportunities. So it goes without saying that we should encourage women to do the same. The key advice here? Dream bigger and aim high. Ask yourself, “if I had $100 million in the bank right now, what would I build and what is my ambition?”
It’s a full time job
Like Rome wasn’t built in a day, the same goes for fundraising. It is expected getting a solid round done takes approximately three months of constant hustling with roughly 120 meetings at minimum. The first 30-40 of these meetings should also be with people who invest in your niche and in your stage of raising. It’s safe to say, expect to have the same conversation many times. But this feeds into a must-have for any founder going through this process: a strong support system.
Fundraising is a tumultuous journey where it difficult to balance family, getting investment and looking after yourself. But it goes without saying that you have to be all in. Here’s our panels’ top advice for managing your rounds:
- Know your support system – they are the unsung heroes of your world
- Be clear with your family / partner / Co-Founder about your commitment to fundraising
- Save money and get your runway as long as possible
Unconscious bias exists
This is more something to be aware of than something to focus on. For example, gender bias exists. We know that. Ignoring that doesn’t help anyone so acknowledge it, put the necessary framework in place to minimise it (where possible) and go forward!
Location, location, location
No surprises here but location matters! According to our panel, when looking for Australian investment Sydney is the place to be. If you don’t have a network in Sydney, it might be time to start building that. But don’t let this stop you from searching elsewhere. The biggest plus of living in a digital economy is the internet (and the huge rise of video platforms such as Zoom). Nowadays, so many investor meetings are conducted over Zoom which means they can be done anywhere (pending a good internet connection)! So don’t think of location as a barrier. There are a lot of big investors in the US waiting to be pitched to!
Don’t take ‘no’ as ‘never’
And finally, a motivational takeaway courtesy of Jackie Vullinghs, Principal at Airtree, “Don’t take no as never – it means not now.” During this process, it’s important to be okay with hearing ‘no’ and it’s something you will likely hear a fair bit. But it’s important to remember that investors are looking for certain things at different stages of investment. Maybe they don’t understand your vision at that time but that’s not to say they won’t in the future. Doubling back to one the last points, you need to answer the question of why you are the person who can solve a particular problem and of course, building and maintaining that FOMO.
On a side note, would you give $500,000 to someone you don’t know or trust? We wouldn’t! And it is rare investors will either. They want to get to know you, your journey and your success – so show them! Once you receive that first ‘no’, put a note in your calendar to connect with them quarterly. The first ‘no’ is where the work begins.
Final top tips on putting your best foot forward
- Be persistent and speak to as many as possible
- Have strategy in mind when getting investment – don’t just seek money without thinking how and what you need from them specifically
- Segment your investor database – find investors that have a track record of investing in your stage, your niche and a diverse range of founders. We hate to say it but if an investor has historically only invested in people that look and sound like them, they might not change and your startup can’t wait! Also, if an investor historically doesn’t invest in people from other races, religions, genders, backgrounds etc., are they really the type of people you want to work with?
- Get a coach! Finding someone that has gone through the process will probably become your best friend
- Download Cake Equity’s fundraising toolkit
- Check out AirTree Ventures‘ free resources available on their website
If there is anything we have learnt from this conversation, it’s that the startup community is full of exciting founders to keep an eye on, especially women! We have no doubt women founders are going to continue to thrive and inspire more women to enter tech and venture into entrepreneurship and we love being able to help shine a spotlight on those women and incredible startups.