How This Tampon Company Overcame Investor Knowledge Gaps and Raised $11.2 Million
As a female founder of LOLA, a venture capital-backed feminine care brand, the question I get asked most often is about fundraising -- what’s it like, as two female founders, to pitch your business to a predominantly male investor community? I figured it was finally time to share.
Here are three questions we received last year from extremely well-educated, multiple-Ivy-league-degree, married-with-kids, top-tier investors and CEOs:
- I see you are selling 18 tampons in a box. So, will that last a woman for 18 periods?
- Are light tampons for tiny vaginas and super tampons for large vaginas?
- When you use a pad, does the sticky part stick to vaginas or underwear?
Once you stop howling, please understand that these were some of our best meetings in 2016. These questions indicate that the people we’re meeting are comfortable and engaged. For us, the most important aspect of connecting with a male investor is throwing ego and taboo out the window and establishing basic understanding before we get into the pitch.
My co-founder Jordana Kier and I have fundraised three times since starting our business in 2014, raising $11.2 million to date, mostly from male investors. Each time we fundraise, we face the same challenges that other founders face -- how to find the right investors, how to frame the opportunity, and how to sell our vision. We also face a unique challenge in that we are female founders with a female product trying to attract capital from male investors. Last year in the U.S., 17 percent of Series A funded companies had female CEOs and roughly 90 percent of VCs were men, according to Female Founders Fund.
There’s a lot of hype about female founders and male investors. We get asked all the time whether it’s uncomfortable as female founders to pitch a room full of men about tampons. The answer is, no, not really. We got over that a long time ago. And anyone who is awkward about periods probably wouldn’t meet us.
The part that is different, however, is the education component that’s needed when pitching a period business. Many founders follow a standard formula for a one-hour pitch meeting -- company purpose, problem, solution, why now, why us (see here). That pitch sounds like a dream come true to me, but most men literally know nothing about how periods, let alone period products, work and they don’t have even the basic vocabulary to talk about the subject. Sure, they have seen a box of tampons under their sink every morning for the last 20 years but boy, have they never touched it! It is our responsibility to fill in that knowledge gap.
There are two silver linings here. First, we come in from a place of power. We know so much more about this topic than they ever will. We are experts. Of course, all good founders are experts, but the knowledge gap here is more extreme. This is advantage number one. Second, most men we talk to are dying to know more, but they have never been in a safe space to ask. We’re like the cool older siblings who gives their younger siblings their first exposure to [you fill in the blank].
I learned this from personal experience. One time, I left a book about tampons on my dresser and went to work. That night, I came home and walked in on my husband devouring the book. I’m talking door closed, glasses on, pen in hand, studious learning time. This was eye-opening for me. Instead of taking a “woe is me” approach to “having to spend” half the meeting educating, we are lucky that unlike most founders, we get to frame the baseline information. We start with a blank slate (that, more often than not, also helps to break the ice). This is advantage number two.
When we realized that basic understanding about women’s periods was a necessary prerequisite to a good pitch and, most importantly, to raising capital, we did what any good founders would do. We made a list of every period-related question that has come up at least a dozen times and framed an answer:
And that is how our vaginas 101 slide was born. For those men still scratching their heads on the three questions listed in my intro: A box of 18 is good for one period on average, tampon size corresponds to heaviness of flow, and a pad most certainly does not stick to a vagina (imagine a BandAid on your hairy arm). Needless to say, we're looking forward to the next round.