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From $6 Million to $27 Million: The Woman Behind VC Firm Female Founders Fund Talks How to Pitch and Grow Your Business

Founding partner Anu Duggal shared her story on Entrepreneur's 'How Success Happens' podcast.
From $6 Million to $27 Million: The Woman Behind VC Firm Female Founders Fund Talks How to Pitch and Grow Your Business
Image credit: Female Founders Fund
Anu Duggal
Entrepreneur Staff
Associate Editor
8 min read

Women make better entrepreneurs.

That’s according to Female Founders Fund, an early-stage fund focusing on female-led startups. Founding partner Anu Duggal is used to identifying overarching problems in an industry as an outsider looking in, and she’s used that advantage to pioneer a number of businesses.

Duggal launched an e-commerce company based in India -- as well as the country’s first wine bar -- with almost no experience in the industry, and she did the same with Female Founders Fund. Since its launch, the fund has scaled from an almost $6 million fund to $27 million, and its portfolio includes wedding registry site Zola, plus-size women’s clothing company Eloquii and Arianna Huffington’s Thrive Global.

On Entrepreneur’s How Success Happens podcast, Duggal said the fund’s portfolio suggests that women in particular demonstrate more forethought about how to deploy money, build positive company culture and stick to brand values.

Duggal also shared thoughts on breaking into a new industry, best pitch practices and how venture capitalists can better support women.

This interview has been edited for length and clarity.

Anu, you’re an entrepreneur yourself -- you started an e-commerce company based in India, as well as the country’s first wine bar. How did those experiences shape the idea for Female Founders Fund?

As an entrepreneur, my vision and inspiration has really been about identifying opportunities in industries where I'm very much an outsider. In the case of both my wine bar and e-commerce company, I had no industry expertise, but I believed there was an opportunity to build something different and elevate the existing customer experience.

In the case of the e-commerce company, I thought about the millions of Indians who live outside of India and don’t have access to to Indian retail or designer products -- looking at the Gilt model, there was an opportunity there to build something that was really different.

With Female Founders Fund, I had no venture capital experience but started doing a little angel investing. I felt there was a growing trend of great female founders starting companies, then struggling to get those companies off the ground in terms of access to seed capital. I spent a lot of time talking to fund managers and people who were going out on their own launching funds. I also had a great lawyer. As someone who didn't have any exposure to the investment side of things, it was a huge learning curve for me -- every day I was making decisions on things I didn't really know that much about. But I think that's part of what the journey is like as an entrepreneur.

People often say to start with what you know, but often, like you stated, it may be easier to identify an industry problem as an outsider. Based on your experience doing just that, how would you recommend someone that doesn't have much experience in a certain industry dive in and tackle an issue?

The most important thing that you can do is develop a network. As these businesses were developing, I spent a lot of time and energy connecting with industry experts and people who were open to innovation -- who were excited about the opportunities, who wanted to be helpful, who had expertise, who were just willing to be a sounding board. My piece of advice: Surround yourself with people -- whether it's investors, advisers or employees -- who can really give you that perspective you need to build an exciting business.

I know the fund's mission is to demonstrate that it's possible to achieve high returns by investing in women-run businesses. Why do you think that's so important in this day and age in terms of tech and venture capital?

You've obviously seen a lot happen over the last 12 to 18 months in terms of large funds bringing on female partners, but I think at the end of the day, this industry, like most industries, is driven by financial returns. If you, as a venture capital firm, see example after example of female-funded companies going on to be successful, to get acquired, to go public, then you recognize you’re really missing out on something -- and that something is financial returns. So what we’re driven by is working with female founders who have that same vision: building big companies that have the potential to massively disrupt their industry.

Tell us about success strategies that have worked well from pitches you’ve seen. Would you suggest a certain type of wording or holding yourself a certain way?

Start and end with a very clear explanation of the business. A one-liner that someone can walk away and remember is really important. Cover the key areas that investors are interested in, as well as the competitive landscape -- and never say you don’t have any competitors, because that’s never the case. Even if you're a pre-launch company, ask yourself how you’re going to get your first hundred, thousand or 50,000 users -- investors want to see you putting thought into that. Those are some of the things we look for.

You scaled the fund from $5.85 million to $27 million. How did you do it, and what’s your advice for entrepreneurs looking to grow their own businesses?

A lot of it comes down to fundraising. With fund one -- my first time -- it was incredibly difficult to raise money with no experience as a traditional fund manager, and having a partner for the second made it much easier. But at the end of the day, it’s really tough to raise capital, and I think a lot of it is dependent on developing great relationships with people on the institutional side. That way, when you're ready to to raise that next second, third or fourth round, they know who you are; they've been tracking you.

How can other venture capitalists take up the mantle and help support women-run businesses? What do you think needs to change when it comes to the industry as a whole?

The first step is obviously bringing on female partners -- ideally more than one. You also need to invest in women at the associate and analyst level and show them a career path that makes sense, as well as give them mentors who can guide them along their career path. It’s a combination of needing more female, diverse faces at the top but also needing more mentorship for women who are looking to get to the top.

What's your advice for the women who are trying to raise VC funding? Focusing in on their numbers, should they be steeling themselves for more of a fight?

It really varies based on the type of business you have and the stage you’re at. At the end of the day -- pre- and post-launch -- understanding your numbers is incredibly important. Think about the levers that you can pull, whether it's on the digital marketing side or the growth side.

From an economics perspective, you have to understand how it all works because at the end of the day, investors are looking to you to be the person who understands what drives that business. That’s probably my number one piece of advice for founders across the board.

What's the number one thing you learned from your experience as partner over the last four years?

From the outside, a VC job looks relatively cushy -- you're sitting there making investments and dictating where that capital flows. But at the end of the day, we're also entrepreneurs. We’re hustling in a very similar way in terms of always raising money and building our brands. A lot of people don’t think of us like that, but we’re still trying to raise awareness about our funds and make people want to apply and have a good relationship with the public. We think about it as, in a way, starting from the bottom -- building something from scratch -- and we’re constantly thinking about how you improve the status quo. As someone who’s new, you have the opportunity to do that.

Listen to the podcast episode below.

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