How Issues of Gender Equity Become Issues of Wealth Equity When It Comes to Startup Funding

I would argue that all investments come down to the personal comfort level that the investor has with the founders.

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By Fran Dunaway

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Gender parity can only happen when there is wealth parity. Only then can we really level the playing field. The reason? People tend to invest in people who look like them. This is proven over and over again. EY research shows that 3 percent of institutional funding goes to female founders. Without role models and a system that reinforces our abilities, women aren't as prone to strive for growth in the same way as men. EY also reports that less than 2 percent of women-owned companies ever make more than $1 millions in revenue. The reality today is decision-makers of VC firms are 96 percent male.

Related: How to Get Funded as a Female Minority-Led Tech Startup

As Nathalie Molino Nino points out in her new book Leapfrog, "Despite what every business book might say, historical data shows the real secret ingredients to getting ahead in business are being rich, white and male." When segments of our society have essentially been perpetually excluded, to expect the ones who have excluded us to suddenly try to be inclusive -- it's just not going to happen. At least not as quickly as it needs to.

When TomboyX overcame the odds and entered the 2 percent milestone marker, I was able to reflect on the path we've taken to get here. I realized that while there was cause for celebration, we still needed to check those boxes, keep focused and not lose sight of our next goal because we had a new challenge at hand; to not just have a seat at the table but to be leaders in the ecommerce space (despite the fact that we have to do it with less investment at a later stage than other companies before us -- MeUndies and Third Love have received, relatively early on, $10 million and $13 million in funding, respectively). To do so, my wife and I had to unapologetically embrace our desire to build a wildly successful company with an exit that leaves us wealthy, and our primarily female-centric investors wealthier.

Related: How to Get Male Venture Capitalists to Invest in Your Female-Targeted Product

Our journey has been incredibly difficult and frustrating, as we have navigated the waters of raising money in an environment with statistics as unfavorable for women as they are. Fortunately, we were unaware of the stats and naively believed that a great idea was all you needed to attract investors. So, we persisted.

I won't waste effort talking about who didn't invest in us, as I think the story of who did is much more interesting. Because, at the end of the day, investors don't really make decisions based on what the numbers tell them. I would argue that all investments come down to the personal comfort level that the investor has with the founders. And there were plenty of funders, male and female-led, who were uncomfortable with first-time female founders, both over 40, neither of whom had any experience in apparel or Ivy league degrees, and who were not only lesbians, but ... a couple! In some ways, it's a little crazy when put that way, but to start a business, let's face it ... you need to be a little crazy.

The real heroes in this story are the people that looked beyond all of our "weaknesses" and believed in us and our vision. Here are the stats: 84 percent female, 30 percent LGBTQ, 17 percent non-white ethnicity and 31 percent first-time investors. A hero in our Series A was a guy who really doesn't "get it" in terms of our brand, but not only appreciates our hockey stick growth, he actually appreciates our "maturity" and the business opportunity. He played a huge role in convincing a large bank in Asia to invest in us as well.

Related: My Female-Led Company Raised $6.25 Million in 2.5 Years. Here's How We Did It.

So, until we have more women with the wealth to invest in people who look like them, we have to work with what we have. The old adage, be scrappy, holds true. And by all means, be measured in your reactions to the ups and downs. Take everything as it comes, and when the no's come streaming in, don't take it personally, hold onto your vision and persist.

I once was able to see the powerhouse Shirley Chisholm speak. Her greatness was something to behold. She spoke from her heart and from a place of truth that resonated deeply within me. I remember her saying that when people tried to stop her or stand in her way, she simply went around them, staying on her path. "Out of my way, I've got work to do."

Fran Dunaway

CEO of TomboyX

Fran Dunaway is a media executive-turned-fashion entrepreneur and co-founder of TomboyX, a gender neutral underwear brand. Originally aiming to create the perfect button-up shirt, TomboyX now focuses on underwear based on the overwhelming demand for their first boxer brief for women.

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