How to Raise VC Funding When the Odds Are Against You
A female founder shares her first-hand experience and tips for raising capital.
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We've read the stats: only 2 percent to 3 percent of investment capital goes to companies founded solely by women; companies co-founded by men and women attract another 10 percent to 15 percent. And although the pool is growing rapidly in Europe, there's simply less money available from European VC funds than American ones.
Where does this leave a female first-time founder from Eastern Europe?
In 2018, I co-founded Zowie, a no-code customer service solution for digital retailers, and immediately landed L'Oréal as our first client. Even with this success and my track record—Forbes 30 Under 30, ex-IBM, founder of a successful software development agency—the odds were against me in the VC funding arena.
I started by raising pre-seed funding closer to home and reinvesting in our growing team. Last year, I set my sights on landing additional capital and started pitching to VC firms across the US and Europe. It was an uphill battle, but it paid off: we announced Zowie's seed round in January 2022, led by Gradient Ventures (Google's AI-focused fund) and 10x from Germany.
Along the way, I've learned a lot about what it takes to raise VC funding when the odds are against you.
Don't listen to imposter syndrome.
With imposter syndrome, there's no other way but through. Many of us—especially women—feel inadequate when facing major challenges, but that voice in your head isn't telling the truth.
The tough reality is that some of these feelings are socialised. There are real reasons why someone might dismiss or underestimate us, like unconscious biases about gender, race, or ability. Language can be another barrier; as a non-native English speaker, I know what it's like to try to communicate my abilities and intelligence in another language. I can't control how my accent is perceived by others, but I can remind myself that I have something valuable to say.
Set expectations for yourself instead of letting others set them for you. When you hold yourself to your own standards, it changes your behaviour, gestures, and stance. It's not about changing who you are, but about showing up as yourself.
See yourself as a founder. Talk to yourself in the mirror if that helps.
Know your numbers.
Investors expect founders to be data-driven and rational. These qualities aren't exclusive to one gender, but unfortunately, the false stereotype is that women are illogical and don't understand data.
This is a barrier but also a potential advantage. Because tech is so male-dominated, investors are used to seeing men on these pitch calls. It's obvious from their questions and behavior that they're surprised to see a woman. They're even more surprised when you throw numbers at them, know your data inside and out, and demonstrate your rational decision making.
Storytelling is valued (more so by American investors than European ones, in my experience) but it must be data-backed. The kind of strong storytelling that is perceived as charismatic when coming from a man can be labelled irrational or soft when coming from a woman.
It shouldn't be the case that women have to act like men to succeed, but our social ideas of success and ambition have been influenced by gender dynamics. The best thing female founders can do is to be aware of these dynamics and be prepared to overemphasise the numbers.
Remember that empathy is a superpower.
Investors are people, too. There isn't a one-size-fits-all approach to pitching, because each meeting is different. The investors in front of you have their own priorities, personalities, and histories. You need to be able to read them and adapt your pitch. Know when to ask questions, when people are getting bored and it's time to move on, and when to end the pitch.
Mentors will tell you how important it is to adapt your approach, but you must learn this on your own. I practised these skills back when I was working on sales outreach for the software development agency that I founded. Some founders don't like to hear (or say) it, but: pitching is the same as sales. During sales meetings, I used to ask myself, "What is important to this person? What are their concerns? What will help them better understand me?" When presenting to investors now. I ask myself the same questions.
The ability to understand and read people is important outside of the funding world, too. The empathy that helps us adapt a pitch is the same skill that helps us identify customers' needs and design products for them. Empathy will serve you well in many aspects of your business.
Become comfortable with the realities of rejection.
Fundraising is constant rejection. And rejection is hard, but this is the life we choose as founders.
The hardest part is to get the first investor, especially the first American one. Once a firm has invested in your business, it validates you for future investment.
Just like anyone else, you need to have everything in place for your pitch: a great product, solid proof-of-concept data, a compelling story. But that won't guarantee success. What matters is what you choose to do with the rejection.
Use rejection as a chance to think about how you can improve. Then, get back out there. Iterate your pitch each time and remember that funding is like job hunting or dating: it's a numbers game.
Proving the stereotypes wrong isn't easy, but the struggles make the successes more satisfying. Mentors can help you navigate the ups and downs of the hyper-competitive world of VC funding. At the end of the day, though, you need to learn for yourself what works for you.