Confessions Of A Funded Female Founder

Why women don't tend to scale or fundraise at the same rate as men.
12/18/2016 02:42 pm ET Updated Dec 20, 2016
Susan Lyne of BBG Ventures meets with Female Founders at The Scale  Collective, November, 2016.
Photo by Monica Schipper/Getty Images
Susan Lyne of BBG Ventures meets with Female Founders at The Scale Collective, November, 2016.


Step 1: Identify there’s a funding problem.

This is Part 1 of a 2-Part Series

In November, I got to see female founders in action at The Scale Collective, an inaugural event I co-hosted meant to help women scale their early-stage startups.

In the opening talk I called TSC a “live beta” because it was. I and my TSC partner had suspicions that women grow companies differently than men. Not all women, but enough do to merit us wanting to delve into what makes us tick as founders, and why we don’t scale or raise capital at the same rate as men.

Some don’t understand my fascination with this issue. I’m a female founder, but I co-founded and built a company that scaled and exited. We closed four rounds of venture capital.

Still, throughout that process I observed pivotal points on our trajectory where growth slowed or was not the hockey stick we (female founders) expected. I can point to many factors, not the least of which was a full-on market collapse and recession, and perhaps some founder first-timer-itis.

But now, as an advisor of both male and female-led startups, I’ve seen in some instances diametrically differing approaches to building teams, fundraising, and achieving scale. And while I’m not sure my co-founder peers would agree with me, I do believe these discrepancies are largely due to gender.

It took me and my BlogHer co-founders 9.5 years from first coming together to pursue a “passion project” to exiting our startup. It took us 18 months to decide to seek venture capital. A male friend and entrepreneurial peer liked to remind me that he was “three startups in” by the time I’d sold my first company.

“If I was you, he once said to me, seven years in and pre-exit, I’d take stock off the table now and hedge my bets. Any guy would.”

The thought of doing that was painful to me at the time. Cashing out before exiting would have meant that I was giving up on my baby. What would my investors have thought of me?

I also recall fundraising with my partners and us bragging that we had the “jobs of our dreams” and no intention of leaving them. We meant that and wanted to assure our investors that we were in it for the long haul.

It occurs to me now that we may have been freaking them out. If we never wanted to leave our jobs, how hard would it be for us to willingly exit, or bring in new management if necessary?

These are things I think about now and warn female founders about, not to discourage them from building venture-backed companies, but to give them a realistic assessment of what they are signing up for, and the kinds of expectations they will encounter when taking VC investment.

There are other tendencies that I’ve observed and will assert that female founders own. Having been on my share of panels and discussions with other female founders I realize that some of these observations may be controversial. I’d been on a panel where it was agreed upon in advance that we not take a “victim”, or self-critical, stance on our fundraising style — after all, we were the beneficiaries of VC money; we’d figured out the system and prospered. For years I kept my mouth shut when asked for my opinion on why women do not get the same level of funding as men.

Female peers of mine thought that to respond would be to bite the hand that funded them, or to not give themselves credit for having figured out the system.

I didn’t respond in part for those reasons, but mostly because I just didn’t know why there was such a discrepancy. I mean, I read TechCrunch, Re/code (then All Things D) and every other tech pub out there and it seemed as though there were investors who actively sought female-founded startups to fund. Leader investors like Jason Calacanis consistently spoke of inclusion and a desire to support them.

At the first BlogHer Conference in 2005, when we were just pursuing a passion project — before we founders even decided to build a digital platform for the influencer community — investors approached us to ask if we were “seeking a round”. Apparently, we had unwittingly built and demoed a live influencer community. I personally was a beneficiary of press celebrating female founders. Why those intentions failed to lead to more capitalization of women-led companies dumbfounded me.

Part of my ignorance stemmed from not having gone through a seed-funding process. We were already building audience and generating revenue and press when we decided to fundraise. With revenue already in hand we found it was not difficult to get meetings with investors. The time it took from the day we decided to fundraise to accepting a term sheet on a Series A round was about five months.

But, years later, and perhaps a bit wizened by the whole process of starting and selling a digital company, and advising others on how to build theirs, an opinion formed.