It’s well known that there’s a pervasive gender gap in venture capital. Not only are women underrepresented in venture capital in terms of the number of women-founded companies, but they are also underrepresented when it comes to leadership positions in the industry. While there’s been some progress in recent years—female CEOs secured about 14% of all VC investment in the US in 2019, compared to 7% a decade prior—there’s still a long way to go.
Here are five tips on how women can further close the gender gap in venture capital.
1. Find a mentor who is five years ahead of where you want to be.
Trish Costello is the founder and CEO of Portfolia, a venture capital fund that focuses on markets—like women’s health—where women are either the expert or the target consumer. Trish is a mentor to many women and has shared great advice for entrepreneurs who are looking for a mentor.
- Be very clear about what you want from mentors. Mentors can be invaluable but only if they understand your objectives. As Trish has explained, people want to mentor those who really want to be mentored and have clear objectives for a potential mentorship relationship.
- Stay top-of-mind through timely communication. A great mentorship relationship involves developing trust through consistent communication. Affinity can be a tool to help you keep on top of your communication with mentors and ensure you never drop the ball on important communication.
2. Be a good storyteller.
Eileen Lee, cofounder of Cowboy Ventures, has moved waters in helping elevate women in venture capital. Eileen saw an opportunity to bring a group of like-minded female venture capitalists together and formed All Raise, a collective “to amplify female voices, accelerate their success, and create a tech culture where women are leading, shaping, and funding the future”.
Eileen’s advice to aspiring women founders is to be a good storyteller, and don’t fret if storytelling doesn’t come naturally to you. She said, “If you are not a great storyteller, you can become one. It’s just a matter of feedback and practice.”
- Make sure you include the important elements in your story including your mission, vision, market-size, product, team, economic model, and success.
- Ensure that you include your personal story and why there is no one better than you to start your company.
- Be confident. Have confidence. but don’t be too arrogant.
- Know your numbers and be ready to provide quantitative answers.
3. Highlight your team during the pitch.
Jenny Abramson is the founder and managing director of Rethink Impact, a venture fund focused on gender-diverse teams, technology, and social impact. Jenny coaches women to highlight their team during the venture pitch. She’s explained, “Every leader tells us about their own background, but you should also talk about your team. That shows us you're humble and have respect for the other people involved.”
Prior research has shown that high-performing teams have a strong female presence. According to research published in Harvard Business Review, there’s little correlation between a group’s collective intelligence and the IQs of its individual members. However, if a group includes more women, its collective intelligence rises. That’s even more reason for women to spotlight their team—especially the women on their team—when raising capital.
4. Embrace the process.
Victoria Fram is co-founder and managing director of Village Capital Investments, which makes seed-stage investments in companies addressing social and environmental challenges.
Victoria’s advice is short and to the point: “Do it”. She adds, “It will be harder than you can imagine today, and it is a good thing you can’t imagine it because you should do it anyway”.
Victoria recommends investing extra time in a couple of key areas:
- Rehearse answering questions on topics you feel the most insecure about. One will never be able to eliminate all risks or uncertainties but being ready to discuss them is key.
- Be proficient in all things numbers. Being financially proficient and speaking to them is key. Speak intelligently about key attributes such as dilution and valuation. And demonstrate your ability to take the funds and deliver upon the milestones.
5. Use “no” as a springboard for conversation.
Jenn Hyman is no stranger to the word “no.” As the CEO of Rent the Runway, she had to overcome much skepticism and many “no”s in pitching the idea of renting dresses. Hyman recommends female founders “use ‘no’ as a springboard for conversation”. In an interview with Harvard Business School, she explained:
“I don’t believe in the word ‘no’. To me, ‘no’ does not mean no; it means no for now.” By viewing ‘no’ as an invitation for a conversation, you just might turn the no into a yes. But if you never achieve a ‘yes,’ you still at least learn why they said no, which can be equally as valuable.”
Overcoming the gender gap
We still have a long way to go to bridge the gender gap in venture capital. It’s still an uphill climb. But female entrepreneurs are standing on the shoulders of female groundbreakers. By incorporating their lessons and tips, aspiring female entrepreneurs will continue to close the gap.