by Lionesses of Africa Operations Department
It is one thing to complain and be grumpy about the rounding error that is the amount of funding that goes into women’s businesses in Africa, but as we stated last week (here) we believe the answer may lie instead in highlighting the benefits to the investors, and their own investor base in having a more diverse team and with that a stronger portfolio made up of more female-founded companies.
Likewise from our angle, let us not complain about the iniquities of the pressure that potential investors put upon Lionesses vs that to male founders, but instead recognise although the rules may be different, we simply have to stay ahead of the game.
Think there is no difference? The Harvard Business Review investigation (here) entitled ‘Male and Female Entrepreneurs get asked different questions by VCs - and it affects how much funding they get’, highlights this:
“…investors adopted what’s called a promotion orientation [i.e. looking at potential gains] when quizzing male entrepreneurs, which means they focused on hopes, achievements, advancement, and ideals. Conversely, when questioning female entrepreneurs they embraced a prevention orientation [i.e. looking at potential losses], which is concerned with safety, responsibility, security, and vigilance. We found that 67% of the questions posed to male entrepreneurs were promotion-oriented, while 66% of those posed to female entrepreneurs were prevention-oriented.”
Confused? Here are some real life examples, and remember there will be follow up questions to the answers pushing these further:
When asking about - “Customers:
Promotion - “How do you want to acquire customers?” (Acquisition)
Prevention - “How many daily and monthly active users do you have?” (Retention)”
…about - “Income Statement:
Promotion - “How do you plan to monetise this?” (Sales)
Prevention - “How long will it take you to break even?” (Margins)”
…about - “Market:
Promotion - “[Is] your target market is a growing one?” (Size)
Prevention - “Is it a defensible business…?” (Share)”
…about - “Management:
Promotion - “Can you tell us a bit about yourself?” (Entrepreneur)
Prevention - “How much…are you…doing in-house?” (Team)”
And our favourite:
…about - “Strategy:
Promotion - “What’s the brand vision?” (Vision)
Prevention - “Are you planning to Turing test this?” (Execution)” - yes, we had to look that up too!
Given the choice all would want to answer the Promotion rather than Prevention questions, yet the percentages are clear, women get the tough questions plus obviously the follow ups. Think you can wing it? The first set of ‘ummms’ and ‘arrrs’ and the investors will think you, as Founder and CEO, don’t know your business, and if you don’t know it - what chance does anybody else have?!
That is why being in the game is not as important
as staying ahead of it.
So how do we get ourselves to a point at which we can ‘stay ahead of the game’? There are two absolute areas that are key.
1. KNOW YOUR NUMBERS.
It doesn’t even matter if your CFO is there, the CEO is expected to know. So Know Them!
In our discussions with a number of female VC investors, they point out that there is a belief in the investing world (possibly outside too) that women are not good with numbers (tell that to the first NASA crews that flew to the moon as immortalised in the film Hidden Figures only because of the incredible ‘computers’ as they were called then, Katherine Johnson, Mary W. Jackson and Dorothy Vaughan).
Apparently (and indeed we have seen it), any nervousness women show over their numbers or too long to think when asked, will be pounced upon and will give many investors the excuse to walk away. Although we recognise that it is only through being direct with questions that investors really know who is top of the pile for the finite amount of investment cash available, the pressure is far more on women to know their numbers inside out, than on male founders. Even if you have ever-changing numbers (possibly due to exponential growth), state that and then give the most up-to-date numbers you have. Do not over think it.
2. YOUR TEAM!
It’s great that you have a solution to an earth-shattering problem, but without a Team to deliver this, it is going to be a very short discussion with any investor. You have to talk firmly and openly about the strengths of your Team. This is not a time to be modest.
One of the world’s top investors and a General Partner at the massive tech fund ‘a16z’ (assets under management a cool US$35 billion), Andrew Chen says of the Team (here), you have to become the ‘Dinner Party Jerk’!
As he writes: “Startups often struggle at pitching their team, even though for the earliest stage companies, it’s incredibly important to do it well to raise capital…
Pre-seed - [an investor will] Bet on the team
Seed - [an investor will] Bet on the product…
To figure out if you are properly pitching yourself in your team, run the thought experiment of describing yourselves at a dinner party. If you are pitching yourself hard, then if you are a kind human, you will turn red and blush with wild embarrassment.
…a proper pitch includes many of your credentials, your achievements, the ways in which you and your team are highly unique, and we simply don’t talk like this at dinner parties. And yet this is exactly what you should do when you talk to investors…
Don’t hold back
“Be the dinner party jerk, pitch yourself hard. Don’t hold back. Your shyness and cordiality is not helping.”
Yes, the solution to the problem you are solving is absolutely essential, but without being able to answer questions about your numbers and bragging about the Team that is going to deliver this, there is no way you are going to get ahead of the game. The game currently that is stuck at funding 98% male or diverse (i.e. a man included or more usually in the majority) teams vs 2% single or all female founders (here).
So learn the rules, understand that bias exists hidden under the banner ‘Meritocracy’, and instead use the information to stay ahead of the game and find your inner Katherine Johnson as portrayed in the film by the absolutely brilliant Taraji P. Henson to go out there and brag about your amazing team and why you, should be funded.
…And numbers? They have never held any fear for us. Way before the incredible African American Female Mathematicians became so central to NASA’s success, women have been using numbers to stay ahead of the game. The brilliant Sandi Toksvig wrote (here) how when she was studying anthropology at university “…one of her female professors held up a photograph of an antler bone with twenty-eight markings on it [age around 11,000 years old!]. ‘This,’ she said, ‘is alleged to be man’s first attempt at a calendar.’ We all looked at the bone in admiration. ‘Tell me,’ she continued, ‘what man needs to know when 28 days have passed?”…Indeed.
Know your numbers to stay ahead of the game…
Stay Safe.