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Fundraising While Female : The Dating Ring

I have struggled with writing this blog post for months. Unless I have an absolutely perfect, bulletproofbusiness (which I do not), Im easily written off as someone blaming my failures on my gender.

When I was in YC, I was told a few times not to waste time blogging about gender and tech. Then again, that was just YCs mantra dont do anything that doesnt directly lead to growth. As long as you grow, everything will be fine, or so they told us.

And so we focused on growth. For a year, my cofounders and I worked 100-hour weeks, all major holidays and weekends. We gave up social lives and had one of the most impressive graphs at the crazy 78-company Demo Day YC hosted 60% MoM revenue growth, with 25k in revenue for March.

We had more press and name recognition than any other company there, and my pitch was named as one of the top 8 by TechCrunch.

Out of the 500 investors there, only one invested.

We were told that our product was too early, that the dating space was too tough. Meanwhile, Zoosk was filing for an IPO and 1-year-old Tinder was being given a 9-figure valuation. Unlike the spaces many of my peers occupied, dating is ripe for innovation. There are few companies out there with more than a few million in funding, and if you end up winning in the dating space, you easily have a billion-dollar-plus company.

This was my second company, the first of which I started at 19, which is still operating and profitable. My CTO had brought in millions for Zynga and my COO had somehow managed, on her own, to coordinate hundreds of dates per week.

I knew the founders of many other companies pretty closely their backgrounds, their revenue, their valuations, how much they raised. Sure, its comparing apples and oranges, but one company (with a 6 tall, attractive white, male CEO) that was pre-product and just a few LOIs raised over a million with 3x the valuation. A smaller B2B company that had 10% of our revenue raised the same amount as us, at twice the valuation. Another B2C company, with a quarter of our revenue and much stronger, well-funded competitors, raised 3x what we raised, at twice the valuation.

The main difference? They were all run by all male founders.

Everyone told me fundraising would be bad, but how bad could it be, I thought. Pitching was my thing I have a background in theater and improv; my strongest skills are sales and marketing; I had personally pitched my company to hundreds of people and gotten them to sign up. Fundraising seemingly was a bunch of quick meetings where you got people to like and trust you and write checks. I could do this.

Well, I couldnt. I had 40 fundraising meetings, I sent over 300 emails requesting meetings, and tried to get in touch with another 500 investors. While its hard to ever know exactly why youre being rejected by an investor and while I didnt want to blame any of it on my gender by the end, I knew it had played arole.

The first investor who tried to invest was drunk at Demo Day and got handsy with a cofounder, so he was out. Demo Day is a pretty difficult ground for anyone but especially women to navigate.Its extremely intimidating walking up to older men, getting them to make eye contact, and then convincing them to fund you through a quick convo. Its also extremely easy to confuse these approaches with flirting which is exactly what happened.

Fundraising is all about signaling, and because we didnt accept that first big check we were offered, we had little leverage to go on. Theres also a ton of back-channeling in the very small investor circuit, so its possible the investor talked poorly about us to others.

While this post isnt about the easy to spot sexist actions, I find that its hard to gain credibility without the direct stories. So here are a few more: One investor took me to lunch, said he wasnt interested in investing, and wanted to test the product out by going on a date with me. Another investor introduced me to a group of fellow investors as the beautiful CEO who has two other beautiful cofounders. Another never followed up with me after our meeting, but a month later invited me to an event his VC was holding with a PS this is a personal invite (meaning I was invited as a date, not because I was being considered as a potential investment). Another investor met with my CTO, held off on investing, and then asked one of our matchmakers if he could be set up with our CTO, or someone like her.

And on. And on. Ive heard much worse war stories from other female founders.

Ive been told over and over that this sucks but wont it feel so good to get back at these investors by making a successful company without their money? After all, if I really am worth funding, shouldnt I be able to do it without their help?

Well, maybe, maybe not. Were up against companies with millions of funding, or hundreds of millions of revenue per year. We need a large team to be able to build a great product. We were able to get to 25k in revenue, tons of press, and a sizable user-base with no funding, but its very hard getting past this point with a small team. Imagine if Uber tried to prove their product with $300k in the bank. They couldnt. You need tens of thousands of users to prove what were trying to prove, and it acquiring users in this space is very costly, thanks to bigger players like Match.com. The most feasible acquisition channel, Facebook, kicked off all dating companies other than big players like Match, making it even harder for smaller players to gain a foothold in the market.

Seed investment is made on little more than a discussion and gut feeling. While I think that the large majority ofinvestors arent sexist pigs, heres the easiest way to explain it: When a guy (especially an attractive, white guy) walks into a room, especially with the YC brand behind him, manyinvestors will see him asfundable until proven guilty. Show a few strong points to prove the case numberof downloads, strong founder backgrounds, confidence in the product, and the check is in the bank. But as a woman, youre often faced with tougher questions, and have a lot more work to do to gain investors respect. For companies attacking a giant problem (like dating), who will surely have many, many problems with their business at the seed stage, it can be much harder to win over much-needed seed investment that other founders are able to access through boys club connections and bravado.

Its easy to spot direct sexism, and to react to something like an investor getting handsy. But the subtle sexism that hinders womengoes ignored and is often denied.

Fundraising decisions are often made off of little more than gut instinct, and research showsthat these gut instincts favor men and disfavor women. Subtle sexism is something that needs to be addressed and fixed, so that male and female founders can get the funding they need.

Note: I worked on this blog from July November 2014, but am just posting it for the first time, after the most recent episode of StartUp discussing these issues.

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