When I started an internet company in 1995, I learned some hard lessons about
seeking venture capital. For my first company, I went to each funding meeting
with my male business partner and tried not to notice when the male venture
capitalists constantly deferred to him--even though I had founded the business.
For my second company, I hit the fundraising trail with high hopes but
encountered obstacles as a woman seeking funding. One venture capitalist told me
and my female business partner that his wife wasn't really interested in the
internet, so he didn't think a website for Hispanic businesswomen would succeed.
We finally landed angel funding--from a female angel investor.
The successful businesswomen I spoke with for this column haven't experienced
sexual discrimination on their venture rounds, so I was interested in hearing
about their experiences.
"I don’t believe that being female directly impacted Oodle getting funded,"
says Faith Sedlin, 40, vice president of marketing and co-founder of Oodle,
which she described as "a whole new way to shop for classifieds." Sedlin
co-founded the company with two male business partners. "Naturally, what is most
important is to have a business model, a good reputation and track record,
whether you are a man or a woman. That said, there are 'good 'ol girl' networks
that can be leveraged, both formal and informal."
So far, Oodle has been funded through two rounds of venture capital
investments. The first totaled $5 million and the latest round of $11 million
came in March 2007.
"I was intricately involved with my partners, Scott Kister and Craig Donato,
in pitching the company," Sedlin says. "Specifically, we developed the vision
for the company, the business model and the VC pitch. Also, I fielded many of
the due diligence questions, ranging from user behavior to product and
marketing."
Tina Fitch is the thirtysomething CEO and co-founder of EzRez Software Inc.,
a software-as-a-service company in the travel industry. Her company has more
than $300 million in gross booking revenue and has received $7.1million in
venture funding to date.
"I don’t think there are any negative experiences caused by being female in
fundraising or in business as a whole," Fitch says. "If anything, I feel you can
turn the tables on any preconceived notion to your advantage, by demonstrating
you are as dedicated, bright and inspiring as any other successful executive,
female or male."
Fitch admits she's heard that there are fewer female CEOs getting venture
capital funding but attributes the discrepancy to fewer female entrepreneurs
"putting in the time and effort to start and run enterprise companies for the
long haul."
EzRez received $1 million in seed funding from private investors, including
Silicon Valley executives and entrepreneurs. Another round of $1 million
followed a year later from the same group. In July 2007, the company landed
$15.1 million from Canaan Partners and Azure Capital Partners.
"I was the sole fundraiser in the seed rounds--networking, presenting and
securing the finances," Fitch says. "In the venture round, I spearheaded the
efforts and led the discussions, with great contribution from EzRez’s SVP of
marketing and business development, John Swanciger, to close our venture round."
For women business owners looking toward venture capital, Sedlin suggests:
- Call up female entrepreneurs and request to meet for coffee just to get
tips on raising capital. You’ll be surprised by where those conversations
can go.
- Contact the alumni organizations of the schools you attended to find
female entrepreneurs or venture capitalists to whom you might reach out.
"Get over the question of whether or not being female is going to hinder
you," Fitch advises. "The truth is, there is no reason why being female should
hurt you in the fundraising equation if you don’t allow it to. Demonstrate you
are passionate about your career, building a great company, and that you believe
professional success and personal fulfillment are intertwined."
For more tales about women seeking venture capital, see
"Speaking from Experience."