“Then I went out to raise money. And everyone was like, ‘Great pitch! So is this a real company?’ I was like, ‘Yes! Didn’t you hear me on the stage?’ And they’re like, ‘Yeah that’s cute… Next!’ I was like, ‘Duh!’”—Ambika Singh, CEO and Co-Founder of Armoire
Amibika Singh, Co-Founder of today’s Armoire, a clothing rental company, was one of ExecuTalks first guests. The quote above comes from her full interview with ExecuTalks host Ash Faraj, which explains her first experience pitching her idea of Armoire to an auditorium full of investors. She said she never had to present or pitch her idea on such a big stage before, but felt it went really well. She “came out feeling like a hero.” But when she started those important conversations with the investors who had just watched her pitch, she wasn’t taken seriously.
As a woman writing to other women about a woman’s business story—this doesn’t make sense, right? Doesn’t her idea seem pretty awesome? I would do anything to bring down the cost of clothes, while still looking fabulous all of the time—I aspire to fashion myself like Emily in Paris, but I can’t currently do that on a budget. However, in the eyes of her male investors, her service was not valuable enough. She wasn’t getting the attention of her male investors, and therefore she wasn’t getting funding. Why?
Apparently, many women entrepreneurs have this problem. Not only do women build start-ups less often, but when they do, they receive less funding from investors as well. For all registered companies in 2018, women-led companies only accounted for 24%. According to researchers from Columbia Business School and London Business School, businesses led by women are 63% less likely to receive funding than their male counterparts.
According to Babson College report, only less than 3% of all companies with venture-capital funding were led by women.
While I continued listening to Ambika’s interview with Ash, I realized Ash had just asked a couple of really profound questions: “Obviously like 98% of investors are male, right? Is there a point in time when you’re pitching to the male investors and what tactic did you use when they said no or you kind of hit a wall with that?” His second question was, “Dennis, wasn’t there a story we were talking about where she had gone to the investors’ wives to pitch them instead of going to the investors?”.
Yes, Ambika Singh went directly to the wives, daughters, and girlfriends of the male investors she was pitching to. She started pitching directly to these women, so they could hear Ambika’s story and idea directly from her, woman to woman. These women became Ambika’s friends, and her advocates for selling Ambika’s Armoire to their husbands, boyfriends, and fathers—because they understood the value of Ambika’s solution to a widely experienced female problem.
Although it’s not a perfect, easy or fair system, Ambika found a really witty way of getting around these gender bias obstacles. When I heard about her tactics for the first time, I was blown away. It made me realize that half of the consumer base, which comprises of women, is served by men who don’t always understand women’s problems. This is only one reason why it’s so essential to encourage and support women business leaders in this space and provide opportunity, because not only would we be giving women an equal chance to excel and change the world; we would also give women consumers a chance to be heard, respected, and served by individuals who better understand them.
Pitching Strategies for Women
If you’re a women entrepreneur where pitching is relevant or will be relevant soon, here are a handful of strategies that will help in securing that much needed funding.
1. Ask for More Than You Need
One reason men tend to receive more funding than women, is because they inflate their numbers and overestimate their projections, according to Gloria Kolb, CEO and co-founder of Elidah. On the other hand, women tend to give more realistic projections. However, investors assume men and women are pitching with the same tactics. If you’re a woman receiving lower funding than expected, then try increasing your projections.
2. Know Your Numbers
Investors largely decide on the actual performance of a business, and less often on the “potential” of an idea. Make sure you have a solid business plan accompanied by a report of your historical revenue and growth and projected revenue and growth for the next 3-5 years. Know the details of your Balance Sheet, P&L statement, statement of cash flows and more—and know key numbers like revenue, COGS, operating costs, margins, income, and net cash flow.
3. Build a Support Team
How Men can Help
One way male investors can help is bringing their wives, daughters, girlfriends, etc. to the table. If an investor knows he will be meeting with a women entrepreneur, it may not hurt to invite his wife to tag along to the pitching meeting, so she can hear the business idea first hand. The second way men can help foster a greater support community for women is connecting women entrepreneurs that pitch to them to any notable women investors or business women they know in their network.