Thanks to Ellen Pao’s lawsuit against Kleiner Perkins, we’ve all been talking about the male-dominated venture capital culture.
But sexism in tech is not a new subject, particularly the challenges women face when raising money.
There was a well-publicised story last year that shed some light on the overt sexual advances one woman endured while pitching to VCs.
I have my own take on this. Sexism isn’t always about things that involve sex or vulgarity. It’s often just about how men react to a business that focuses on women.
I’ve been raising money for my online fashion startup, which sells high-end designer clothing, shoes, bags and accessories to women and I’ve lost count of the number of times a male VC or angel investor said something like this to me:
- “This sounds like a great business idea, I’ll have my wife take a look at your website.” Or …
- “Unfortunately we don’t have any female members on the phone today, but we’ll pass the opportunity along to them and get back to you.”
It has become clear in my discussions with these men that they are uncomfortable evaluating a business that primarily caters to women.
On the surface this makes sense. It’s easy to picture an investor that has had frustration with getting a taxi late at night in San Francisco being particularly interested in investing in Uber, or who has had trouble getting a dinner reservation investing in OpenTable.
It’s natural to want to invest in what you know. In that context one could see how a male investor who couldn’t differentiate last season’s A-line dress from this season’s peplum dress wouldn’t be seeking out fashion businesses to back.
On the other hand, why is the idea of the $US50 billion women’s luxury fashion industry so foreign to so many men that they think they need a woman’s help to comprehend it?
The point of startups is to create new businesses and business models, so at some point investors will always invest in something that, at first glance, they didn’t innately understand.
They listen to the founders. They crunch the numbers.
Take the example of Algal Scientific, which just received $US7 million of funding on March 31. It developed a unique process to use algae to treat wastewater and is working on a new tech to solve antibiotic resistance strains of bacteria in our food supply. Can you imagine investors telling the company “This sounds like a great business idea. I’ll have my plumber and my veterinarian look at your website”?
After a successful career spanning eBay, Louis Vuitton (where I was hired to launch a startup) and most recently Vogue, I am very proud of what we accomplished in a short period of time. In an environment where buying luxury fashion is no different than buying consumer electronics on Amazon, my business Clique Chic brings the Bergdorf Goodman customer experience online by using technology to create a personalised experience.
With just a bit of friends and family funding and almost no marketing we’ve launched our site, established a relationships with over 25 luxury designer brands and enrolled over 1,000 members. Yet this doesn’t seem to register to many male VCs I’ve talked to.
Smart investors should be capable of understanding a business that caters to over half the population, even if they are not the ones being directly served by the business.
Smart investors should also realise that they’re looking at a lot of under-served startups. Currently only about 20% of funding from angels and as low as 2% of VC funding goes to women-led businesses. This compares to 29% of all businesses in the U.S. that are owned by women.
Given this disparity and my own struggles to get through to investors, here’s hoping that the next investor I meet can talk about the business of clothes without a female interpreter.
Jessica Martino is the founder and CEO of Clique Chic. She can be found on Twitter at @JessicaMartino.