Mueller contacted Barr to express his displeasure after Barr issued a four-page letter in March.
Editor’s Note: Each week Maynard Webb, former CEO of LiveOps and the former COO of eBay, will offer candid, practical, and sometimes surprising advice to entrepreneurs and founders. To submit a question, write to Webb at dearfound…
Women entrepreneurs dread fundraising. Many are convinced there’s bias involved, and they’re not wrong: Research shows that investors ask women different questions than men, and that in turn influences funding decisions.
Granted, much of this is likely unconscious. Ideas about gender are so deeply embedded that an investor who thinks he or she is treating women and men the same probably isn’t. Still, women who want to maximize their chances of getting funding need to learn how to navigate the undercurrents of pitch meetings. Below are tips on how to answer specific questions, but the overall advice boils down to the following: Control the direction of the conversation, and keep bringing it back to the business and the amazing opportunity it presents.
Full disclosure: A lot of what we’ve written here is going to sound sexist. And it is. Women shouldn’t have to twist themselves into pretzels to get well-deserved backing. Hopefully society’s ideas about gender will evolve, but this is the playing field as it currently exists.
1. “How are you going to defend your market share? How are you going to retain your customers?”
With women, investors tend to focus on all the ways their company could fail, while men get questions about how their company could succeed. For example, investors will ask a man how many more customers he can acquire, and women how they plan to retain the ones they have.
Research led by Dana Kanze at Columbia University looked at TechCrunch Disrupt pitch competitions and calculated that founders who were asked “gains”-related questions went on to raise seven times more money than founders who were asked “loss”-related questions. Investors often don’t even realize they’re doing this. Leadership and entrepreneurship have historically been seen as male domains. The slant of investor questions, then, is often simply a manifestation of deeper anxieties about women’s abilities to pull off a successful startup.
There’s a silver lining. Women who pivot mid-answer from “loss” content to “gains” content increased the amount of funding they received. While this needs to happen subtly, Kanze says, shifting the conversation back to the founder’s bold vision and the company’s huge opportunity redirects investors’ attention to the gains side of the equation, and they walk out of the meeting with more enthusiasm.
There’s an important body language component to this as well. Loss-related questions elicit defensive reactions. “You can see the body language of these women shut down,” Kanze says. That initiates a vicious downward cycle. A founder who comes across as deflated inspires less confidence in investors. “The by-product of the Q&A is that [an investor] can walk away thinking, ‘Wow that woman was really defensive. She seemed really uneasy about the questions’”–even though, Catch-22 style, it was the investors’ own questions that generated that result.
Preparing for the loss-related questions, and learning how to pivot shifts a founder’s body language. They’re calm. They’re confident. They smile. They lean forward. And investors leave with different impressions.
2. “Who would use this?”
Investors–who remain overwhelmingly male–often scratch their heads at products aimed at women. While they can sit through presentations for nano-AI-machine learning-deep proton-plasmatic startups and enthusiastically pull out their checkbooks having understood almost nothing, show them a menstruation-tracking app or an improved breast pump, and suddenly, they “don’t know enough” about it to invest.
Some investors deflect by telling founders they have to run the product by their wives. Michelle Abbs, who directs Babson College’s Miami WIN (“Women Innovating Now”) Lab, says the accelerator trains founders to reply by focusing on the numbers. “‘Yes, ask your wife,” the founders are taught to say, “and [in the meantime] let me tell you about the long-term return on investment for you.”
In some cases, another approach could also help. Tyler Haney of Outdoor Voices (Fast Company Most Creative People 2017) created a new type of activewear for women. Investors initially pushed back, fearing the company wouldn’t be able to compete against Nike and Under Armor. So Haney began sending samples to the women in the investors’ offices–and sometimes to their wives. The excitement of those women demonstrated the company had legs, and Haney has now reportedly raised more than $64 million.
3. “Are you planning on starting a family?”
Investors worry that a woman will lose interest in her startup once she starts a family, or that the demands on her time will overwhelm her ability to run the business. Some will directly ask a woman about her plans. (There are no federal protections against this when it comes to investing.)
While answering the immediate question however they please (some are candid, others dodge), experts advise moving the conversation back to the company. “There’s a way to pivot back to your focus, drive, and excitement for business,” says Kara Miller, who directs the Babson WIN Lab in Boston.
Investors are often simply looking for signals that your interest isn’t going to flag. Both the story you tell, and your body language, need to pattern-match what they expect to see from single-minded founders. For example, you might say in a relaxed, confident, excited-about-the-company way: “My partner and I have talked about children, but we don’t have any immediate plans. I’ve been thinking about solar energy for the last 10 years, however, and SolarPlazMatix has developed a unique technology that will be the leader in our $25 billion market. That’s my sole focus at this point.”
4. “I don’t think you have the right temperament to lead this company”
When Hustle Fund General Partner Elizabeth Yin was raising money for her previous startup, an investor told her, “I don’t want to say the wrong thing and call you a ‘meek Asian woman,’ but I question how you’ll lead a team of a hundred people.” She’s not alone. Women founders often find their leadership chops questioned.
There’s little you can do mid-pitch if someone has already formed that impression of you. That’s why female-focused accelerators focus on body language long before founders step into meetings. Research has shown that investors react better to women with “masculine” behaviors and less well to women who come across as too feminine. If you have a high voice, for example, you might consider bringing it down into a middle register. (No need to go full Elizabeth Holmes, however.) If you’re normally very expressive, you might modulate your gestures. If you’re normally demure, you might practice coming across as more assertive.
Michelle Abbs recommends that founders tape themselves and then assess their own performance: What is your tone of voice? What are you doing with your hands? How’s your eye contact? How commanding are you? Then look at videos of women who exhibit the more masculine behaviors investors are looking for and consider how to move your behavior in that direction. “It has to be honed by them,” Abbs says.
Again, we’re not saying this is fair. Hopefully, our daughters will be able to show up in pitch meetings as their full selves. But for now, this is the game. Here are some videos of women leaders displaying the kinds of qualities investors respond to: former Xerox CEO Ursula Burns, Rent the Runway founder Jennifer Hyman, and former PG&E CEO Geisha Williams.
5. An investor asks an aggressive or attacking question–or is simply behaving like jerk
Some investors get aggressive. They interrupt. They attack. They might even bully. Some of this is simply a legacy of the more jostling communication style these meetings had when this was an all-male game. While founders need to answer the questions, the content of the reply could matter less than the grace and class with which they handle the aggression.
Dennis Joyce, an angel investor in Seattle who mentors entrepreneurs in the Female Founder Alliance’s Ready, Set, Raise accelerator, says entrepreneurs can use a questioner’s brash behavior as opportunity to demonstrate their leadership skills. Angels are a tight bunch, and they often know who has a rougher personality. Sitting in a pitch meeting, they might not approve of an aggressive person’s style, but they will want to see how the founder responds. They know founders will run into jerks at every stage. “The mark of a really good CEO is you’re able to patiently get through this situation,” Joyce says. “Our money will be safe, knowing the next time you get asked a question like this, you’ll handle it well.”
6. “You need a male CEO”
If an investor tells you they want a different leader, the trainers at WIN Labs advise founders to simply “smile and say, ‘Thank you for that thought,’” Michelle Abbs says. And then cross that person off your list.
“Not all investors have to be your investor,” Abbs says. “You’re not going to change that perspective, [and] you don’t want them to invest in you if that’s how they think.”
The meeting went well, and your prospect says they’re ready to move forward. Great news . . . until that potential client disappears into thin air, ghosting you before signing a contract. You’re probably confused, angry, and maybe even resentful, but you might be looking in the wrong direction, says clinical psychologist Dr. Wayne Pernell, author of Leadership Lessons From the Road.
“The problem is, [ghosting] isn’t about you,” he says. “Remember that we humans are quirky. In the absence of information, we’ll fill in the gaps with the worst possible reasons that something happened.”
Early communications with clients and prospects is a lot like dating, says Kyle Kirkpatrick, vice president Antenna Spaces, a real estate marketing and PR practice. “It’s easy to fall into the traps of overanalyzing every piece of correspondence–or lack thereof–and making rash assumptions about what the other side is thinking about you,” he says. “The main lesson I’ve learned is not to take things personally, because it really, truly is not personal.”
If a potential client ghosts you, here are a few steps to take.
Rule out miscommunication
First, make sure you aren’t in the midst of a misunderstanding; perhaps they said “maybe,” and you heard “yes,” says Pernell.
“Could it be that you didn’t have the relationship you thought you had?” he asks. “You might have assumed a connection that wasn’t there.”
Follow up
If you didn’t misjudge the relationship, reach out and ask if he or she is okay, says Pernell. “Show true concern and note that you had been in touch regularly and all of a sudden that stopped,” he says. “See if he or she needs any help with anything, and indicate that you are guessing that they’re going through a hard time and that you’d be happy to help wherever you can.”
Doing this creates a level of leverage, adds Pernell. “Be genuine in your concern,” he says. “If they are blowing you off and you come in with your worry and concern for them, you’ve re-established a relationship based on care.”
Politely remind them of the situation, says Terri Slater, president of the boutique PR and marketing firm Slater PR. “Such as, ‘You emailed me on XYZ date, you gave me your mobile for our call on Friday, you posted on Facebook that you’re seeking services,’” she says. “Gentle reminders that, ‘Hey, you expressed interest in me.’”
Acknowledge any work you’ve put into researching their next moves, says Pernell. “By reminding them that you have a history together, you’re working to rebuild the relationship,” he says.
Then suggest–don’t ask for–a brief catch-up call, says Pernell. “Asking for something from someone who has left you puts in a one-down position,” he says. “If you ask for something–even a phone call–the other person will expect something in return. It’s a quid-pro-quo psychology. The idea is that you are relationship selling.”
How often you follow up will depend on your previous amount of communication, says Kirkpatrick. “I know there has been research to support following up upwards of six times to maximize your chances of making contact with someone, but I think it’s important to resist the urge to make this process too scientific,” he says. “It really depends on the nature of your previous correspondence, as well as the prospect’s own professional circumstances.”
One thing to avoid doing in your follow-up is make assumptions. Do not assume any reasons why they’ve abandoned you, and do not attempt to fix what you don’t know, such as offering to lower your price, says Pernell.
If you don’t hear back
If the ghosting continues, send the prospect a final note saying that you’re not sure what happened and that you’re available for them, says Pernell. “State that you hope to stay connected no matter what decision they make,” he says. “Keep the relationship alive even if the sale went elsewhere, as this could be what’s known as the ‘long tail’ for you.”
You can also stay in touch by leveraging news items, adds Katie Long, vice president of public relations for Idea Grove, a Dallas-based internet marketing firm.”It’s best to follow up when you can offer the client or prospect something that benefits them like a tidbit related to industry news or a new media contact,” she says.
She suggests setting up Google Alerts to track the prospect’s company news, or signing up for newsletters that cover the client’s industry, then send them a note whenever you see there is something interesting happening at their company. “This tactic is more likely to elicit a positive response than when simply sending a ‘following up on my previous email’ note,” she says.
Move on
If the potential client still ghosts you, it’s time to move on. Ghosting is very unprofessional, says Slater, who adds that the behavior could be an indicator that you probably don’t want them for a client. “Treat it like the guy you met in a bar or at a party who took your number and never called, and move on,” she says.
There are a million reasons why a prospect might not be responding, says Kirkpatrick. “Or maybe, they’re not interested,” he says. “It’s not uncommon for professional prospects to want to avoid the uncomfortable scenario of telling someone ‘no,’ especially when they’ve already indicated interest. In that case, that’s a matter of their own neuroses–not yours.”
Preserve your own sanity by remembering that someone else’s responsiveness is only marginally in your control, if at all, says Kirkpatrick. “You can save a lot of brain cells and stress by keeping a simple list of prospects, following up periodically, and recognizing that you, as a service provider, are only a small part of someone else’s very complex professional and personal world,” he says.
But don’t let a ghosted relationship dictate how you engage with other people, says Pernell. “Be kind, be compassionate, and be present,” he says. “Your reputation for that will help you stand out in the long run.”
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