Fortune favours the brave, and it’s never more apparent than in the investment pitch. But with women more likely to underestimate their company’s projected figures than men, it can be difficult for female entrepreneurs to develop and communicate the kind of confident optimism required to grow a business.
Check Warner is the founding partner of new venture capital fund Ada Ventures – an early-stage investment fund designed to support overlooked founders and markets. Of the 1,000 companies to be reviewed, analysed and recorded on structure by Ada Ventures over the past year, 43% have been female-founded.
For Check, good ideas lie at the heart of every investment strategy. Whatever stage your business is at, female entrepreneurs must be bold and ambitious in their thinking in order to raise the required capital.
“We are open to the possibility of ideas, from anywhere,” she says. “We seek out founders who are open to the boundless possibilities of their ideas. We believe in working in a truly open and fair way.”
Having founded a fund aimed at discovering and building the possibility of such bold ideas, Check believes that standing out from the crowd involves challenging tired, over-used business models and pushing the envelope when it comes to your offering.
Back it up
While a good idea is an essential first step in building your business plan and inspiring potential investors, it takes more than blue-sky thinking to get a fledgling company off the ground.
“Even though investors invest in people, it’s really hard to get investment if you’re just selling a big idea,” says Victoria Peppiatt, Co-founder and COO of Phrasee, a company that specialises in AI-powered marketing. “You need to prove that your idea is actually solving a problem – and that you can get people to pay for it.”
Check Warner, meanwhile, says a ‘hyperscale ability vision’ is essential as VCs are looking for 3-5 times return on their investments. As a founder, you need to be able to tell a credible story around how you plan to make a large gain on revenue over the next five years.
Basically, competing for funding can be fierce. Considering that only 3% of capital is currently estimated to go to female founders, getting initial traction and demonstrating legitimate interest from current and potential customers can help your cause during the pitching process.
Serve the under-served
While it may be the case that men still form the majority of investment panels – and that they’re less likely to invest in businesses that serve a market they’re not personally familiar with – things are starting to change.
Check’s VC fund is turning that traditional approach on its head by actively seeking out products and services that are targeted towards under-served or unserved markets – and for founders who bring fresh ways of thinking to the table.
“We are looking for new areas that haven’t been tapped into before,” she says. “We are looking for founders that are really mission-led and able to evidence that they have overcome obstacles in their past, so if you have faced barriers and challenges, use that as an advantage.
“We’re also looking for people who can attract amazing talent. At the early stages it’s really difficult to validate that, but you can do that through advisors, you can do that through angel investors, the people you’ve been able to co-opt through your journey, because that’s such a crucial part of being able to scale in the future once you have money.”
Being a female entrepreneur in a space still dominated by men can bring a myriad of challenges, but there are also lots of gender-based strengths women can tap into in order to maximise the opportunities available to them.
Check believes that female founders often display greater clarity when it comes to predicting future trends and foreseeing market gaps, and using that to sell your vision for the future can bring success beyond your expectations.
“I think what female founders have a really good advantage in is describing how the world is going to look in the next five or ten years, and describing that in a really credible way,” she says. “What we’re most interested in is the tailwinds that drive these markets. That is the thing that will make the most growth. I think sometimes founders either skip over that or assume that you already know.
“They’ve really got to describe that this is the way the world will be in five years. As VCs, we don’t want to tell entrepreneurs that; we want it to come from them.”
Unleash your inner animal
Whether you’re just starting out in business or are ready to scale up, being hungry for growth is vital if you’re looking to secure capital.
“VCs want to make money – that is our whole business and that’s what our investors are paying us for,” says Check. ‘We need to be absolute animals chasing returns, and a founder must be able to convince us that they are after the same thing and we are aligned in our desire to make really meaningful money.
“It goes against the societel views of women, and I even struggle with it with my business, but we need founders to be greedy and to show that they really want it.”
Top tips for securing capital
- Be hungry for growth. Showing ambition in your growth goals will give your business the best chance of achieving its potential.
- Feed your ideas bank. Investors are more likely to be impressed by ideas that have the potential to evolve and create knock-on opportunities, so don’t be afraid to think big.
- Get some traction. Competing for funding can be tough, so make sure you can demonstrate that your idea has legs before you go looking for capital.
- Consider how you could tweak or evolve your offering in order to connect with under-served markets and you could capture the imagination of far-sighted investors.
- Trust your intution. Women are often good at predicting changes in the market or identifying gaps. Use this to your advantage.
If you’re looking for the tools, connections and support to pursue your growth goals and to find out more about how HSBC is supporting female entrepreneurs, please visit this page