How to deal with sexist behaviour from investors

Brilliant female-founded start-ups are severely hindered by sexism in the male-dominated investment sector. We've seen it first-hand over and over again.

Even our founder and CEO, Julia Elliott Brown, the leading fundraising expert working with female-led start-ups to get the funding they deserve, experienced sexism on her entrepreneurial journey launching, growing and funding successful businesses.

Entrepreneurs and the start-up community must openly discuss this sensitive subject and potential solutions.

Is there still a lack of investment in female founders?

Yes. Absolutely.

According to the European Investment Bank, "female-founded companies deliver twice as much revenue per dollar invested, despite receiving less than half of the investment capital of their male peers," and startlingly, "female entrepreneurs pulled in only a tiny fraction - 1% - of venture capital investment in 2021."

These figures highlight the difficulty female entrepreneurs face while also highlighting how tragic it is that so many women are missing out on achieving their goals due to their gender.

Statistics from Simply Business, show that only 29 percent of UK small businesses are run by women and this falls to just four per cent in the trades, according to Simply Business research.

Julia's personal experience

Julia's own experience with investors is comparable to that of many other female founders. At first, she was having great success gaining funding for the "fashion-tech" design-your-own shoe firm, Upper Street, a business she founded with her sister. The casual misogyny they encountered, however, made her realise that most male venture investors didn't take her female-owned enterprises seriously. One said “isn’t it just a nice little lifestyle company you can run to fit around your kids and family life?”.

She soon discovered that it was not only male venture capitalists with this kind of attitude. A male bank lender visited her house to evaluate their account a year after the business bank approved our loan. After seeing her new kitchen, he made a remark along the lines of "is this what you spent the money on then". Would he have joked with a male this same way? Very likely not. Then he went a step further inquiring about the occupation of her spouse. Not a question he would have posed to a male founder.

She met an investor at an event a few years ago, and after learning about the work we do with female founders at Enter The Arena, he said “What are you, some kind of feminazi?”.

This is the opposition we face. It is absurd.

Many of you have also experienced it

In the seven years we've spent helping female entrepreneurs with their investment raises and interviewing them for the podcast Fundraising Stories with Female Founders, we've realised that sexism is tragically something that almost every female founder encounters.

Tersha Willis, a client of ours and the founder of Terrible*, a clothing line for the creative industries, once told me, “getting asked out on a date when you’re on a pitch, it’s pretty much, that’s the worst thing that can happen because it makes you feel like this is it’‘.

Alex Pluthero from Freedom Underwear said “I was asked a number of times, not outright, but they basically wanted to know if this was a lifestyle business and if I was just about to go and have kids”.

Concerns about pregnancy and ‘lifestyle’ businesses are recurring topics for female founders. Even though males would never be exposed to such subjects, barriers for women clearly still exist. It’s wrong to ask founders questions like this.

When investors behave in this inappropriate way, it sends the message that female founders lack the credibility to be taken seriously as opposed to their male counterparts. As a result, fewer women start, invest, and grow their firms, which causes the market to become even more saturated with male-dominated companies.

The problem extends beyond the unwelcome advances. Minimising our successes, or "venturesplaining," as I refer to it in my book, happens frequently. You're probed and prodded; to these usually older male investors, you're an experiment, and when their tests are complete, you’ve likely failed. Men simply aren't held to the same standards.

So, what can be done?

There’s a lot of discussion about the need for more women to lead VC firms and for female angel investors to promote diversity. But it shouldn’t be down to only women. By having both male and female investors, we can hugely improve the prospects of women.

Male investors, male entrepreneurs, and the whole investment ecosystem must examine and address sexism. And it’s not just about making these moves on International Women’s Day. The investment community must implement year-round tactics to deal with sexist behaviour in fundraising and start-ups.

To push past gender stereotypes and casual sexism when raising investment, join the Fundraising Academy.