A recent study in the Harvard Business Review revealed that only 9 percent of entrepreneurs in VC-financed tech startups are women. The study also found that female-led tech startups are more likely to have success with female-led VC groups and female angel investors. In Seattle and the Eastside, there is a growing movement to diversify the ecosystem — to encourage more women to found tech startups, join the ranks of VC groups, and become angel investors.
“Many studies have shown that diversified organizations generate a much higher return with less risk,” said Serena Glover, an angel investor and board adviser to startup mobile technology and web service companies in Woodinville. “It makes more economic sense to invest in more diverse tech. We’re starting to build that awareness. We need more women at the table. There are many women out there — and many women with economic means — and they’re on the sidelines.”
So what is a female founder to do to get the attention of male-dominated VC groups and angel investors?
Glover, who mentors angel investors and women CEOs, suggests women go for it, get the mentoring they need to be successful, and surround themselves with those who understand fundraising.
“I often see really passionate women who understand their business, but they don’t really understand the fundraising game,” Glover said. “Women networks aren’t as well developed in the tech community. [Women] come to their first round of fundraising not knowing how it works. They don’t know what seed investors are looking for. They don’t know how to do their pitch or how to get to the next round. They don’t know how to really approach investors and what order to approach those investors.
“Who you approach and when you approach and how you approach — that makes a difference,” Glover said. “It’s a really small ecosystem here. You only get one shot. If you’re not well prepared, you can kind of blow your chance.”
Swatee Surve, CEO and founder of Litesprite in Bellevue, a pioneering tech startup designing one-of-a-kind video games prescribed by doctors to manage chronic health conditions like depression, anxiety, and PTSD, said she faces a more significant challenge of innovating in a new industry that is not understood by most investors.
“Would it be different if I was male? I don’t know. Male or female, you have to have a command of your industry,” Surve said. “That’s what pushes us forward. It’s a particular effective tool for a woman to eliminate that bias — to position oneself as a thought leader. Positioning yourself as an innovator is particularly important for women. You have to do that in a very credible way. It’s good to do that anyway (whether you’re male or female).”
Reetu Gupta, co-founder and CEO of Cirkled In, an e-profile and e-portfolio platform for K-12 students to showcase their work, based in Redmond, said women founders vying for capital are considered guilty until proven innocent.
“It’s annoying and it’s irritating, but in some ways it makes us stronger,” she said.
Gupta said what she does to work around that is doing research on the investment group she’s about to approach.
“We have had about three committed investors,” Gupta said. “We’re nowhere close to where we need to be. I can’t say that I’m there yet, but I know one thing is I don’t quit. I will be able to raise money at some point.”