Michal Michaeli sums up a few takeaways from an interview with Joanne Wilson; on the state of woman in startups and the value of remaining scrappy, even after funding
This post was written by Michal Michaeli, Founder & Managing Partner at EVA Ventures, an early stage venture fund for companies owned, or led by woman
I watched an interview with NY Angel investor Joanne Wilson. For those who don’t know – Joanne is an amazing angel investor, who invested in over 30 startup companies to date. Two points about her investmenst; uncharacteristically, 70% of the companies in her portfolio have women founders, and her portfolio boasts an unbelievable success rate.
Joanne had some interesting and thought provoking things to say about the reasons we don’t see enough women entrepreneurs, and the reasons women entrepreneurs find the fundraising process much harder than their male counterparts.
What I found most interesting though, were a couple of remarks speaking to many of the common mistakes made by early-stage startups, which cause them to fail.
One mistake is that after the receiving an initial investment, startups understandably get excited about all their new found money, and can get a little wild with the spending. Mainly they spend money on too many people. “You got where you got cause you were scraping?” she says – “Still be scraping!”
Then they (startups) need to figure out how to make money, soon. “If you can figure how to make money sooner, rather than later – you have a longer runway, you have time to grow the company, your evaluation goes up – and that’s good for everyone.”
We were looking at four startups recently, all operating in a certain field, with an intention to invest in one of them. We were shown briefs, executive-summaries, business plans, demos, mock-ups and roadmaps. We were told about technologies, markets, conversions – You all know what I mean. Amazingly enough, all asked for exactly the same amount of investment – US$ 350K.
Then, two entrepreneurs came by. They showed us a website. “It’s not perfect” they said (it was far from it). “It was built using our own resources and has only so many visitors, out of which some 20% registered, and we’re making ‘X’ amount of income from it so far.” They had a plan to add specific features and an explanation as to how each would add to their revenue. Then they asked for an investment – about a fourth of what the others asked for, and told us they’re betting on future revenues as a major resource to build up their startup in the near future.
You can all guess which investment we’re actually considering.
Not surprisingly, one of those two entrepreneurs is a woman.
Joanne Wilson says investors don’t invest in women entrepreneurs out of some subconscious bias, and I agree. People, investors included, use pattern recognition to make pattern decisions. Sadly, women are still not included in investment patterns. A few years from now, when more woman-made success stories accumulate – those patterns will change.