The role of vulnerability with investors
Updated: Feb 13, 2019
Last week we learned Reset was named one of the winners of the Fearless Moguls Pitch Competition, alongside Ellis Island Tea and Activvely! ~2,900 startups applied, 100 made it to the preliminaries to pitch in a lightning round, and 12 made it to the finals later that evening to pitch in front of real investors.
It was awe-inspiring to be surrounded by such female bad-asses, working on solutions that have long been overlooked in minority communities, through innovative consumer-packaged goods, apps, and services.
After the event though, we were left with the question of what place does vulnerability have in the investor pitch.
To back up briefly -- over the last few months, we’ve been focused on bootstrapping our business while building it up and showing traction before we look for money to boost growth. Although we’re not formally raising money now, my co-founder Silva and I have had countless conversations already on who we would want to raise money with and the importance of mission and values in our future investors. That was one of the major draws of us applying to the Fearless Moguls competition in the first place, the first major competition for Reset. These women – Keshia Knight-Pulliam, Terri Matthews, Monique Rodriguez, Sara Blakely to name a few – took it upon themselves to address the disproportionate funding levels between men and women, and between races within the founder community. In 2017, only 2% of the the $85B in Venture Capital raised that year went to female founders, and the female founders who did raise raised smaller rounds. The numbers are even more dismal for black female founders, who raised 0.0006% of the $425B of cumulative tech venture capital raised since 2009.
These investors are now part of a new venture capital fund that Arian Simone created for women of color to receive funding, with many of them being female founders themselves who have multi-million-dollar revenue businesses. The event was sponsored by companies who are also doing their part to help address the disparity, including Facebook, Bumble Bizz, and Spanx.
On top of the immense pride we have to with this opportunity to be funded and coached by these women, this experience also opened our eyes to the importance of story, the emotional journey, and mission when pitching business to investors. In school and prior companies, I’ve always leaned on methodical tools to make my case or defend a recommendation. Today’s pitch deck templates follow a very logical format, with most decks containing 80% of the same style of slides. However, during this pitch competition we saw women who went on stage and told their story with no pitch deck, taking a much more vulnerable approach in talking to investors than we had ever been exposed to. One of the finalists was breastfeeding her baby next to me before she went up to present, and spoke about her family during her pitch with her husband and child looking on (spoiler alert, she was one of the winners!).
After watching these amazing women pitch with such vulnerability, we started to think more about how we could transform our pitch to pull on the emotional strings on top of the logical ones.
While my first thought was that we can prepare two pitches, one for those that we thought would appreciate these things, while another for those that wanted a more traditional pitch deck, I realized this went against the conversations we’ve had about who we want to be part of our business. We’re not looking for charity or discounting the importance of sound business fundamentals and traction, but we also want investors who care about the story, the emotion, and the mission, and realize that a portfolio of companies with diverse backgrounds and experiences lead to better returns. And while I originally thought this difference in investors fell along gender lines, I realize now that there are men who seek more than just the logic in their investments, and women who might not. This makes the “dating” part of the investor / founder relationship even more crucial. The relationship between an investor and founder is like a marriage, so it is important to not only build that trust through constant communication over time, but also get a feel for values, what their other investments have to say about them, and make sure there is a balance between the investor’s goals of maximizing their returns and the founders’ passion.
We have too much stress in our lives already, it’s time for us to embrace our authenticity and surround ourselves with others that value and encourage this as well.