I’d like to start this post by getting some awkward words out the way: menstruation, fertility, infertility, PMT, incontinence, menopause, kegel exercise, ovaries, pelvic floor.
No, this post is not a rant about female empowerment but about female entrepreneurialism. We need to talk more about supporting female entrepreneurialism, particularly in tech. I’m fully conscious though that in the process of doing so, I may well make some of you reading this squirm. #sorrynotsorry
As a millennial woman with a wide tech client base, I read a lot and have become increasingly intrigued by the emergence of femtech - that is, innovations specifically aimed at women which are often health products or services for the female body created by women. Most recently I spotted a headline in Wired – “This company wants your fertility data”. The company in question is Celmatix, which describes itself as “a next-generation women’s health company that uses data and genetic insights to give women better, more personalized information about their reproductive health”.
Since 2009, Celmatix has been collecting pseudonymised data on more than 540,000 individuals who have visited fertility specialists in the US. Algorithms have been trained with that data and in turn predict personalised outcome likelihoods which it offers as a service to selected fertility clinics America. Given that millennial women are set to be the largest generation of mothers in human history, Celmatix’s business could be huge. Cool, right? Indeed, according to market research firm Technavio’s 2016 report, the global fertility services market is expected to exceed $21 billion by 2020. I know the chances are that I’m going to be contributing to that $21 billion.
My first thought, given my profession, was that with the advent of the General Data Protection Regulation in the EU, processing data would be even more challenging for any EU data subjects. My second thought was to what extent they could be held liable if their predictions were drastically wrong and the consequence was someone missing out on the chance to have a baby. Then my third consideration was what the reception from investors and funders must be like for businesses like Celmatix and others that target women, especially given the paltry number of women in VC.
It is this third point I want to explore further. Was there a bunch of men shuffling their feet about as soon as they heard references to lady bits in the pitch meeting? What about the lawyers working with them?
I imagine the conversations that co-founder of Elvie, Tania Bohler, had while raising her series A round in 2016 will have been even more of a challenge. Elvie is a device inserted in the body which syncs up with an app and is essentially a personal trainer for doing kegels. When you squeeze your kegel muscles, a little ball on the app lifts. The stronger you squeeze, the higher it lifts. The exercises are particularly helpful for women who have recently given birth and are struggling with bladder control. It’s not like you can do an authentic real-life demo in front of potential investors…
It is hard to fundraise as a female founder at the best of times, never mind when your product makes some people feel embarrassed, or if they can’t relate. Women founders have to fight harder to be heard. Research was carried out at 2017 TechCrunch Disrupt New York conference and Harvard Business Review published the findings in an article, ”Male and Female Entrepreneurs Get Asked Different Questions by VCs”. Despite being comparable in capital needs and quality, it was found that male-led ventures raised five times more funding than the female-led startups at the conference and the styles in which they were quizzed by VCs were considerably different.
I’ve listened to many a female founder tell anecdotes about their fundraising struggles. Not on the High Street's co-founder Holly Tucker shared that “Grey- haired investors laughed at us when we asked for funding - to them we were just two women who sold crafts”. It must have taken a lot of grit and ambition, to get them to their series E round which raised £21 million in 2016. "Convention, grey and safe – has never changed the world," she says.
Thankfully, investors are waking up (slowly) to the fact that the best ideas and returns aren’t always going to come from someone who looks and thinks like them, or from a product that they can personally use.
So far in Q3 2018, female founders in the US have brought in a higher percentage of venture capital funding than any quarter in recent history, according to PitchBook data reported yesterday. Here’s hoping that this trend continues.
If founders consciously learn how to frame their answers differently to the questions they are asked by VCs, they may be able to raise more funds. However, the gender gap in funding is not going to reduce just because of more oestrogen in the pitch meeting. The answer is not as straightforward as a bit of pitch coaching and hiring more women in VC. All of us display bias in our questioning and that can unconsciously favour male founders over female ones. What will help, however, is being more consciously aware of this phenomenon, and taking active steps to give everyone a fair shot.
Interestingly, as suggested by findings from Sahil Raina, published in this 2016 piece in the Harvard Business Review, the performance of female-led startups is noticeably worse than that of male-led startups, unless they’re financed by VCs with female general partners. So indeed we should be encouraging more women into VC.
My colleagues and I want to meet more female founders (not only in femtech) and to help you if we can. Starting, and building, a successful business takes a good idea, a lot of energy and determination plus the right opportunities and the right people. To that end, I want to encourage you to consider applying to the CMS equIP programme which was born out of the UK and is now also operating in Dubai and Singapore and about to roll out internationally across the 40+ countries in which CMS is present.
Our programme works with start-ups in the technology sector to support their growth. Being an equIP member gets you tech industry-focused legal advice across all areas of law at discounted rates but we will also coach you, be your cheerleaders and offer you opportunities to network with the right people, including VCs.
To the VCs reading, we have over 40 businesses on the programme already so get in touch.
equIP is not exclusive to female-founded businesses but we would love hear from you, and our diverse team will do our best to not to squirm and look at the floor if you pitch a femtech solution!
Starting, and building, a successful business takes a good idea, a lot of energy and determination plus the right opportunities and the right people. The CMS equIP programme works with start-ups in the technology sector to support their growth.