This is why female founders are getting nowhere with funding


On Tuesday at the Milken Institute Global Conference, five successful female founders – including Jessica Alba of Honest Company and Susan Feldman of One King’s Lane — took the stage to discuss the state of women in entrepreneurship. My hopes for the dialogue were high. The panel took place in front of hundreds of Milken attendees. Mostly veteran male investment bankers, hedge fund managers and leaders across industries, the audience could benefit from having their perspectives on the face of the future of business broadened a bit.

After 20 minutes, when none of the panelists had been asked a real question, I started wishing Milken had a Live at the Apollo-style system for yanking people off stage.

The panel began with each founder explaining her business to the mostly male audience. Alba went into how she started Honest Company because as a new mom she couldn’t find reliable baby products. Feldman explained how One King’s Lane was born out of her inability to shop online for great furniture. The other panelists launched their startups similarly based off their own unmet market demand. You know, the stuff that male entrepreneurs get deified for.

That’s when moderator Rick Smith of Crosscut Ventures had an opportunity to ask his first real question. He could have asked the women how they grew their startups into businesses now valued at hundreds of millions of dollars. Instead he asked the women to explain how exactly they convinced male venture capitalists of the legitimacy of their businesses. Their responses to Smith’s question were a direct reflection of the negative sentiment of the conversation overall.  

“I am not here to be complaining in any way shape or form,” said Alexandra Wilkis Wilson, a co-founder of Gilt and Glamsqaud. “Investors are typically going to invest in companies and industries that they inherently understand… It is harder for men to do that with a female-focused company.”

Nearly 90% of venture capitalists are male. If Wilkis Wilson’s statement is true, and a vast majority of VCs refuse to see the market potential of markets focused on diverse audiences, female founders targeting female customers are doomed. The numbers already speak for themselves: Out of the startups in the Bay Area that received series A funding last year, only 8% were led by women. That number is down by 30% from the previous year.

The other panelists only supported Wilkis Wilson’s point and the stats. Feldman of One King’s Lane shared that a top venture capitalist gave her a lowball term sheet for her series A and regretted it, but only after he spoke with his wife. Wilkis Wilson said when she was fundraising for Gilt, one investor told her that women just don’t spend $500 on shoes until, again, he spoke with his wife.

It was at this point in the conference that I tweeted the following, which One King’s Lane Feldman then “liked” when she got off stage:   Watching @jessicaalba, @AWilkisWilson & @Susankfeldman explain why investing in women-focused startups is smart is sooo painful #MIGlobal

This apparent stigma attached in the industry with running a “women-focused” startup almost stopped Sheila Lirio Marcelo, the founder of, from starting her company entirely.

“For anyone to tell me that care is only a women’s issue, especially investors, was very challenging for me,” she said. “It is still the same challenge for me ten years later.”

The conversation then digressed into a topic that women in leadership across industries hate: “Can women really have it all?” Smith posed a similar question to Debbie Wosskow the CEO of Love Home Swap, who responded by encouraging young moms to start their own firms because of the flexibility that comes with being a CEO. When the other panelists were asked to chime in on the topic, they went silent. The founders were ready to move on to more important issues.

Wilkis Wilson then pointed out the obvious: Male VCs who open their eyes to investments that are targeting markets they don’t understand are at a competitive advantage. After all, fewer investors are probably interested in backing the potentially huge businesses. Marcelo of echoed Wilkis Wilson’s comments. She realized recently that in order for the numbers to change and for more female founded companies to get backed, she needs to start talking to more men about the challenges and the issues. 

Smith’s response? There are indeed men in the audience because Alba – the founder of a company now valued at $1 billion — is also a model. Lots of people in the audience laughed. I did not.

I have no doubt that Smith – who to his credit has invested in women-led startups before – had the best intentions with moderating a meaningful discussion on an important issue. The problem is it’s not enough to put female founders on a stage and expect perceptions or percentages to change. You have to ask them real questions once they get there.

Update: Rick Smith reached out after I published to share that he was asked by conference organizers to focus the discussion on the, “entrepreneurial journey of these women, not their current companies.” He added that he would never ask a female founder in a pitch meeting how she balances work and life and that the last two deals he led at CrossCut had female founders. As for the comment about Alba being a model, he said that was his attempt at “self-deprecating humor,” after incorrectly calling Alba a model/actress in the beginning of the panel. “I believe that the people in that room, including the men, were there because they care about the serious issues facing female founders,” he said.