Over the weekend, Rent the Runway held an event for its Project Entrepreneur initiative, which brought together over 100 female entrepreneurs looking to get education and advice on how to take their businesses to the next step.
Unfortunately, one of the panelists, Skinny Girl vodka's Bethenny Frankel, told an African American founder in the audience that if she wanted to raise funding, that she should go out and hire a white guy to be the face of her business. I wasn't present at the event, but I heard about it and found this tweet that separately referenced the comment:
Now, I've seen the stats and the studies. I know that white males get a majority of the venture capital funding. I know that in blind studies, people with male names get taken more seriously in business case students than the same characters with female names.
But I also believe that the best person to speak for a business, regardless of their gender or ethnicity, is the founder--the person who is most passionate and most knowledgeable about the business.
Yet, I can think of at least four occasions in my career where I took a meeting and a female founder clearly brought a token white guy to the meeting, seemingly in order to increase her chances of getting funding. Two of the female founders were white and two were of color. The men were all slightly older finance types that were exactly the kind of guy you would think someone would choose to connect them to financing.
In every single one of those meetings, the guy detracted from the meeting. These guys dominated the conversations, often cutting the founders off, leaving me confused whose vision I was backing. They all tried to form a connection with me as if we were in some secret white guy financing club--with two of the guys repeating phrases like, "We know how it is" or "We know what you're looking for," meaning him and me.
Actually, dude, because you've been talking this whole time, you don't know anything about me.
I'm not your finance bro.
Their presence only served to successfully do one thing--undercut the founder's presence. It made the founders seem less formidable, less confident. The person I wanted to speak with was the person who was passionate about the idea, not some hired part-time gun.
And that's one of the biggest issues we have in the funding landscape. As someone who has backed teams with at least one female founder about 40% of the time, or a founder of some kind of diverse background at least 50% of the time, I believe that these founders can get funding--but they're not encouraged and advised properly.
Yes, straight white males are getting most of the funding, but they're also most of the pitches. It's not clear to me that other types of founders are getting less funding in proportion to who actually winds up pitching and what they ask for--and you can't get what you don't ask for.
I'd like to think that when you get to the meeting and you are confident that you've got something special, all bets are off.
Unfortunately, it's hard to go into these meetings with the same confidence when you go to a women's entrepreneurship conference and you've got people like Bethenny Frankel telling female founders to hire a white guy. That's how you wind up with more white guys in the funnel, asking for more money, with more confidence, and getting it.
So, even when you do get your foot in the door and get into the meeting as a female or diverse founder, there's no undoing the environment that affects your mindset as you pitch. If you're not a white male, you've undoubtedly been told to try to raise less, and maybe not to be that bullish about your projections, so your likelihood of swinging for the fences in that meeting is going to be less. Swing lower and there go your funding chances--because these are investors looking for only the biggest opportunities.
Back in late 2010, when I was at a previous fund, I saw Chantel Waterbury of chloe + isabel run the table on a $3.25mm seed round--on a Powerpoint. Not a single investor turned her down. What struck everyone in the round was the confidence that she exuded. It was an amazing thing to see a roomful of guys take a pitch from a jewelry company founder and say, after she left, "I don't know about the jewelry business, but Chantel is going to make us a shit ton of money." She didn't have or need a token white guy. She was doing just fine as a mom who knew her shit and believed her story through and through.
We need to be doing more to make every single founder, white, black, male, female, straight, gay, everyone, feel like they can move a room like that by being exactly who they are. We need to be more conscious of our biases when we advise and encourage.
And, no, Ms. Frankel, we should tell diverse founders to leave the white guy behind, but make sure they feel as confident as one.