Women today are more likely than men to complete college and attend graduate school. They are just as likely to be doctors or lawyers as they are to be teachers or secretaries. Despite this improvement in gender parity, we don’t see the same trend in female-founded start-ups. In 2015, only 14% of companies that raised Series A venture capital funding in New York City were led by female CEOs.

Female Founders Fund (F3) is a venture capital fund with a mission to invest in the “exponential power of exceptional female talent.” F3 has invested in female-founded companies such as Minibar, Maven, WayUp, Manicube, and many more. We sat down with Sutian Dong, Partner at F3, to understand the challenges facing female entrepreneurs.

The Broadcast: Why did you join Female Founders Fund?
Sutian Dong: At my previous VC firm, FirstMark [Capital], I saw a rising tide of women starting businesses. Although we saw more women pitching their businesses than ever before, we weren’t actually funding more female-founded businesses. The Female Founders Fund mission to help women create valuable businesses really resonated with me.

TB: F3 raises capital from individual investors and institutions to invest in female-founded start-ups. What are the challenges you face as a team of women raising from predominantly men?
SD: Often we get asked whether there are enough women who are backable. The answer is yes! Our deal flow roughly doubles every year. We’re seeing what I call “mini mafias” emerge: women are getting their feet wet at one startup and then decide to start their own thing. The increase in deal flow reflects this trend.

In 2015, only 14% of companies that raised Series A venture capital funding in New York City were led by female CEOs.

TB: Have there been specific times where you’ve seen women fail to raise money for a great idea because they couldn’t get men to understand the concept?
SD: Yes, absolutely. As female investors, there are a lot of things we’re better poised to identify. LOLA is a great example. When you explain why buying an ugly box of tampons in a drugstore is a pain point to men, the say “huh, that sounds interesting,” but they’ve never actually experienced the problem. There are many areas of innovation within tech where women have more experience.

TB: Women-led companies received under 10% of funding in 2015. Is the issue that women aren’t founding companies, or are they less successful at fundraising?
SD: It’s a combination of a lot of things. One piece is that women-led companies are still “up and coming,” so there are fewer of them. Unfortunately, there’s also a little bit of unconscious bias in place. Investors use pattern recognition to make a quick decision about a founder. But a female won’t look like the next Mark Zuckerberg.

TB: What advice do you have for women pitching male investors on a product intended for women?

SD: Three things. First, let your personality show. The investor relationship is like a marriage: it’s 7-10 years long, you’re working together, and you can’t get divorced! Second, display a lot of confidence and excitement for the business. Men tend to be more comfortable ballparking numbers, whereas women like to know the data cold before sharing. This can be misinterpreted as not “knowing” the business. Third, if it’s an industry that men aren’t familiar with, be prepared to prove it’s a big industry.

TB: What do you think is driving the trend identified in the First Round 10 year report, which states that female founders outperform their peers?
SD: It’s not a women versus men thing. It’s a diversity thing. The more diversity of thought around the table and the more agency people feel to share their opinions, the better. If you appreciate other points of view and take them into account as you make critical business decisions, your company will perform better.

TB: How can the market encourage more women to found companies? What needs to happen?
SD: I think a lot of it needs to be around education. Even if you don’t think you fit the typical profile of a tech entrepreneur, you too can start a business. We need to demonstrate that there are many types of businesses you can start, and that there are funding resources available early on. Once women see other women starting companies, it becomes a realistic path, rather than an anomaly. In a way, it’s a self-fulfilling prophecy.

Caroline is a Senior Associate Consultant at Bain & Company, where she helps companies solve their most strategic problems. A graduate of Brown University, she was formerly an extern at LOLA, where she worked on email marketing and product development.

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