Navigating Investment Bias as a Female Founder CEO

Female founders asking for what they need and getting what they ask for featured heavily in my coaching work and conversations this month.

As Tessa Clarke rightly said to Sifted recently:

‘It’s money not mentoring that women need to scale their companies.‘

Investment bias means doors to funding remain firmly locked for female founders. Photo by Thom Milkovic on Unsplash.

One of the most important things female founders are asking for is money and instead they are getting advice. This isn’t unique to women but it is much more common for women.

Astia VC has been researching why women aren’t getting the funding they ask for and what can be done about it. READ ON for 3 tips as a female founder raising investment.

Astia VC: Addressing investment bias head-on

If you’ve downloaded my VCs with a Difference Guide, you’ll recognise Astia VC as being one of my featured VCs who do things differently (if you’re yet to download it, get the free guide here).

They just published a report: Astia Edge: Our failure to invest in black founders and what we have done about it. Astia’s report reveals some golden insights for female founders looking for an investment partner.

Astia started as a non-profit with the mission of “equity for women leaders in access to capital and networks”. They’re now a VC intent on removing bias from their investment process, providing much-needed industry leadership for systemic change.

They launched Astia Edge, a fund that invests only in companies led by women of colour, in response to their realisation that despite their extensive efforts to remove bias from their processes, there were still systemic issues that stopped money from flowing to these founders.

They published the report after their first funding cycle.

Their findings reinforce and add to my advice in how to choose investment partners and reaffirm my decision to recommend them so highly to my clients and colleagues.

They are truly leading the charge against bias in investment decision-making; going far beyond the relatively easy first step of bringing in female investment partners.

What did they find? Why does it matter to you?

1. They had to work incredibly hard with their peers to get co-investors on board and close the round:

“Our outreach for these companies often required direct and quite personal conversations with investors about bias living in the very questions being asked…

“We saw the bias of advising or mentoring these companies, rather than investing in [them]. Our role was to push back on these systems and… stress the importance of investment as the real work of investors and the fundamental force for change.”

For female founders, Astia’s report emphasises the importance of looking for an investment partner who has good relationships with other investors, cementing my view that an investor’s primary roles are 1 - providing funding and 2 - access to follow-on funding. For more on this, read: how to choose investment partners.

2. The importance of getting to know the person who will be your investment manager.

This relates to point 1 above and whether they have the time to advocate for you and your business with co-investors. How thinly are they spread? Do they believe in you? Will they get out their black book, pick up the phone and advocate for you? 

3. Your ‘lead’ investor doesn’t have to lead with cash.

They can lead with advocacy, as per my point above, by getting on the phone and using their influence to get other investors on board. If you find an investor who’s willing to throw their full weight behind you, consider asking them to be your lead.

Sadly many investors are playing the odds and spread too thin, as Chris from VC, Playfair Capital, wrote recently.

Rest assured, that some VCs are different.

If you’ve exhausted my ‘7 VCs with a Difference’ list, I profile a new VC each month in my newsletter and Sifted publishes its own list of 250+ EU female VC partners, which it periodically updates as information becomes available.

Have you experienced investment bias?

If so, I’d love to hear about your experiences. What more should investors be doing to address the problems faced by female founders? Contact me at: jennifer@withaata.com

FEMALE FOUNDER NEWS: This post was inspired by Aata’s monthly email.
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