A few years ago, Shark Tank host Kevin O’Leary said the women-led companies in his investment portfolio were out-performing men-led companies.
As both a female entrepreneur, as well as an angel investor who predominantly invests in women-led startups, I can tell you that one of the biggest reasons women decide to start companies is not out of choice, but necessity. Either they have unique exposure to a problem in society where there is no readily available solution, or they didn’t have access to the right career opportunities and turned to entrepreneurship to provide for themselves and their families.
Despite the fact that women still receive disproportionately less funding than men, I firmly believe there has never been a better time in history to become a female entrepreneur. We still have a long way to go, but opportunities are still abundant today.
Here’s why I love investing in female founders, and why 2021 is a terrific time to build a business:
1. Female founders bring a different perspective to business problems.
I believe one of the fundamental reasons women receive less funding than men is because so much of the investment world is run by men–meaning they only invest in businesses that solve problems they understand.
For example, when we were raising money for ThirdLove, we had dozens of meetings with male investors who had a hard time understanding the problem we saw in the market. “Very few women look, or even want to look like a Victoria’s Secret model,” and “Women actually don’t want to have to go to a store to try on a bra” we told them. As a woman, this made perfect sense–but for a lot of men, they struggled to see the world through that new lens. Some did though, and they became our investors.
As a woman, you see the world differently just because of who you are and the experiences you’ve had up until this point. Which means, if you think you see an unmet need in the world, or you have personal experience with a problem and have created a compelling solution, you should trust your intuition and go for it.
2. Female founders approach building companies in different ways.
Especially when you’re building a female-oriented company, nine times out of ten, it’s better for a woman to be leading, evangelizing, and marketing that company.
For example, Bumble (the dating app) just went public. And Whitney Wolfe Herd, who is the founder, became the youngest woman to take a company public. For context, out of 442 other companies, only her and three other women took their companies public in 2020.
Now, could a man have built Bumble? Well, one did. It was called Tinder, where Whitney Wolfe Herd was an early executive before leaving to start Bumble. Why did she leave one of the fastest-growing, most successful dating companies in history to start her own? Because Tinder wasn’t serving women in the way she believed was important.
And now, she’s a billionaire.
3. Female founders have support groups and resources that didn’t exist ten years ago.
We started ThirdLove in 2013.
Back then, there were no female-oriented entrepreneurship communities, or co-working spaces, or networks. In fact, being a female entrepreneur ten years ago was almost unheard of (and even more rare ten years before that). But today, and especially through social media, there is an abundance of resources for women looking to start their own business.
All of this has created a tremendous amount of momentum, passion, and yes, money out there looking to support female founders. To be candid, if you’re a white male founder, you have had certain benefits that female founders don’t have yet in society–which is why many of these programs are exclusively for women. And as a result, the power of female-led communities is immense. Women want to help other women.
So, if you are a female founder, I encourage you to put yourself out there, meet other women entrepreneurs, find a supportive community, and get to work.
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