12 Insights From A Decade Of Investing In Female Entrepreneurs
The data has shown what many of us have known and experienced for years- the journey for female entrepreneurs to get to the same point of success as their male counterparts is longer.
By Heather Henyon,
Originally published on Entrepreneur.com
As we celebrate another International Women’s Day, here’s my reflection on the last 10 years that I have spent investing in female founders in the MENA region, and globally.
Although I have been -arguably- investing in women for a much longer time through my work in microfinance and Grameen-Jameel, my first investment in a women-led technology company was in 2014. Since then, I have invested in almost 50 women-led early stage technology companies, and backed over 60 female founders.
I also started the Women’s Angel Investor Network (WAIN), the first and largest women’s angel investor group in the MENA region, which has invested in 10 women-led companies in the MENA region, and exited two. I have also been part of Rising Tide Europe, Next Wave Impact Fund, Dubai Angel Investors and Cairo Angels. I have been putting my money where my mouth is, as they say.
The biggest investment I have made in terms of time, energy and money, is starting Mindshift Capital, a global venture fund investing exclusively in early stage women-led technology companies. As the single general partner of a small venture capital (VC) fund, I am proud of the depth that we have been able to cover. Since our first closing in 2020, we have invested in 18 companies led by 24 female founders in five countries (UAE, Jordan, Turkey, Singapore, and US). We have individual and family office investors from 25 countries. While 70% of our investors are female, 70% of our capital is from men- we need everyone to be part of the mindshift.
Here are my learnings from the last decade of backing women entrepreneurs around the world. I tried to narrow it down to 10, but couldn’t- so, here are 12 thoughts!
1. It takes grit. The data has shown what many of us have known and experienced for years- the journey for female entrepreneurs to get to the same point of success as their male counterparts is longer. Fundraising takes longer. Sales takes longer. Exits take longer. The women who have been successful have worked hard to get there, and probably made many sacrifices- see points 9 and 11.
2. Fundraising takes the same time as a pregnancy. Yes, it will take nine months. Plan for it around seasonality, whether it’s summer holidays, Ramadan, or year-end chaos. Cash is king.
3. Capital structure matters. Beware of accelerators and ecosystem builders that offer in-kind services, but take more than 5% of equity. Unfortunately, it is difficult to correct for the red flag that is a flawed capital structure. Ideally, founders own the majority of the company through Series A funding rounds. Because female founders often raise a bridge round between seed and A rounds (due to being underfunded from the start), the dilution factor needs to be built in.
4. Dream a little. It’s great to reach and even exceed projections, but sometimes, it’s more exciting to think about the potential of growth, especially in the medium to long term. Build budgets and plans accordingly. The numbers tell a story, and investors like to feel excited about the future of possibility.
5. Find a co-founder and/or key people. You can’t go it alone. While we invest in solo founders when many VCs don’t, key person risk is real. We like to see a mitigating factor such as management team members who are rewarded through decent stock options. In this case, plan for a healthy employee stock ownership plan (ESOP). If you don’t have technology or financial skills, find those who do, and invite them in as team members or advisors.
6. Build your board. Start convening monthly board meetings early. Find your trusted advisors, and lean on them. I have played this role for many startups, and I love this post from Amanda Levinson, co-founder of NeedsList– basically, “find your Heathers.”
7. It’s a marathon, not a sprint. Build your resilience, and plan for the long-term. Don’t worry about doing everything now– some things take time, and your to-do list will still be there tomorrow. Preserve your energy for the long-term. Companies are built over time, and often take 10 years.
8. Find your tribe. This is super important– you’ll need a village to support you when the going gets tough. Peer learning and support networks are even more important for female entrepreneurs, who face a different set of challenges. It also makes the journey more fun when you can celebrate your wins together. Support other women through partnerships, mentorship, and investment.
9. Practice self-care. As women, we are traditionally time-starved, and neglect ourselves as a result. Don’t. Take care of yourself– sleep, meditate, walk, exercise, eat. You’ll need your energy. The burnout at six years is real– I’ve seen it many times, and I have also experienced it.
10. Time is finite. While we can get money back, we can’t get time back. Don’t waste it on naysayers or people who are toxic. In the startup world, time is the enemy. Don’t be a perfectionist. Make fast decisions. Don’t overthink. Learn to say “no.”
11. Family first. This is cliché, but true. We often neglect the people we love the most, because of our busy work lives. Our work will always be there, but people won’t. Don’t put off important life events like having children, because of your company. Don’t neglect spending time with your aging parents. As women, we are often expected to make immeasurable personal sacrifices to be successful in business. You can have it all, but not all at once.
12. Have fun. Another cliché- but the journey doesn’t need to be filled with angst, anxiety, and stress. It can be fun! Treat yourself gently, relax, and try to enjoy the ride.
