As the epidemic hit last year, the world of fundraising turned upside down. As priorities shifted, investors had to commit to taking care of their portfolio firms, most of which were led by white men. Any of our funding opportunities in the pipeline had evaporated. This is especially true for investors considering the effort to approach new and presented founders.
However, the fundraising market returned quite quickly in 2020 – for some. And while we were thrilled to close the $1.5 million pre-seed rounds in the midst of the epidemic, the challenges we faced in the past continued. The spotlight has returned to minority founders since the Black Lives Matter movement began last summer, and we will start raising funds again in late 2020.
We can say how investors approached our pitch deck or asked us questions that they already had a preconceived notion about us and our business. We were in the second year of handsome running and had the same traction as other male-centered startups if not better funded, yet we were still scrambling to raise funds.
The hard part is that we had no concrete evidence as to why or how much it was difficult for the minority and women’s groups to raise funds beyond our obvious challenge and personal experience. Men may have a vision or idea behind cocktail napkins, while women need to fully establish a business and earnings stream.
Docsand, a tool that we and thousands of other startups use to send pitch decks to investors, is how analysts interact with pitch decks. A recent Docsand survey confirms our wrinkles, as investors really scrutinize business decks founded by women and minorities separately. For example, their data showed that investors spent 20% more time in the business model section of the deck of all-female teams at the pre-seed stage than all male teams. While spending more time on a specific part of a deck may seem more interesting, it may actually be a sign of more investigation and skepticism.
When you look at the makeup of the average VCT you’re pitching, it’s probably a middle-aged white man. When doing handsome pitching – something that redefines the beauty industry education and community – you can imagine that most VCs don’t understand the value and opportunity at hand.