Look Past The Face

I can’t count the amount of times founders who are not white men have said to me, “I know that if I was a white man that I would have already raised this money and be in a very different place”. What kills me is that I know that it is true too.

Can we ask investors to look past the face and look at the results? One founder, who’s company is growing at a rapid clip with multiple stores had a hard time raising capital. She keeps her cards close to her chest making her hard to read and it made many investors wary of her ability to grow the business. Yet the numbers proved that her leadership and vision worked.

Another founder who has done zero marketing with a pipeline of new major multi-billion dollar customers wanting to get on her software platform has had an insanely difficult time raising capital. It isn’t hard getting term sheets to buy the company at a low valuation but is hard to get VC’s to put capital in. The numbers are there but perhaps her matter of fact authentic attitude makes investors wary.

Another founder who is in an industry that few understand is also finding it hard to raise capital although he is charming, gregarious and black in a very white world, his numbers are impressive.

There are people out there raising “seed” rounds for valuations of companies that have shown nothing and are able to raise capital. Others have been around for awhile that are just beginning to get real traction at the same price so I wonder why an institutional investor would rather put capital into something unproven at the same price of a proven model.

Is it the face, is it the attitude, what is it?

Comments (Archived):

  1. Pointsandfigures

    Hard to know unless you were there for the pitch. Could be they were pitching funds that were just kicking tires, and weren’t really a fit to begin with. Could be the fund was at the end of their investment period, wanted to keep the deal flow spigot open while they raised new capital. It’s an inexact science but I doubt it is racism in this day and age.

    1. meredithcollinz

      When only 2.8% of venture funding goes to women-led start ups, and even less to racially diverse founders, the data tells a different story.

  2. LE

    “I know that if I was a white man that I would have already raised this money and be in a very different place”Regardless of whether that is true or not (and I don’t doubt it) that is a really bad attitude to have in life, business or otherwise. There is nothing at all that says that anyone is entitled to get funded in some speculative business idea. It’s well known that investors use all sorts of qualifiers other than ‘merit of the idea’ to make what amounts to bets on entrepreneurs. Gambles. One of the worst bets ever might have been Tim Draper investing in his daughter’s friend Elizabeth Holmes of Theranos. His daughters friend who he thought was worth a shot.It’s really the same as people whining about not getting into elite colleges. Get over it. It’s a lottery. Yes some people have a leg up for some reason. So what? Figure out another and make your own path to success. Everybody wants in because in addition to those who really work hard they think it’s the magic that will shave years of actual work in terms of getting them to the promised land. So it’s a shortcut.And this idea of everyone starting a business is a recent phenomenon. And really stupid in my mind as well. I was most likely (edit: one of the only) the only people who did this back when I graduated from college. I remember my girlfriend’s mother at the time sneering about what I was doing. (Thought I should have been a professional doctor, lawyer etc.). I could see what amounted to disgust in her face (I am good at reading faces but anyone could see that). Back then there was practically no money no gamble money for anything. Solid idea (it was it worked out and I sold it) or not. My Dad’s friend wouldn’t even hire me in the same business that I ended up doing on my own and selling (still operates today). Why? ‘You have no experience smart good college but you don’t know the business sorry’. (Welcome to the world of things back in the day you would not get hired w/o actual skill in an area let alone have someone invest in you as for sure happens today.).

  3. awaldstein

    There is absolutely no question that gender, race, nationalist are still a gating factor in our world, inclusive of VCs.Anyone who thinks this is not so is not paying attention. Better yes, equal, no.