Over the years, both women and men have brought new products and services to the entrepreneurial table. However, it is important to address that women have faced an uphill battle in their path to venture creation. In 2019, only 2.8% of venture capital funding went to female-founded firms, which, according to Pitchbook, was an “all-time high.” With the onset of the pandemic in 2020, the number shrunk down to only 2.2%. We hope the resilience and determination of female founders reverses this trend and leads to new record highs.
There are a few areas that tend to hold women back when fundraising. Female entrepreneurs may not know as many VCs as their male colleagues do, their networks among investors and industry super-connectors are generally smaller, they are often more reserved and less “salesy” than men when pitching, or they tend to avoid conflict and often do “take no for an answer” when negotiating terms.
Even with these setbacks, women entrepreneurs are not slowing down. They are collectively and creatively fighting back. In this post, we would like to offer an optimistic outlook some creative solutions and perspectives for current and future female founders embarking on the fundraising journey.
We asked several successful biotech entrepreneurs for their take on the best approaches to financing startups. Here are some practical tips:
Q: Where did your first dollar come from, and how did you approach seed financing?
A: “Our first dollar came from Y Combinator and a few Angels whom I have known for a decade or more. Seed financing tends to go towards helping you find true product market fit. The best seed investors are folks who believe in you and your founding team and the potential of what you are building, and who are totally comfortable with the initial idea or product evolving as you journey along.” – Dorothea Koh: Founder and Chief Executive Officer of BotMD
A: “The first dollar was my own. I think that if you really believe in it you will have no problem putting your own money in. Along with myself, seed financing included family and friends.” – Helena Cowley: Founder and Chief Executive Officer of Oxidien
A: “Prokarium was founded and seeded by a serial entrepreneur and sophisticated investor primarily focused on the life science industry. His ability to identify novel technologies and their future potential applications, along with his long-term perspective and commitment to each investment, has led to a successful track record in the biotech space. The initial injection of capital in Prokarium was through a convertible seed round that allowed the company to acquire the founding IP from a US organization and hire its first team.” – Kristen Albright: Chief Operating Officer of Prokarium
Q: Any advice for other women founders in biotech embarking on the fundraising journey?
A: “Be prepared to have tons of doors shut in your face. A good friend once told me that for every investor who sees potential, there will be hundreds who do not. Find the ones that do, know your story, sell your vision, and most importantly keep dreaming.” – Dorothea Koh: Founder and CEO of BotMD
A: “Find mentors and speak with them often, they are invaluable. Network, take massive action, and course correct fast. Don’t underestimate the level of preparation and work needed before you start, and while in the process. Be humble, check the ego at the door, but remember that you are looking for a partner – and you deserve a good one. Focus, and by god, don’t give up – embrace the suck – you will be a better person for it. When you are able to, and get an opportunity, pay it forward.” – Helena Cowley: Founder and CEO of Oxidien
A: “The most important thing in your initial interactions with investors is to demonstrate conviction and confidence that you and your team are the best bet to make an idea a reality. There is a significant amount of capital circulating throughout the world, and investors are always on the lookout for the next brilliant idea and team to invest in. However, one investor group that is often overlooked in the US are referred to as non-traditional investors. Leveraging these types of individuals and institutions early on in your start-up gives you flexibility when constructing (or even pivoting!) the investment thesis and grants you additional time to generate compelling data needed to support it – as this type of capital is structured more closely to an open-ended or evergreen fund.” – Kristen Albright: Chief Operating Officer of Prokarium
We added a few more strategies women founders can implement to skyrocket their fundraising:
- Surround yourself with the right advisors: Have a team of industry and science advisors with the right experience and the right network to get you funded and noticed by pharma buyers.
- Network, network, network: Influential people want to help and give back! Find ways to meet the “super-connectors” in your industry and grow those relationships. A warm intro from a super-connector can open a lot of doors.
- Be nice to your in-laws: Friends and family are the most likely source of your initial capital. Make sure you tell them often how important your work is. Seriously!
- Show traction and interest: Show potential investors that you have sufficient proof of concept data and demonstrate that critical key opinion leaders in your field are impressed by the data.
- Branding by association: Find a potential partner with a strong brand name so you can affiliate your company and your program with someone with excellent reputation; your pitching will become that much easier.
- Seek funding from female investors: Female investors are picking up on the trend that women are more comfortable selling to other women. Check out these women-led funds here.
- Do creative deals: Pursue all opportunities that show up and be open to doing non-traditional deals. You’ll gain experience and become a better leader and dealmaker!
- Don’t give up: You’ve got this!