Next week will see fifty ‘high-growth potential’ technology companies pitch for funding at the annual Engage Invest Exploit (EIE) event hosted by Informatics Ventures – ten of them founded by women.
EIE organisers point out that according to the industry tracker, PitchBook, for every £1 of venture capital investment in the UK, all-female founder teams received less than 1p, with all-male founder teams securing 89p and mixed gender teams receiving the remaining 10p. Since 2007, deals in all-female teams have risen only two percentage points.
In a Q&A provided by the event’s organisers, Leah Hutcheon, founder and chief executive of Edinburgh-based Appointedd, and former EIE participant, shares her experience as a female founder and offers advice to the ten female-led companies pitching on 24 April in Edinburgh.
The data shows that the odds are stacked against female founders. So are the ten women pitching at EIE simply wasting their time?
No absolutely not. I’ve been through the EIE programme three times and found each one extremely valuable.
My first appearance was in 2014 and I was one of the first pitches of the day. Throughout the day, people were approaching me to ask more about the business, including Gareth Williams (Skyscanner). We had a really great conversation around the product and what I was trying to achieve and we kept in touch afterwards. I let him know how things were progressing and he subsequently invested during one of the early rounds and has since been instrumental in our growth.
So I would say to the female founders attending EIE – it’s not about securing funding on the day but starting conversations and building relationships.
At the start of your journey, did you consider that being female might bring additional challenges when it came to securing investment?
I was aware that raising large amounts of money was a challenge for anyone – and not just because I’m female. In fact, starting out, the thought didn’t even cross my mind that it might make it more challenging, however the stats do paint a very bleak picture.
I thought the biggest hurdle would be that I wasn’t based in London as I was starting out at the time of the Scottish Independence referendum. We are fortunate in Scotland that there are a lot of angel investors whose approach is a bit different from VCs, who tend to play the numbers.
There’s a common perception that women are actually more risk-averse and cautious but I disagree with this – I do think women are good at doing more with less.
So you didn’t experience gender bias?
On two occasions I did. I was advised at one pitch that I should bring along any males in the team to future pitches, which was frustrating. And on another occasion, I was advised that I should add haircare product lines to my offering. My company provides a tech solution for appointment booking systems, which at that early stage, I was pitching to the hair and beauty sector – it was crazy that they would suggest I should also sell shampoo! That made me really angry. It’s so disappointing that someone in an advisory capacity would suggest that.
Why do you think the pace of change has been so slow when it comes to investing in female founders?
I’ve spoken to women who think it’s actually getting worse. In the 80s and 90s, women in business knew they were fighting the fight however today, the assumption or expectation is that the playing field is equal – and it quite clearly isn’t.
I know that much has been said about the lack of women in the investment sector and that more is needed here. It is an answer but not the only one. I don’t necessarily think investors are deliberately setting out to not fund women, but instead unconscious bias skews their view of what success looks like.
We’re fortunate in Scotland that there is a really great network of organisations and groups, such as Women’s Enterprise Scotland, who are pushing the investment equity gap agenda and there are successful role models too such as Lesley Eccles, Marie Macklin and Lynne Cadenhead to name a few.
What advice can you offer to the ten females pitching at this year’s EIE?
Connect with other women in the ecosystem, but don’t live in a microcosm. There are lots of great role models out there, both male and female.
Know your own worth and do your research on what rounds should look like. Sometimes women have a tendency to be hard on themselves and set a high benchmark whereas the reality of the landscape is that it is often different.
Don’t try to be more masculine – just be your authentic self. Celebrate the power in being different and create standout.
Put your best foot forward at EIE and start conversations with as many people as you can.
The EIE 2019 cohort will take to the stage in Edinburgh’s McEwan Hall on 24 April and say the organisers “once again highlight Scotland’s capabilities in driving the data-driven revolution, regardless of gender”.