Female Founders Might Want to Rethink VC Funding

I’m guessing you’ve read a headline or two on the inequity of VC funding. “Women are massively under-represented among both venture-backed entrepreneurs and VC investors, with companies founded solely by women receiving less than 3% of all venture capital investments…”. And you may have also read a few headlines about female apparel entrepreneurs aka “Girl Bosses” like Sophia Amoruso of Nasty Gal and Tyler Haney of Outdoor Voices who took on investment and investors who expected tech-like scaling of companies that make physical products. It did not end well and feels like female founders are always scapegoated.

Not having equal access to start-up capital is frustrating, not fair and not ok, don’t get me wrong, but what if these stories are cautionary tales that inspire women to not play by the rules established by men and build their businesses in a slower, more sustainable and financially sound way and keep all the equity?

Need inspiration? Listen to Missy Park, Founder of Title Nine’s inspiring and unusual story. Here is the episode of “How I Built This” where she tells us about her slow and steady climb to a $100M privately owned company.

Or read about sustainable fashion pioneer Natalie “Alabama” Chanin’s 21 year evolution designing and building both clothing and community.

As a female founder and someone who grew up in a family business that grew organically with zero ambitions to go public and dominate a global market, I experienced the benefit first hand of building a profitable family business to scale. After a certain point my family decided not to grow the business and to maintain their profitable business because life was pretty darn good, we could vacation, employees were happy, etc. They chose to spend their time enjoying life rather than pursuing endless growth.

And as Raz Godelnik recently pointed out on Linkedin, companies like Allbirds who are focussed on sustainability and take on VC investors discover a real conflict of interest.

He highlights, “the point is not that Allbirds shouldn’t grow, but that the nature and pace of this growth should be led by its own focus on sustainability, not by what the markets expect it to do. At the same time, when Allbirds became a public company it basically lost its power to control its own pathway forward, as now it is subjected to the desires and priorities of the markets, not its co-founders, no matter how committed they are to the original vision of the company.”

My hope is that we culturally stop kneeling to the altar of infinite compound business growth and thinking of it as the superior or only way to build and run a business. Small (and this is a relative term) privately owned businesses are the backbone of our economy and distribute wealth as opposed to consolidating it at the top. In addition, when we value and prioritize things other than rapid growth (we aren’t held to legal fiduciary duty like public companies) we have the ability to prioritize profit and build businesses with long-term sustainability.

Starting a new company? Schedule a 60-minute zoom or phone chat with Caroline, Founder of The CAGM where I will share my deep expertise spanning the fashion value chain, sustainable/circular design and business to help you problem solve, strategize, level up and monetize. My advice will prevent costly errors, save time and enable you to make informed decisions. Read what others have to say.