The secret of pitching to male VCs: Helping female crypto founders blast off

Bridget Greenwood is the founder of The Bigger Pie, a U.K.-based networking organization that supports women in blockchain globally. She says that even venture capitalists with the best intentions still end up funding male founders at disproportionate rates.

“I stumbled over the appalling statistic that of all VC funding [in the U.K.], only 3% goes to female founders, 8% goes to mixed teams, and the rest goes to all-male teams,” she explains to Magazine.

“And that initial figure has gone down to 1.5% over the pandemic.”

“In more difficult times, it seems that VCs are falling back on what they know – which is to fund male founders. This is doubly frustrating, as research looking at the impact of COVID-19 points to the benefit of feminine leadership during challenging times.”

According to data from Pitchbook, the trend is international. Last year in the United States, startups with all-women teams received just 1.9`%, or around $4.5 billion, of the $238.3 billion in allocated venture capital. The 2022 figure was down from the 2.4% achieved the year before. 

Seeking to actively change this reversal, Greenwood founded The 200Bn Club with Amber Ghaddar. The initiative takes its name from a 2022 report on female entrepreneurs commissioned by the U.K. government and completed by Alison Rose, CEO of NatWest. A key finding was that investing in female entrepreneurship would add between 200 billion and 250 billion pounds to the country’s GDP.

Greenwood and Ghaddar embarked on a three-month research journey, during which they spoke with academics, investors and VCs. Ghaddar had already successfully raised money for her company, AllianceBlock, so she personally knew some of the struggles.

As Greenwood summarizes, “We got two key points from our research. The first is that you need a warm introduction. A lot of the VC world is all about networking, and so we have gathered some 200 VCs to be part of our network so we can create these warm introductions.”

“The second point is harder to overcome and happens during the pitching process. As soon as it becomes apparent the founder is a woman, then the unconscious bias kicks in.”

Pitching stage

Research published in Harvard Business Review singles out the pitching stage as a significant barrier for women. In essence, it says that men are asked promoted questions, whereas women are asked preventative questions – which focus on risks and put founders in a defensive position.

“Why is this important? Well, regardless of whether you are a man or a woman, if you get asked preventative questions, you are five times less likely to raise money, period,” says Greenwood.

“However, the good news is that if you understand and recognize a preventative question, you can then learn to answer in a promotive way so that you give yourself a much better chance at success. But this needs to be taught.”

At The 200Bn Club, female founders are coached on how to best pitch to VCs, which also includes the somewhat controversial concept of not pitching “like a woman.”

While earlier research suggested that investors exhibit bias against women due to their sex, more recent studies have found that the picture is more complicated than that, and that being a female entrepreneur does not diminish interest by investors in and of itself.

A team of Canadian and American researchers conducted an experiment that found investors are actually biased against displays of feminine-stereotyped behaviors by entrepreneurs, whether from men or women. The research, titled “Don’t Pitch Like a Girl,” found that behaviors coded as feminine were associated with negative perceptions about the entrepreneur’s business competency.

Now, that doesn’t sound any better from a gender studies perspective, but from a practical standpoint, it means female founders can work around the issue by using more masculine-stereotyped behaviors while pitching.

“It turns out that while female founders are happy to talk about their team, they are much more self-effacing when it comes to speaking about themselves. And since the VC wants to invest in the leader, this is a damning habit for female founders,” Greenwood says. 

“We work with our female founders to deliver the pitch with confidence, assurance and faith in themselves. And we help them answer the preventative questions in a promotive fashion.”

ConsenSys on equality

Thessy Mehrain, co-founder and CEO of Liquality, has a background that makes her uniquely positioned to understand the system and how to disrupt it. She spent six years creating products at JPMorgan in the U.S. and joined the Occupy movement after the financial crisis, and it was from there that she discovered Ethereum.

“So, I totally fell in love with Web3, but I also didn’t want to be part of something that creates technology that repeats what we have in the legacy world,” she tells Magazine.

While still working at JPMorgan in 2015, she heard Joseph Lubin, the founder of ConsenSys, speak at a fintech conference and was blown away by his vision. Shortly after, she jumped ship to ConsenSys and began working on a project to explore swapping between Bitcoin and Ethereum in a decentralized manner without a middleman. That project evolved in time into her startup, Liquality.

In 2016, Mehrain also created the New York-based Women in Blockchain group to help address gender inequality in the sector. The group now boasts 3,000 members.

Working at ConsenSys provided her with great support, access to technology and a co-founder — Harsh Vakharia, who also previously founded the startup Etherbit. Coming out of ConsenSys, Mehrain recognizes she had many advantages over other unaffiliated projects.

The pair successfully raised $7 million in 2021. When asked if she experienced different treatment as a female founder, Mehrain replies: 

“How would I know? I was never raised as a man. However, coming out of ConsenSys definitely gave us an edge and warm introductions. It was at that point, during our raise, that I became aware of the dominance of men in this space. At Liquality, we are focusing on the Global South, so we knew from the get-go that we needed to have diverse representation in our funders. That changed our thinking and our outreach.”

“We knew that diversity makes products more sustainable – it’s not just the right thing to do, it’s the right thing to do in business terms. We needed to explain that to our investors. But it’s more than having diversity at the cap table, it’s what you build afterwards.”

Mehrain and her co-founder have assembled a team that reflects the culture in which they want to grow. “We work hard at this. It’s not an afterthought. For example, we have a female engineering lead and a lot of strong female engineers — but that took work. 

“We are creating a legacy as we go. It’s very important so the next generation of women founders and leaders have role models and supports to help them.”

“There is this notion that female leaders are more risk-averse and are more emotional when it comes to decision-making, but I think that is largely debunked. Of course, there is unconscious bias, but we are making inroads on those notions too,” she tells Magazine, noting that individual differences are much more salient.

“I believe it is more down to individuals – how we mix. I am much more methodical than my co-founder, which is a ‘me’ thing rather than necessarily a female thing.”

Like Mehrain with Liquality, it was important to her that the VCs at the cap table reflected the project’s ambitions. Solvo is a retail-facing financial app that aims to bring the best features of crypto without the complexities and jargon.

“So, we needed retail-facing VCs to come onboard,” says Denovitzer.

Finding the right fellow co-founders is another element more important than gender. Helena Gagern and Grace Wang, co-founders of Web3 messaging app Salsa, both agree.

“We had shared values — which was of top importance to us both – and similar energy levels,” Gagern tells Magazine.

They bonded over a pilot project during two weeks in Austria, where they learned about passion, energy and pragmatism. They knew they would work together on a bigger project, which turned out to be Salsa, for which they raised $2 million.

“We were fundraising in a bear market and initially were looking for $500,000.” 

However, the co-founders quickly realized that this amount was too little and jumped it up to $2 million – which quite possibly ensured their success. 

Another element of their success was that they had met their investors in real life at conferences over the past two years. Those warm introductions went a long way to smooth the path to success.

“I didn’t feel being female was a disadvantage, but I did strongly feel the underrepresentation. This pushed us to approach female VCs as a priority,” says Gagern.

Benefits of being a female founder

Wang tells Magazine that there are a host of benefits to being a female founder. “Once you get over the imposter syndrome issue, being a woman can make you stand out in a male-dominated space. All-female teams are rare, and so we pushed this to our advantage. And we also reach out to other female founders – helping each other.”

But why the focus on female entrepreneurship? Aside from offering gender equality, there is data that points to female founders achieving better results. According to a study from the Boston Consulting Group, businesses founded by women produce twice the revenue from every dollar in funding than men. Given that they also receive less than half the funding, that’s a better bang for your VC buck.

Statistics compiled by Springboard, which helps accelerate the growth of women-led companies, suggest that even a little bit of gender diversity helps and that startups with at least one female founder outperformed all-male founding teams by 63%. 

Finally, Mehrain is pragmatic in this gender-balancing game and says men often want to help but just don’t know how.

“You know, white males are the best allies. Right? Tell them what to do, tell them what is needed. Make them allies and really have them understand how important this is. Then it’s a win-win for all.”