A storm in a shotglass

I was a little bemused this week by the (small) furore –  a storm in a shotglass really – that arose when an angel investor apparently told a startup founder that she’d have a better chance of raising investment funds if she was single.

“If I invest in <company> and its CEO @named – it’s because she’s awesome and not ‘cos of the douchebag investor misogny she’s faced” raged one well meaning supporter on the soapbox that is Twitter.

Around the traps where women gathered, the incident was universally proclaimed as shocking, yet another reflection of the added hurdles faced by women entrepreneurs – and this in the same week as International Women’s Day.  And I don’t mean to belittle the efforts of well meaning armies of women, professing to support each other.

My initial reaction was “oh shit, was that douchebag me?”  It sounds like something I would have said (more on that later).

And then, on confirming that the offending investor was indeed male, I wondered – was there subtext?  Was Mr Angel actually hitting on her,  wishing she was single?  It happens….

But no, apparently not.  His sole crime was to share with her one of the many truths – like it or not – about how angel investors choose where to place their bets.

The thing about single founders – men and women – is that investors (right or wrong) see them as less encumbered.   Building a startup is hard.  Long long hours, stress, travel perhaps, unreasonable demands on your time and your energy.  If you have a wife and kids, a mortgage perhaps – it’s harder.  Of course,  a husband willing to support you and the family while you grow your dream is a plus… and the main reason why this “single people preferred” rule is actually more disadvantageous to male founders.

It may sound like prejudice – indeed it is prejudice – but I can tell you that I know first hand the guilt I feel as an investor director every time I think about my married founders’ families living on a fraction of what they might earn out there in the workforce, in search of the dream of a bigger pot at the end of the rainbow.

Yeah I’m soft.  Maybe not your average angel investor, I know.  But more than anything, this little storm firmed my resolve to continue pushing the angel community to be more honest with founders.

We are doing them no favours when we invite them into our ‘pipeline’ on the promise of a fair, unprejudiced process.  Angels are looking for deal flow, and suffer from FOMO much much more than the average millennial!  The more deals we see, the more chance there is of finding the one we like.  It’s a beauty pageant – only without a consistent set of judging criteria.  Founders beware – we appear to encourage and support, we may actually put in time and effort sharing our expertise and our networks with you, but when it comes to deciding whether or not to write the check, a whole different set of criteria come into play.

In fact when I looked at the pitch deck of our supposed victim of misogyny,  another common angel dealbreaker came to mind.  Alongside the “single people preferred” rule is the “no married couples” rule.  More than half the hundreds of angel investors I’ve surveyed over the years have told me they never, ever invest in husband and wife teams.  They won’t even assess the company on its merits – a husband and wife founder team is a dealbreaker for them.

We need to be honest about these things – each angel is making an individual decision,  based on his experiences,  beliefs, and frankly, what else he has in his portfolio.   When he rejects you, it may not be about you at all – but chances are he probably won’t tell you the full reasons why.  Why would he when doing so opens him up to being pilloried for his honesty?

I don’t know who the angel in question is,  but I do know he’s part of a pool of people donating their time to support young companies – for free.  Rejecting his honest opinion as misogyny simply places this founder slap bang in yet another of our difficult to back buckets – the “uncoachable founder”.  I recently had the experience of having a private comment passed on to a founder team, resulting in a difficult conversation in which they wanted to know WHY I said they are uncoachable – who wants that?

The real message is that every rejection is simply one investor deciding that that founder and his / her business doesn’t meet their personal criteria for writing a cheque.  It’s not a rejection of your worth, it’s not a rejection of your idea – it’s simply a message that this is not the right investor for you.  And actually, it would do well to bear in mind that if I’d invested every dollar of my angel portfolio into Auckland property over the past five years – a much less emotionally and time-draining exercise – I would have already more than doubled my money, and been able to realise those gains in real dollars.  Investors have the right to decide where to invest – what you should not let them do is make you feel inadequate, but ultimately that’s your choice.

So dear founders, know this.  Finding your perfect angel is hard hard work – but when you do,  they can truly make you fly.  Along the way, you will kiss dozens, maybe hundreds of frogs, but each of those frogs has a lesson for you that will make you stronger,  more resilient and ultimately more investible by the right investors for you (assuming of course, that your idea is not actually a dog!)


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