Written By: Dr. Amanobea Boateng

The record shows that female-owned businesses do not scale up as quickly or become as profitable as those owned by their male counterparts. Similar comparisons are made regarding raising finance successfully and whilst the pool of venture capital funds currently stands at $89 billion globally^[i], 98% goes to males and only 2% to women founders^[ii]. This yawning gap has been discussed and researched extensively, with reasons often ascribed to factors external to women rather than of their own making. Because entrepreneurship is still regarded as a predominantly male domain, and men as more entrepreneurial and growth oriented^[iii], gender discrimination and prejudice are often considered to be the root cause of women’s fund-raising challenges. Whilst this view remains valid and cannot be discounted, especially given studies that have been done to prove it, women can find ways to counteract the gender bias of investors. Observations and research on how men and women pitch can give valuable clues on internal factors contributing to these challenges and how to surmount them. GCIC’s “Gender Barriers to Financing” two-day investor-readiness workshop held every year, is specifically intended to educate on navigating the financing landscape, and tackles some of the endogenous obstacles to raising finance faced by women.

Women and men pitch their businesses differently and these dissimilarities hold valuable insights. Both male and female characteristics are on show during a pitch and men and women alike, may display traits associated with the opposite gender. A study showed that investors are more disinclined to fund both men and women who display female characteristics in a pitch. This gives further weight to the gender bias argument by showing that even men who stray from the masculine business stereotypes will be penalised for it. This shows that if women want to improve their chances of raising finance, they must be dispassionate in paying attention to the ways in which they are seen to pitch differently from men and adjusting. Body language, presentation content, and even manner of dress have all been cited as factors that can influence investors and, yes, even these have become gendered. Gender bias based on outward appearance seems particularly unfair and begs the question of why a man should be able to dress casually and succeed in raising finance, whilst women must dress to the nines just to be taken seriously. Despite the temptation to brush this off as frivolous, findings from credible studies and expert observations cannot be ignored.

Research by Harvard, MIT and Wharton^[iv] found that even if businesses were identical, investors would be more likely to invest in a male than a female owner. The study found that in pitch competitions men were 60% more likely to be funded than women. Next, when audio recordings of identical pitches delivered by male and female voices were played to investors, 68% of them opted to fund pitches read by a male voice. Just to rub it in, the study also found that “pro-male bias is even stronger if that man is attractive”. The study concluded that investors prefer pitches given by males over females, even when the content is the same. According to the study, whilst male attractiveness tips the scales even higher in favour of men, women’s physical appearance did not matter. This is contradicted by a separate observation that whilst men may succeed in a pitch wearing a T-shirt and jeans, for women their hair, makeup, shoes and clothes mattered^[v].

As interesting and thought provoking as it may be, we will not be discussing fashion and what not to wear so, suffice it to say that women would be well advised to pay attention to how they dress to deliver a pitch. The focus of today is on other factors that women can actively work on to improve their chances of pitching successfully.

At GCIC’s recent Incubating Climate Innovation Conference two seasoned male entrepreneurs with successful fund-raising track records shared their perspectives. Desmond Koney of Complete Farmer advised founders to “fall in love with the problem rather than being passionate about the idea”. Albeit unintentionally, he hit the nail on the head on a major difference between female and male pitches that has been written about – women do not focus on the problem and how they will solve it^[vi]. Aloysius Attah of Farmerline did the same when he emphasised the need to convey a clear vision^[vii] and ‘align with investors to build credibility’. Women are often deeply passionate about their businesses and want to convey this to their audience, however this can be overdone by dwelling on the inspiration and past accomplishments rather than articulating clearly out what the future holds for the business and how investors will make a return. Clarity must be provided on the vision, the problem, how it will be solved and income streams that will result from this because investors want to know how the business will make money and earn them a return. Men are better at zeroing in on these aspects while women may not be as direct and clear.

When it comes to how a pitch is delivered, men convey more confidence, which makes them convincing. Women on the other hand may display body language and delivery that is hesitant and shows a lack of self-confidence and being unsure of themselves. Fake-it-till-you-make-it might be good advice in this regard: it is worth learning how to help your delivery by adopting the correct posture and speaking in a confident and relaxed manner. Whilst you may be quaking on the inside, practice until your butterflies are flying in formation.

Other ways in which women have been found to differ from men when pitching is that they hold back from presenting a big, bold vision whereas men do not. You may not be there now, but this should not stop you from thinking of a big future for the business and letting the investor see the possibilities backed by financial projections. This brings us to women’s quest for perfection, which is self-defeating and can cause procrastination. Men do not wait to have all their ducks in a row before they make a pitch but can be compelling by their self-assurance in showcasing their business and sharing their confidence in its future. It is also important for women to anticipate and prepare for tough questioning. Preparation for this can be done by examining the business objectively from an outsider’s perspective, imagining the kind of questions that may be asked from best to worst case scenario, and thinking of answers.

Much has been written on what women can do to improve their chances of pitching successfully for finance and in addition to conveying clarity, a bold vision, self-confidence and preparedness, other suggestions for improvement include the following^[viii]:

• Be careful of decision-making based on emotions instead of profit.
• Be willing to modify your product in response to feedback instead of being emotionally tied to it.
• Embrace change.
• Pursue progress rather than perfection.
• Understand your finances.
• Prepare thoroughly.
• Avoid over-use of data.
• Do not take investor rejection personally.
• Tell a unique story but keep it simple.
• Showcase unique strengths.
• Present a highly competent management team.
• Understand the competition.
• Show a clear business model.

Whilst taking note of the above to temper and improve on their fund-raising pitch, women should remain true to themselves and allow their authenticity to shine through. Learning to be convincing and confident should enhance who you are, rather than take away from it and change you.

Reference

^[i] https://www.bain.com/insights/global-venture-capital-outlook-latest-trends-snap-chart/

^[ii] https://www.weforum.org/agenda/2023/12/how-we-can-close-the-venture-capital-gender-gap/

^[iii] Balachandra, L., Briggs, T., Eddleston, K., & Brush, C. (2019). Don’t Pitch Like a Girl!: How Gender Stereotypes Influence Investor Decisions. Entrepreneurship Theory and Practice, 43(1), 116-137. https://doi.org/10.1177/1042258717728028

 ^[iv] https://www.smithsonianmag.com/smart-news/venture-capitalists-are-less-likely-invest-identical-companies-if-theyre-pitched-women-180950048/

^[v] https://finance.yahoo.com/news/investors-explain-why-men-pitch-113004913.html

^[vi] https://www.linkedin.com/pulse/5-things-female-entrepreneurs-should-consider-when-vcs-akbarpour/

^[vii] https://www.linkedin.com/pulse/top-10-mistakes-keep-women-entrepreneurs-from-selling-elyse-archer/

^[viii] https://www.womentech.net/en-at/how-to/what-are-most-common-pitfalls-women-pitching-investors-and-how-avoid-them#

https://fastercapital.com/content/Pitching-your-business-to-investors-as-a-female-entrepreneur.html

https://finance.yahoo.com/news/investors-explain-why-men-pitch-113004913.html

https://www.inc.com/minda-zetlin/7-mistakes-that-are-holding-female-entrepreneurs-back.html

https://www.linkedin.com/pulse/top-10-mistakes-keep-women-entrepreneurs-from-selling-elyse-archer/

https://www.linkedin.com/pulse/5-things-female-entrepreneurs-should-consider-when-vcs-akbarpour/