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Mastering the Art of Emailing: A Guide to Attracting the Right VC Investors

In the fast-paced world of VCs, where the average clock rate of finance email engagement stands at a mere 2.72% (as reported by Mailchimp), capturing the attention of venture capitalists (VCs) becomes an arduous task. With VCs receiving an average of 12 pitches per day, it’s crucial to stand out from the crowd. To enhance your chances of getting an investor to actually read your email, we have curated a comprehensive list of dos and don’ts.

The 2 Essential Steps Prior to Contacting an Investor

Are you VC fundable?

Before sending that email, take a step back and assess if your startup is VC fundable. Not all startups are suitable for VC investment, and that’s perfectly okay. Typically, VCs look for high-growth startups that have the potential to provide significant return on investment. 

Take our investor readiness assessment to see if you’re VC fundable.

Research and Understand the Investor’s Thesis & Profile

Before hitting the send button, it’s crucial to familiarise yourself with the investor you’re targeting. Learn about their investment history, the sectors they are interested in, their funding stage preferences, and the geographical regions they operate within. Checking the compatibility between your startup and the investor’s preferences can save both of you a lot of time. 

Once you have identified potential investors, dig deeper to gather more information about them. Use platforms like LinkedIn, Twitter, and the investor’s personal blog or website to understand their investment philosophy, recent investments, areas of interest, and personal tidbits that you could use to personalise your email.

Investors usually have a clear focus when it comes to the industry, stage of the business, and the type of business model they prefer. This will help you shortlist potential investors who are more likely to be interested in your business proposition. If your startup doesn’t align with their investment focus, there’s a high probability that your email might be ignored.

Now you’ve identified your list of potential investors, let’s craft the perfect email.

Your email subject should be short, specific, personalised, and clear. It should hint at your startup’s achievements or potential and align with the VC’s interests. Avoid hyperbole and keep it professional.

Personalise Your Email Based on Your Research – inc positive signal

Once you’ve researched the investor and verified alignment with their investment focus, you should be equipped to craft a personalised email with a strong positive signal. 

VCs love validation. Whether it’s impressive user growth, strong customer testimonials, or a robust, experienced team, having positive signals can provide that much-needed credibility and pique a VC’s interest.

And while a generic email can come off as impersonal and spammy. If you mention some of their past investments you admire, refer to a recent keynote they gave, or mention a shared connection or interest, it shows that you’ve put in the effort to understand them and their investment strategy.

Craft an Engaging Subject Line

The subject line is the first thing your recipient will see and should compel them to open your email. Make sure it succinctly summarises your business proposition and stands out from the generic “Investment Opportunity” emails they likely receive often.

Keep it short, the complete text should be easily readable when viewed on a mobile phone notification.

Let’s start with some great examples of email subject lines:

1. “PropTech startup| 300% YoY growth | Exited Founder | Seed investors wanted”

2. “AI in healthcare: Improving patient outcomes by 5x while reducing costs 250%”

3. “Tim Draper-backed Fintech – 500K users – Exited founder – Series A”

4. “E-commerce logistics startup | $1M+ ARR | Seeking strategic investor

These subject lines are compelling because they concisely convey what the company does, mention a key success or growth statistic, and they state the type of investment being sought. 

Here are some examples of bad email subject lines:

1. “Investment Opportunity”

2. “Please read this”

3. “Funding required for startup”

4. “Can we talk about my business?”

5. “Looking for an investor”

6. “Invest in us!”

7. “10 minutes of your time”

8. “100X ROI investment opportunity”

These subject lines are ineffective because they are too vague, lack specificity, and do not convey what the business does or why the investor should be interested. They don’t showcase any unique value proposition or indicate the stage of funding the startup is in. These factors reduce the chances of the email being opened, let alone securing interest from the investor.

Keep Your Email Brief and Direct

Your email should be concise, clear, and to the point. Start by introducing yourself and your company, then briefly describe what your business does and why it is unique. Remember to provide some compelling numbers or data that demonstrate your business’s traction. And use bullet points.

Write an email body that gets your pitch deck opened

The body of your email should succinctly explain your startup’s value proposition, why you’re reaching out to this specific VC, and what you’re looking for.  Your email body should be concise, respectful, and intriguing. Highlight key achievements, provide a clear call to action, and attach your pitch deck. 

Share a pitch deck that gets an investor reply\

A good deck tells a compelling story, is visually appealing, and is easy to digest. Let it demonstrate your startup’s value proposition, show market potential, and introduce your team. It should also explain your revenue model and provide financial forecasts.. In contrast, a bad deck might be overly detailed, unstructured, or lacking crucial information.

Follow our linkedin page, like this post, share it and DM  to 💡unlock our VC-proven and tested Pitch Guideline, featuring Slide by Slide guidance. 

You can dive deeper into your pitch deck’s potential and decode your investor appeal with our Scorecard – a comprehensive tool that objectively assesses your startup’s potential, identifies areas of strength and improvement, and provides actionable insights. Understand where you stand and strategically enhance your appeal to secure the funding you need.

Clearly State Your Call to Action

What do you want the investor to do after reading your email? Whether it’s providing feedback, expressing interest, or scheduling a call or meeting, make your call to action (CTA) clear and easy to follow.

Avoid Triggering Spam Filters

Avoid using phrases and keywords commonly associated with spam. Also, ensure that your email address is verified, use SPF and DKIM records to ensure your email’s authenticity, and maintain a low bounce rate.

Phrases that founders should avoid using when emailing VCs as they might be interpreted as spam or make the email seem less professional:

Guaranteed success: Venture Capitalists understand that investing in startups involves risk. Promises of guaranteed success can seem overconfident and naive.

This is a unique opportunity: The phrase is overused and may trigger spam filters. It’s better to explain why your startup is unique in tangible terms.

Once in a lifetime Similar to the phrase above, this is a cliché and might not be taken seriously by experienced investors.

Get in now before it’s too late: This creates a sense of urgency that may come off as desperate or manipulative.

Huge return on investment: Without providing specific numbers or data, this phrase can seem empty and potentially misleading.

Trust me: Trust is earned through consistent actions and evidence, not simply asked for.

We will be the next [successful company]: Comparing your startup to successful ones (like saying “we will be the next Amazon or Google”) without solid facts can appear presumptuous.

Please forward this: Asking the recipient to forward your email to other VCs or their contacts can be seen as unprofessional and desperate.

Help: This word can make your email sound desperate and might get caught in spam filters.

Confidentiality assured: This may seem suspicious as professional VC firms always maintain confidentiality.You want to sound professional and show that you understand the business and the risks involved. Be concise, and let your business plan and growth strategy show your potential value instead.

Show You’re a Good Fit

Highlight why your company aligns with the investor’s investment thesis. Show that you’ve done your homework, and your company fits their investment criteria.

Here’s a simple template you can start with:

Subject: [Your Company] – [Unique Value Proposition] seeking [Funding Amount]

Hi [Investor’s Name],

I am [Your Name], the founder of [Your Company], a [Your Industry] startup that [What your company does]. 

I came across [something about the investor] and felt that our company aligns well with your interest in [Investor’s area of interest].

Our current traction:

  •  [Mention significant achievement or compelling metric].
  •  [Mention significant achievement or compelling metric].
  •  [Mention significant achievement or compelling metric].

This had been achieved by a team of [Number of team members] that has previously [talk of your team’s achievements prior to this startup, use numbers where you can]

We’re currently seeking [Funding Amount] to [What the funding will be used for].

I would appreciate it if you could take a look at our pitch deck attached and provide your valuable feedback. 

Looking forward to hearing from you.

Best,

[Your Name]

Remember, while this template can serve as a starting point, the most successful cold emails are those that are personalised and tailored to the recipient.

Be Professional

Ensure your email is free from typos and grammatical errors. Use a professional tone and refrain from using overly casual language. While you want your passion for your business to shine through, remember that this is a business communication.

Use Your Company Email

It’s important to send the email from a company email address, ideally one that includes your name, to establish credibility and professionalism. 

Offer Value

Make your email not just about asking for funds but also about offering value. Whether it’s an opportunity to be a part of the next big thing in your industry, or an idea that aligns with the investor’s interests, make sure they understand what’s in it for them.

Send and Track Your Email

Use email tracking tools to monitor if and when the investor opens your email, how many times it is opened, and if any links are clicked. This will help you measure the effectiveness of your email.

Email tracking systems are tools that allow you to know if and when your emails are opened, and what links are clicked within your emails. They can provide critical data on email engagement and can be particularly useful when sending cold emails to investors or prospects. 

Here are a few examples of email tracking systems:

HubSpot Sales Hub: This tool is a part of the HubSpot ecosystem and provides email tracking as part of its service. It notifies you when an email is opened or a link is clicked. It can also schedule emails and provides a document tracking feature.

Yesware: Yesware offers tracking for emails, presentations, and pageviews, providing data on when your emails are opened, where they’re opened, and on what type of device. It can also show you if your attachments are viewed and for how long.

Mailtrack: This is a simple email tracking solution that integrates with Gmail. It tells you if your emails have been read and how many times they were opened. 

Streak: Streak integrates directly with Gmail and is particularly helpful for CRM purposes. It provides information on when and where your email was opened.

Mixmax: Mixmax is another tool that offers powerful analytics, including tracking opens, clicks, downloads, and replies. It also provides features for scheduling emails and creating sequences.

BananaTag: BananaTag allows you to track emails, schedule sends, and create email templates. It can be integrated with both Gmail and Outlook.

Follow Up

If you haven’t received a response after a reasonable period, don’t be afraid to follow up. Be polite and persistent, but not annoying.

Follow up 3 business days after the first email is sent and then 4 business days later.

Be Patient

Remember that investors are busy people and might take time to respond. Be patient, and while it’s okay to follow up again after a week or two, avoid sending multiple follow-up emails in a short period.

Writing an effective cold email to potential investors is more art than science. It requires a thorough understanding of your audience, clear and concise communication, and a touch of personalisation to make your email stand out. The steps and template provided here will give you a good starting point, but remember that the most compelling email will be one that tells your unique story and shows why your startup is a worthy investment.

As you embark on your journey towards securing VC funding, remember that the path may be challenging, but it can also be rewarding and transformative. The art of writing an effective cold email to investors is a crucial first step, and we’re glad you’re prioritising it. We hope that our guide serves as a valuable resource for you in crafting compelling and personalised emails that grab the attention of prospective investors.

At The200BnClub, we understand that the process doesn’t end at sending cold emails. We’re here to help every step of the way, from refining your pitch deck to preparing for potential meetings with investors. Our accelerator program offers an array of services designed to maximise your success in the fundraising process. So whether you need help perfecting your pitch, understanding investor responses, or navigating through the investment landscape, you can count on our expertise and commitment. You can apply to our program here.

We wish you the best of luck with your VC outreach. May your passion and innovation resonate with your potential investors, and may your entrepreneurial journey be filled with success, growth, and valuable learning experiences. 

Other materials https://odetocoldoutreach.notion.site/An-Ode-to-Cold-Outreach-6d7dd3ba3f5844188158d31dee7c36eb
https://elizabethyin.com/2016/09/01/7-tips-for-cold-emailing-investors/
https://abhim.substack.com/p/the-art-of-crafting-your-startups

Pioneering Change in Tech: A sit down with Bridget Greenwood and Dr. Amber Ghaddar & Hannah Hunt from 356 Finance

Explore an inspiring dialogue with our co-founders, Bridget Greenwood and Dr. Amber Ghaddar, as they delve into their transformative journey within the tech sector. This conversation sheds light on how The200BnClub is pioneering change and championing female entrepreneurship. Discover key insights on navigating challenges, addressing unconscious biases, and the critical role of fostering a supportive community. Join us in this empowering exploration of innovation and female leadership in technology.

Beyond the Code: The Ethical Crossroads of AI Development

Following on from our “Mindf*ck to Mindful” article, we explored how Silicon Valley might be a crucible of technological advancement, but its luminous glow often blinds us to the shadows it casts. And as Christopher Wylie’s revelations and the persistent clarion calls of AI experts like Timnit Gebru and Joy Buolamwini have shown, there’s more beneath the surface than meets the eye.

 🧭 Navigating the Political Landscape of Language Models

A Spectrum of Ideologies: 

Language models (LMs) are not monolithic in their perspectives. They span the entirety of the political compass. The data they’re trained on—be it modern web texts like CommonCrawl or older book texts—plays a significant role in shaping their ideological leanings. Surprisingly, even models from the same family, like ALBERT and BART, display distinct political biases based on their size and training data.

The Trump Era & Hyperpartisanship: 

Political climates, such as the heightened polarisation post the Trump election, leave an indelible mark on LMs. They absorb this heightened polarisation, especially when trained on data from such eras. This raises concerns about the possibility of hyperpartisan LMs that could exacerbate societal divisions.

📚 The Impact of Training Data

A Reflection of Their Training:

LMs are, essentially, a mirror reflecting their training data. Train them on left-leaning corpora, and they lean left. The reverse is true for right-leaning corpora. Furthermore, the type of content—whether it’s news media or user-generated social media content—also determines the bias, especially when discerning between economic and social values.

 🎭 Bias in Action: Performance Variations 

A Double-Edged Sword:

While biases in LMs can be concerning, they also lead to varied performances in downstream tasks. For instance, left-leaning LMs excel in identifying hate speech against groups like LGBTQ+ and BLACK. Language models trained on right-leaning data sources tend to be more adept at detecting derogatory or harmful content directed towards groups such as men and white individuals.

🛠 Strategies to Mitigate Bias

Harnessing the Power of Diversity:

One of the most promising approaches to mitigate the inherent biases in LMs is to employ a “Partisan Ensemble.” By leveraging multiple perspectives, we can achieve a more balanced and comprehensive model performance. Another tactic, “Strategic Pretraining,” focuses on making LMs more attuned to detecting hate speech and misinformation from diverse perspectives, further enhancing their effectiveness in specific scenarios.

 🌏 A Global Perspective: Beyond Political Bias

While political biases are a significant concern, LMs also grapple with gender, intersectionality, and regional biases. Addressing these requires:

1. Diverse Data Sets: Curating diverse datasets that represent a spectrum of genders, ethnicities, and intersectional identities can help in reducing these biases.

2. Regional Inclusivity: Ensuring that training data encompasses content from varied cultural contexts, languages, and dialects can counteract regional biases.

🤔 The Road Ahead

Building truly “unbiased” LMs is a monumental challenge, primarily because our definitions of “unbiased” are continually evolving and are context-dependent. However, by harnessing diverse training data, employing innovative strategies, and maintaining a vigilant eye on model outputs, we can steer AI towards a more ethical and balanced future.

Remember, in the intricate dance between innovation and ethics, every step, every tweak, and every dataset counts.

🤔 A Final Thought

As we stand at the precipice of AI’s potential, one must ask: If AI is a reflection of our collective knowledge and biases, how can we ensure it represents the best of humanity and not just a reflection of our divisions? How do we move from mere acknowledgment to active betterment in our technological endeavours?

“Is the tech industry ready to embrace the insights of diverse experts and ensure the ethical development of AI?”

We’d love to hear your thoughts. Do you think the tech world is doing enough? What biases have you encountered in AI? We’d love to know, share your experiences and insights in the comments. Let’s get the dialogue flowing! 🚀👇

From Mindf*ck to Mindful: Pioneers, Pitfalls, and the Path Forward for AI

Drawing from the revelations in the Rolling Stone article, it’s evident that the concerns of AI experts have long been echoing in the corridors of tech. Yet, as our exploration suggests, there’s a pressing need to move beyond mere acknowledgment. We must actively integrate these insights into the very fabric of AI development and innovation, ensuring a future where technology is both groundbreaking and grounded in ethics.

🔍 Beyond Silicon Valley’s Echo Chamber: The Critical Insights of AI Experts

In the tech realm, Silicon Valley stands as a beacon of innovation. Yet, the rapid advancements often overshadow the ethical dilemmas they bring. Christopher Wylie’s “Mindf*ck” exposes the sinister side of big tech, revealing the weaponization of data for political manipulation. Experts like Timnit Gebru and Joy Buolamwini have been pivotal in highlighting the lurking dangers in AI and big tech.

🚫 Silicon Valley’s Ethical Oversights

The relentless drive for innovation has led to a myriad of ethical issues. From data breaches to AI biases, the consequences of unchecked development are becoming increasingly evident.

📘 Lessons from “Mindf*ck

Wylie’s revelations include alarming instances like Cambridge Analytica’s unauthorised data harvesting from millions of Facebook users. This data was weaponised to craft targeted political ads, spreading misleading stories, such as false claims about the Pope endorsing Trump or deceptive narratives about the Clinton Foundation.

Timnit Gebru in 2018

🔬 Leading AI Experts Raise the Alarm

Subject matter experts like Gebru and Buolamwini have consistently spotlighted the biases in AI systems and their potential repercussions, especially on marginalised groups.

💰 The Investment Imbalance in AI

The tech sector’s enthusiasm for AI is evident in the vast capital directed towards AI projects.

Global AI private investment in AI was $91.9 billion in 2022, 18 times greater than it was in 2013.

However, there’s a glaring disparity:

Profit-driven AI vs. Ethical AI

Mainstream AI projects, focused on quick profits and scalability, receive hefty investments. In contrast, projects centred on ethical AI and safety are often overlooked.

Immediate Profits vs. Sustainable Safety

The promise of quick returns often eclipses the essential focus on long-term safety and ethics.

The Price of Ignoring Ethics

Underfunding ethical AI research can result in systems that, while technologically advanced, are ethically flawed, perpetuating societal biases and infringing on individual rights. 

Google Photos’ Image Recognition

Description: In 2015, Google Photos’ image recognition algorithms were used to categorise and tag photos automatically.

Issues: The software mistakenly labelled African Americans as “gorillas.” This grave error highlighted the racial biases present in the AI’s training data.

Recall: Google apologised for the mistake and promised to fix the issue. Instead of improving the categorisation, Google decided to remove “gorilla” as a label entirely to prevent the software from making such a mistake in the future.

IBM, Microsoft, and Amazon’s Facial Recognition Technologies

Description: These tech giants developed facial recognition technologies that were sold to law enforcement agencies.

Issues: Studies, including one by MIT’s Joy Buolamwini, found that these technologies had higher error rates for darker-skinned and female faces. This bias could lead to wrongful arrests and perpetuate racial and gender biases in policing.

Recall: In 2020, in the wake of the Black Lives Matter protests and the concerns raised about the potential misuse of the technology, IBM announced it would no longer offer general-purpose facial recognition or analysis software. Amazon announced a one-year moratorium on police use of its facial recognition technology, Rekognition. Microsoft also declared it wouldn’t sell its facial recognition technology to police departments until federal regulations were in place.

Northpointe’s COMPAS (Correctional Offender Management Profiling for Alternative Sanctions

Description: COMPAS is a risk assessment tool used by U.S. courts to assess the likelihood of a defendant becoming a recidivist.

Issues: An investigation by ProPublica in 2016 found that the software was biased against Black defendants, who were more likely to be incorrectly judged as having a higher risk of reoffending compared to white defendants.

Recall: While COMPAS hasn’t been fully recalled, its use has become highly controversial, and its reliability and biases have been the subject of significant legal and academic scrutiny.

🔄 Time for a Shift in Perspective

The tech world needs to broaden its horizons. By valuing and integrating insights from a diverse range of experts, we can chart a path towards responsible and ethical tech development. It took us more than 4 years of negotiations and discussions for GDPR, once we realised we needed regulation, and even then Meta/Facebook was recently given a 1.2 Billion fine for breaching data transfer rules. We’ve seen a wake of harms from misuse of data & technology.

🔔 A Wake-Up Call for the Tech Industry

The revelations in “Mindf*ck” and the persistent efforts of AI experts serve as a clarion call. A holistic, ethical, and inclusive approach to AI and tech innovation isn’t just a recommendation—it’s a necessity.

🤔 The AI Leadership Paradox

It’s puzzling that those who pioneered AI advancements are now the ones cautioning about its dangers. Dubbed the AI Doomers, 350 individuals signed the document – with names like Open AI’s Sam Altman, ex-Google’s Geoffrey Hinton. Their warnings, while crucial, underscore a deeper issue:

Celebrating the Alarm-Raisers

These leaders are often praised for their ethical stance, but why weren’t these concerns addressed earlier?

Overlooking Diverse Expertise

Despite the warnings, the tech world often neglects voices from diverse backgrounds. The insights of experts with varied experiences are crucial for a comprehensive understanding of AI’s challenges.

The Risks of a Limited Perspective

Depending solely on a small group for AI development and critique can lead to significant oversights.

Central to the AI debate is a privileged group that has been steering its trajectory.  While the media and others extol their innovations, they simultaneously heed their warnings about AI’s potential societal risks. This poses the question, does this mean this privileged group is advocating for more resources and authority to address the very dangers they’ve brought to bare, while continuing to side line the long standing expert voices of AI ethicists?

🚀 Investing in Difference: How VC Funding Can Benefit from Rethinking Female 🚺 Social Norms 🚀

Did you know that gender-based societal norms can significantly impact an entrepreneur’s ability to secure venture capital (VC) funding?

🤔 Research has shown that biases against feminine-stereotyped behaviours affect both male and female founders, leading to unequal funding opportunities. But here’s the twist – it’s not about gender itself, as our vast network of over 225 VC Partners has demonstrated.

🔍 Dive deeper into the surprising insights and eye-opening statistics on gender bias in VC funding in our latest article! 👇

⛵ Discover how societal norms influence women’s behavior in the startup world, and how this can pose unique challenges for female founders when securing investments.

🚀 Learn about gender role theory and its impact on entrepreneurship, shedding light on the biases that entrepreneurs face in male-dominated fields.

🌟 But it’s not all gloom and doom! The article uncovers empowering strategies for VCs to challenge and mitigate gender bias in their decision-making processes. From embracing ‘win-win’ negotiation styles to recognizing diverse decision-making approaches, there are actionable steps to level the playing field for all founders.

⏳ Time is of the essence! Let’s work together to create a more equitable and inclusive startup ecosystem. 💪 Read the full article 👇now, like and share!

Overview

Gender-based societal norms often influence women’s behaviour, affecting their ability to secure venture capital (VC) funding. Biases against feminine-stereotyped behaviours also exist, impacting the funding received by both male and female entrepreneurs. However, it’s not gender itself that deters investor interest, as shown by our VC Partners network of over 225 members.

Research highlights the incongruity of VC funding decisions, revealing gender biases rather than meritocracy. This includes a New Zealand study which found that male-only founder teams, despite having the lowest returns, received the most funding. Women and men delivering the same pitches resulted in men being 60% more successful at securing investment.

At The200BnClub’s Accelerator Programme – beyond what a traditional Accelerator provides – we work to tackle these biases and equip female founders to effectively persuade VCs. To minimise gender bias, we also propose strategies that VCs can implement such as acknowledging the flaws in human decision-making, embracing ‘win-win’ negotiation, redefining risk perception, increasing visibility, recognising different decision-making styles, redesigning systems to mitigate biases, recording and evaluating pitches, reflecting on powerful women, exposing to counter-stereotypical examples, being transparent, and maintaining a feedback loop.

The shift in narrative is steady, with biases becoming more acknowledged, behaviours changing, and the benefits of diverse leadership gaining recognition. But with only 2.1% of US VC funding going to female founders in 2022, It’s imperative we intensify efforts to eradicate biases from decision-making processes for a brighter future for female founders and the start up ecosystem as a whole.

Investing in Diversity: How VC Funding Can Thrive by Embracing the Strength of Female Founders

Gender-based societal norms often shape women to express qualities such as humility, empathy, kindness and the inclination to foster relationships. While these qualities have numerous strengths, they can paradoxically present challenges in situations where expected negotiation and assertiveness styles are required, particularly in securing venture capital (VC) funding.

Family roles across societies often depict women as caregivers. In the UK, women are seven times more likely than men to leave their job to tend to caregiving commitments, emphasising the role of empathy, patience, and kindness. These norms are further reinforced in popular culture and education, with narratives like the ‘damsel in distress’ and the ‘angel in the house’ often depicting women as passive, modest, and selfless. Educational institutions frequently encourage girls to be agreeable and to conform to societal expectations (The Confidence Code: Kay K. & Shipman, 2018).

Societal norms and biases infiltrate professional environments, resulting in a twofold impact. On one hand, these biases can cause women to undervalue their accomplishments and hesitate in expressing their opinions compared to their male counterparts. On the other hand, even when women step forward, they are often still undervalued. As Linda Babcock illuminates in her groundbreaking book “Women Don’t Ask,” women and men are equally likely to ask for a raise, yet women typically receive 20% less. This striking disparity indicates the deep-seated gender bias that persists in professional contexts and we observe spilling over into the VC world.

Further research supports that due to stereotypical characteristics attributed to each gender, jobs and occupations that are dominated by men or women can become stereotyped as masculine or feminine (Eagly & Karau, 1991Heilman, 1983Muehlenhard & Peterson, 2011Wood, 1999). As a result, research applying gender role theory argues that success in male- and female-dominated occupations requires correspondingly gender stereotypical characteristics (Eagly, 1987Eagly & Karau, 1991Heilman, 1997). Extending this theory to entrepreneurship suggests that, because entrepreneurship is a “man’s world,” both men and women should display stereotypical masculine characteristics to garner more interest and support from resource providers like venture capitalists (Gupta, Turban, Wasti, & Sikdar, 2009.

Contrary to common belief, the study ‘Don’t Pitch Like a Girl’ shows that being a female entrepreneur doesn’t inherently reduce investor interest, as evidenced by our vast network of over 225 VC Partners. The study indicates that the bias isn’t against gender per se, but against feminine-stereotyped behaviours exhibited by entrepreneurs, regardless of their sex.

This bias is born out in many pieces of research, including the most recent research from

The Gender Investment Gap in New Zealand, which has startling statistics:

🔔 The group with the LOWEST returns receive the MOST funding – startups with male-only founder teams.

📣 With the SAME content, women and men pitched to a group of investors. Men were 60% more successful at receiving investment. With the SAME pitch.

🔉 Which demonstrates that venture capitalist don’t invest only on merit and that gender biases do come into account, and every pitch is not considered equally.

At The200BnClub’s Accelerator Programme, we have firsthand experience with how these societal norms pose challenges for our female founders. However, it’s crucial to not just focus on the hurdles but celebrate the unique strengths and successes of female entrepreneurs.

By doing so, VCs can make sure they’re not missing out on great investment opportunities. In New Zealand alone, this bias is estimated to cost VCs $32 Billion, while the UK is missing on over £200 Billion that can be generated by female led businesses if the UK invested in women at par with best in class countries. (Hence the name of our accelerator 😉).

This bias persists in spite of a study by Caliper in 2005 which revealed that contrary to ingrained norms and stereotypical characteristics attributed to each gender that:

“Women leaders tend to be more assertive, persuasive, willing to take risks and have a stronger need to get things done than their male counterparts” 

Their research discovered:

  • Women leaders are more persuasive than their male counterparts.
  • Feeling the sting of rejection, women leaders learn from adversity and carry on with an “I’ll show you” attitude.
  • Women leaders have an inclusive, team-building leadership style of problem solving and decision making.
  • Women leaders are more likely to ignore rules and take risks.

All qualities admired by VCs.

In the research titled: Don’t Pitch like a Girl, it found when entrepreneurs display stereotypically “feminine” behaviours during venture capital “elevator pitch competitions” they are less likely to be selected as finalists regardless of actual gender. 

Humility or agreeableness should not be misinterpreted as a lack of competence. VCs need to focus on the founders’ track record and potential. Throughout the cohorts we ran, we noticed that most women are muted about their previous achievements out of fear of sounding arrogant. Women founders must be vocal about their competence and achievements VCs cannot accurately assess them without clear and assertive communication.

In our accelerator program, we specifically address the unique challenges faced by female and other underrepresented founders. Beyond what a traditional accelerator offers in terms of fine tuning business models and access to funding, we equip them with strategies to effectively persuade VCs and navigate the pitching process. Limiting gender bias, particularly in high-stakes scenarios like venture capital pitches, involves a combination of awareness, proactive steps, and structural changes. Here are some strategies that VCs and founders can use to limit gender bias:

10 Ways to hack our brains so we can change and challenge perceived competence stereotypes

1. Recognise as humans our decision making is flawed

Contrary to traditional economic theory, which assumes individuals make choices independently, behavioural economists argue that decisions are largely influenced by one’s social context and networks. In fact, imitation of others’ behaviour is often an automatic response.

The World Bank Development Report (2015) attests to this, stating, “Individuals are not calculating automatons. Instead, they are malleable and emotional actors, influenced by contextual cues, social norms, shared mental models, and local social networks.”

This behavioural insight is crucial in understanding disparities in various sectors, including entrepreneurship. As we’ve already discussed the report “Don’t Pitch like a Girl” uncovers a bias against behaviours typically perceived as feminine, regardless of the gender of the individual displaying them. Meanwhile, the study in New Zealand reveals an ironic contradiction: the group with the lowest returns—startups with male-only founder teams—receive the most funding.

Further evidence comes from a 2017 study by Kanze, Huang, Conley, and Higgins. Their research brings to light a striking disparity in the questioning style of investors: 67% of questions posed to male entrepreneurs were promotion-oriented, while 66% of those asked of female entrepreneurs were prevention-oriented.

The implications of this bias are significant. The study found that founders subjected to prevention-oriented questions raised 7 times less funding. This underscores the profound effect of social context and biases on decision-making and outcomes, reinforcing the need to challenge and change these dynamics.

“For every additional prevention question asked of an entrepreneur, the startup raised a staggering $3.8 million less, on average.”

Together, these studies underscore the reality that VC investment decisions are not solely based on merit. Gender biases persistently factor into the evaluation process, meaning pitches aren’t always considered on an equal footing.

2. Embrace ‘Win-Win’ Negotiation

Women may not assert themselves the same way as men do due to societal conditioning (Babcock & Laschever, 2003). Instead women often employ a cooperative, ‘win-win’ negotiation strategy, seeking mutually beneficial outcomes that foster long-term relationships. Contrarily, men tend to use a competitive, ‘win-lose’ approach. The cooperative style often used by women lead to sustainable business partnerships, a valuable asset in the venture capital landscape.

2. Redefine Risk Perception

Women’s perceived humility or tendency to downplay their achievements compared to their male peers is often mistaken for a lack of ambition and therefore seen as a more risky investment. However, this humility can encourage realistic assessments of risks and opportunities, contributing to sustainable business growth. Bearing in mind venture capitalists typically approach financial projections in pitch decks with a healthy degree of scepticism, given that male entrepreneurs are naturally optimistic about their ventures and tend to provide high forecasts, female founders represent a more realistic approach. Remember that when it comes to forging a path less travelled, women leaders are more likely to ignore rules and take risks.

3. Increase Visibility: 

While societal norms might cause women to self-promote less aggressively, their emphasis on relationship-building often helps them establish strong networks of support. In a venture capital context, this can lead to enduring partnerships and collaborations. This can mean that female founders might not put themselves forward as readily as men, but VCs can counteract this by proactively reaching out to diverse networks and partnering with programs like The200BnClub to ensure they have a quality pipeline of female founders and mixed gendered teams.

4. Recognise Different Decision-Making Styles: 

A lot of the unconscious bias stems from stereotypical ideas of what male leadership traits look like and that they’re preferred and represent success over female leadership traits. The traits often associated with women, such as empathy and collaboration, can be tremendous assets. A 2022 McKinsey Global Institute report showed that companies with gender-diverse executive teams were 25% more likely to outperform in terms of profitability. 

Recognising that a variety of styles provide a variety of benefits when considering pitches is key. For example, if a founder has a consensus-driven approach, it can lead to slower decision-making, but it can also result in well-considered, team-backed decisions. Considering 18% of startups fail due to team problems and other human-resource-related issues, this is a valuable benefit.

VCs should appreciate diverse decision-making styles. 

Founders can dispel misconceptions by communicating the rationale behind their decision-making processes.

5. Powerful Women Reflection:

Before entering a pitch or making a decision, take a moment to reflect on powerful and successful women in the industry. This could help counteract any underlying biases by priming your mind with positive associations related to women and leadership. Remember that successful founders don’t all look the same, and often aren’t your stereotypical tech bro mould

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6. Redesign systems, processes and structures to mitigate biases:

Accepting the insights of behavioural economists—that our decision-making processes are often flawed—we must work towards designing systems that help us navigate and avoid unconscious bias. As Iris Bohnet elaborates in her book ‘What Works: Gender Equality by Design,’ the route to achieving gender equality is not about ‘fixing’ women but about transforming the systems and environments where decisions are made.

Current statistics make it clear that traditional methods, which typically involve urging women to alter their behaviour or providing them with additional resources, are not sufficient to effect enduring change. This is starkly illustrated in funding disparities: companies with all female-founding teams raised only 2.1%—around $800 million—of the estimated $37 billion invested in U.S. startups in Q1 2023, as reported by PitchBook. 

Instead, we advocate for redesigning systems, processes, and structures to mitigate the impact of unconscious biases and promote more equitable outcomes for everyone.

Venture capitalists often employ scorecards as structured evaluation tools to assess startup pitches and potential investments. These scorecards detail specific criteria and weightage, allowing VCs to rate pitches on facets like market opportunity, team expertise, revenue potential, scalability, traction, and more, thereby integrating both quantitative and qualitative data. Such a method is effective in mitigating bias to an extent. 

However, when VCs aggregate scores to compare startups, determine portfolio fit, and make informed investment decisions, their gut instincts and past experience inevitably influence their final choices. This is where we propose an upgrade: scorecards should be refined to ensure an equal number of preventive and promotive questions are asked of all founders, irrespective of their gender.”

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7. Counter Stereotype Exposure: 

Regularly expose yourself to counter-stereotypical examples in your industry, which can help challenge and change biased mental models over time.

8. Transparency: 

Be open about the decision-making process and criteria. Transparency can help keep everyone accountable and makes it easier to identify and address any biases that might be influencing decisions.

9. Record, transcribe and evaluate pitches:

Implement a system to record, transcribe, and evaluate each pitch. This process facilitates a direct comparison of the types of questions posed, the data presented, and the responses given by founders. By having a comprehensive written record of each pitch, decision-makers can examine them in detail, looking for patterns in questioning that may suggest bias. Furthermore, this also allows for an unbiased analysis of how founders respond to different types of questions and the quality of data provided in their pitches. Over time, this wealth of information can help pinpoint and rectify unconscious bias, ensuring a more equitable evaluation process.

10. Feedback Loop: 

Regularly review and refine the decision-making process. Look for patterns that might suggest gender bias, and seek feedback from others to ensure continuous improvement. 

Remember, bias is often unconscious and unintentional, but it can still have significant effects. Implementing strategies like these can help to reduce gender bias and make the decision-making process fairer and more equitable.

The narrative is steadily shifting as biases become more widely acknowledged, younger generations alter their behaviours, and the advantages of diverse leadership gain recognition. While numerous investors and organisations are actively working to support and fund female founders, appreciating their distinctive insights and contributions, we need to intensify our efforts to eradicate biases from our decision-making processes. This holds true across all genders. Only through such concerted efforts can we illuminate a bright future for female founders who dare to assert their presence and unapologetically celebrate their achievements.

If you’re a VC interested in discussing your current diversity strategies, exploring fairer assessments or taking part in our corporate interactive course, reach out to Bridget at bridget@the200bn.club and let’s pave the way for success together.

The Gender Index Report 2022. Results for Wales and Northern Ireland

The gender inequality in female-led businesses is still stubbornly high. However, women play an essential role in economic growth in the UK and around the globe.

Earlier in the blog series, we examined the gender inequality results in England and Scotland; now, we’ll take a closer look at Wales and Northern Ireland. 

Interestingly, when it comes to female entrepreneurship, these two nations show varying disparities, suggesting that we are still far from the ideal situation.

Findings for Wales

Over two decades, improving entrepreneurial inclusivity has been a policy focus for Wales. The Welsh government has implemented numerous initiatives and acts to support women-led businesses and greater diversity, including The Well-being of Future Generations Act.

Welsh Female-Led Enterprises Had Greater Turnover Than the UK

One of the striking achievements in Wales is a much larger turnover growth rate compared to other UK countries. 

The average revenue growth of female-led businesses in Wales is 21%, even though only 2.9% of Britain’s female-headed companies are in Wales. In the remainder of the UK, the turnover growth rate for female-led businesses is 17.8% in England, 16.63% in Scotland, and 18.16% in Northern Ireland. Contrastingly, average turnover growth rates in men-led firms are lower throughout the UK, except in the North East, demonstrating women’s potential and capacity to grow businesses at a steady pace.

Wales has a relatively high percentage of female-led businesses in education, health, wellness, and social services. Interestingly, the most impressive turnover growth was observed in construction, agriculture, forestry, and fishing.

Wales Dominates in Female-Led ‘High-Growth’ Startups

The general trend in the UK shows a more pronounced under-representation of female-run ‘high-growth’ ventures. However, Wales stands out by having the highest proportion of female-led companies across Britain (12.4% of Welsh companies are women-led against a UK average of 8.8%). This trend is particularly true in the education, health, well-being and social care sectors mentioned above.

There remains a lack of women leaders in financial services, manufacturing, IT, technology, agriculture, and real estate industries.

External Financing Is Comparable to the Rest of the UK

Women-owned businesses in Wales were able to acquire external financing at a rate of 19.4%, which is similar to 21.1% for the UK as a whole.

Moreover, Welsh enterprises have over 62,000 investors, with just under one-third being female. These results are comparable to those elsewhere in the UK (outside London).

The Data for Northern Ireland

Last year, Northern Ireland set out an economic objective to become an elite small advanced economy in the world by concentrating on innovation in areas where the country has strengths and creating a ten times better economy for everyone.

The country already has a strong reputation as the leading international investment destination for US cybersecurity firms, with Belfast ranking

among the world’s top ten cities for Foreign Direct Investment (FDI). So, what’s the situation with female-led businesses?

Male-dominated Entrepreneurial Landscape

Despite the international reputation enjoyed by Northern Ireland, an overwhelming majority of companies are still led by males. Specifically, men run 65.1% of businesses, women own 13.5%, and the remainder is mixed leadership.

What sticks out, in particular, is a glaring imbalance between male and female-led high-growth ventures, with male firms overwhelmingly dominating these sectors.

Female and Mixed Leadership Companies Grow Faster

Perhaps one of the most interesting findings is that female-led and mixed leadership in small and large firms have grown faster than their male counterparts. However, only 0.17% of Northern Ireland’s companies were deemed to be achieving high growth.

In addition, out of these businesses, 77.7% were led by men, and only 9.8% by women (mixed-gender entrepreneurs founded the rest).

Northern Ireland Has the Lowest Investment in Women-led Enterprises

When it comes to raising additional capital, female-owned businesses attracted only 8.8% of total investment compared to 10.8% in Scotland, 12.0% in England and 12.0% in Wales. This regrettably illustrates the ongoing struggle for women to acquire investment capital.

Wrapping It Up

The Gender Index 2022 is the first attempt to capture the hard data and shed light on gender inequality in the UK’s businesses. Although certain parts of Britain, such as the London area, do show positive signs of improvement in female-led enterprises, as a whole, men still dominate the landscape and have better chances at raising funding.

At The 200 Billion Club, we want to challenge inequality and get female founders investment-ready with the help of our 12-week accelerator programme to prepare you for investment pitches and give you access to a network of investors looking for startups just like yours.

Want to find out more? Reach out to us today!
Source: The Gender Index 2022

Is Gender Inequality in Business Still Prominent? The Gender Index Report 2022

Gender inequality in business is about more than just the wage disparity between men and women; it’s also about female-led companies or their evident lack.

In the UK and worldwide, women continue to face barriers, such as problems accessing external funding, gender biases, skewed household dynamics, or a lack of support, when establishing businesses.

The Gender Index recently published a report that utilised AI-powered technologies to collate data from 4,412,017 active companies and 1,242 venture capital and private equity investors to reveal a deeper insight into the landscape of women in enterprise.

In this blog series, we bring you the key findings of the research and discuss the need to stimulate the growth of female-led enterprises.

The first article will concentrate on the data from England and Scotland, whereas the second part will cover Wales and Northern Ireland.

So, without further ado, let’s jump right in.

National Gender Index Results

We’ll begin with a glance at the national data before moving on to the nuances of each country.

According to the report, active female-led enterprises account for 16.8% of all UK businesses. Interestingly, in 2021 one-fifth of newly established companies were female-led, which shows that the gap could be slowly narrowing, but it’s still not enough.

The most apparent inequality across the UK exists in high-growth companies. These include FinTech, digital security, financial services, property and land development, and medical instrumentation.

Strikingly, there are clear tendencies when it comes to business funding. The majority of investment in the UK goes to male-led enterprises (66.1%), with just 11.9% going to female-led companies, and the rest flowing to mixed-leadership businesses. Furthermore, the angel is the most common type of investment in women’s startups, with female angels being more inclined to invest in fellow women entrepreneurs.

Finally, the leadership composition in the UK greatly varies depending on the sector. Male-led companies dominate most industries; however, female leadership is more pronounced in the health, wellbeing, social care, and education sectors. This might be explained in part by the large proportion of female professionals in these fields, or by the overall skewed perception that women are better suitable than males in these sectors.

Findings for England

Data obtained for England demonstrates that out of all the nations within the UK, it has the highest percentage of female-led businesses.

Stark Differences Within Regions

Nevertheless, there are some evident disparities between different parts of the country. Illustratively, statistics reveal that London (18.3%) and the South East (16.8%) have the most female-led enterprises, whereas Yorkshire and the Humber (15.6%) and the North East have the least (15.3%). 

Evidently, in the northern regions of England, in several high-value-added industries, women-led enterprises remain underrepresented. This could be partially attributed to the widening north-south divide, with more government investment flowing into the London metropolitan area.

Below-Average Female Representation in Tech and Finance

Women in the technology and finance industries face numerous obstacles; the lack of diversity and bias makes success in these fields challenging.

According to data, only 9.1% of women lead financial services firms and 12.2% run tech and communications enterprises. Consequently, this limits a country’s ability to lead innovations and generate higher revenues through a diverse workforce.

What’s the Situation in Scotland?

Relative to the UK average (16.9%), Scotland has a slightly lower rate of female-led businesses (15.4%). Strikingly, Scottish data reveals that female-led high-growth enterprises are more widespread in Scotland (12 %) than in the rest of the UK (8.7%).

However, the Gender Index reveals that raising capital in Scotland is more challenging than in the rest of the UK. Out of 34,385 women-led companies, only 6,980 (3.1%) attracted external investment, potentially limiting their growth potential.

In Scotland, specific industries, such as arts, entertainment, recreation, education, and health and wellbeing, seem reasonably well represented compared to the rest of Britain. Nonetheless, finance is one of the industries where female-led high-growth enterprises are either absent or present in minimal numbers, which reveals a grim situation for Scotland.

We’re Prepared to Help You Challenge the Status Quo

The 200 Billion Club believes we’re still far from a fair representation of women in business. Our goal is to help female founders secure funding and achieve their full potential by breaking stereotypes and stigmas. 

Do you want to learn more about our expert-led 12-week programme for women founders, which teaches how to pitch effectively, negotiate powerfully, and put your business in the best position for funding success?

Contact us today for more information.

What every female entrepreneur needs to know about pitching themselves

Although not all startup founders seek external financing to grow their business, those who do are well aware of the difficulties of the pitching process.

Raising funding for female founders is even more daunting than for their male counterparts due to prevailing stigmas around women making big moves in business. Only 1% of early-stage capital flows into enterprises started by women.

You hear lots of “no’s”, venture capitalists are not impressed, the opportunity is not big enough, or it’s too early for them to invest.

However, rejection often comes because you don’t sell yourself enough during your pitch. In other words, VCs aren’t convinced you have a clear vision, ambition, and/or the right attributes to execute and lead your business.

This article discusses the importance of pitching confidently to present yourself and your business as an investable and worthwhile opportunity.

We see the most incredible women in our cohorts, whose achievements in both their business and personal lives are outstanding, yet they’re resistant to sharing these achievements boldly and loudly. It’s so important that as women we avoid underselling ourselves and get comfortable talking about what we’ve accomplished as well as our vision for what we’re building.

Investors First Invest in People, Then Business

Many entrepreneurs go to their pitches armed with numbers, financial forecasts, and other factual data about their business model. Of course, hard data and a robust product are essential elements, but who you are and how you present yourself can play a more significant part than you think.

At this stage, VCs are looking to invest in people (i.e., the founder and the team) rather than the product. Your product hasn’t been put through its paces enough, so it’s too early to determine whether it’ll be a success.

Therefore, many investors judge you and your team “by the emotion and confidence” that you instil. Are you and your team capable of turning the company into a success story? Do you have the set of skills and expertise required to grow your endeavour? 

Investors are counting on you and your employees to provide a positive return on their investment. For this reason, they want to see devoted and passionate entrepreneurs fully committed to the idea.

How to Sell Yourself During a Funding Pitch?

Demonstrate Confidence

Founder confidence can make or break your pitch. Many female entrepreneurs are more reserved than male business owners regarding certain parts of the pitching process, such as projections on ROI.

Women frequently undervalue themselves and highlight modest returns, which may be less appealing to investors seeking big wins. Furthermore, they tend to be more careful not to oversell their idea, which can be read as a signal of low confidence. 

A winning business pitch should be a confident one where you demonstrate strong ambition and determination to lead the venture through its highs and lows. 

It’s imperative to remember that, as a founder, you are the most valuable asset, so don’t shy away from clearly articulating your skills and experiences and why you’re the best person to lead. 

Above all, investors will always back a founder who has a solid grasp of her product and target market’s pain points while balancing it with strong leadership skills and the ability to grow from setbacks. They want to invest in a well-rounded entrepreneur, so prove that you’re the one!

You Need to Emanate Passion

Investors have no idea who you are or whether you have the drive to build the business, you’re pitching. However, they want to work with someone passionate about the endeavour, its mission, and the team responsible for making things happen.

What’s the best way to get it done? Make your pitch memorable so it leaves a lasting impression on the investors.

But sometimes, portraying passion can be challenging; thus, ensuring how you come across to investors and what visual information you’re communicating is critical.

A study by University College London found that to boost your chances of delivering a winning pitch, you must focus on visual signs, such as your body language, gestures, facial expressions, and visible passion. 

Such visual cues can often be more powerful than your pitch deck, so you must learn to leverage them to your advantage.

Show You Can Execute

If your business is in the early stages, you don’t have a viable product or the most robust strategy, but you can still nail your pitch.

Investors are not only looking for a unique business idea but also for solid abilities to execute your go-to-market plan. In the beginning, there might not be enough factual data to judge you on, so investors make a bet on you as a person and how you make them feel.

Do you come across as someone who can execute the idea and penetrate the market? Have you refined your vision and goals and know exactly how to get there?

You must present yourself as someone who leads with action and doesn’t play safe.

The Bottom Line: You Need to Find the Balance

Successfully pitching your business to investors is about marketing yourself with confidence and passion while having an in-depth knowledge of your product and the market.

At The 200 Billion Club, we understand that women have a small chance of getting funding because of unconscious biases and gendered assumptions in a male-dominated venture capital industry. We offer a bespoke 12-week programme for high-potential female founders to equip you with strong negotiating and persuasion skills to help you land an investment.

Reach out today for more information.