I was fascinated by the article entitled "Money matters: why women struggle in the Silicon Valley" in part, because it's an inside look into what women founders really do/encounter and for so long has largely been kept secret.
Investors use pattern recognition — they believe that by investing in teams/products similar to past successes, they'll have a greater probability of success. There isn't anything inherently wrong with that, but I do believe it makes it harder for teams who don't fit those "proven patterns." (e.g. women, certain races, certain ages, certain skillsets, certain lifestyles, etc) As a result, several things follow:
1) If you don't fit a "proven pattern", you'll occasionally hear shocking things while fundraising, and you may walk away wondering how many other investors are thinking those same things but not saying them outloud. In the above article, what the associate said to Kathryn was rude and shocking but not altogether surprising to me. From my own fundraising experience, someone I pitched called me a "meek Asian woman" and questioned how I would possibly ever be able to lead a team of 100+. If I had had that written to me in an email, I would've totally tweeted out that sh*t. But, instead, it's not worthwhile for me to call him out since this angel is actually nobody you would've heard of, and it's also his word against mine. But, if I were in Kathryn's shoes, I would totally blast out that guy/firm since she has it in writing.
But pattern recognition goes beyond gender. I have a friend who pitched an investor who said, "You didn't graduate from an Ivy or Stanford so I don't know how you'll grow your company." My friend's response was "Oh yeah? Watch me b*tch" and walked out the door.
2) The flip side is that those who don't fit "proven patterns," try to combat this by doing as much as they can to fit in. I have a friend, a female CTO startup founder, who would get into big discussions with her male co-founder about what she was going to wear to a pitch meeting. They argued about whether she should dress more masculine (because she was the CTO, and most CTOs today are men) or dress more feminine (because that would be more appealing to mostly male investors). They discussed whether she should get fake glasses (she has perfect vision) so that she would look more geeky.
In my own experience, I have data to suggest that certain outfits I wear are more successful than others. I've been meaning to write a data-based blog post as a part II to my blog post above, but I just haven't had the time to make the charts and graphs yet. Sneak preview: for our seed round, my wearing shorter skirts worked better than pants. I'm partially embarrassed that I know this, but once you see your own fundraising-success correlations, of course you're going to try to milk it for all it's worth, right?
There are other things that are a bit harder to mask. When we were fundraising, my co-founder was about 9 months pregnant — literally on the verge of going into labor. Having read Paige Craig's post on almost not funding founder Jessica Jackley because she was pregnant, this was a topic that was top of mind. I figured that at least some investors must have a terrible fear of women getting pregnant. As a woman (though I'm not a mom), I have to say this is one of the most ludicrous thoughts that some male investors seem to have. Yes, it takes a lot of planning to figure out how to juggle children (in my co-founder's case, she and her husband lived with her parents who took care of her kid for over a year). But, I don't know of any female founders who woke up one morning thinking, "You know what. I give up on this company-thing. I want to just stay at home." Don't get me wrong — I do think it's probably harder to juggle younger children as a female founder, because just physically-speaking, you have to do things like give birth, recover from that, breast-feed, etc. But, I think women-founders who want to be parents think very deeply about all of this and create plans to enable them to work hard on their startup. They are not just willy-nilly having children.
But I digress. For our round, Jennifer and I decided that she would not go to fundraising meetings unless absolutely necessary. With the exception of 500Startups (and @andrewchen), no one else in our round knew at the time that she was pregnant (well, there may have been some ppl who saw her at Demo Day). The flip side is that 100% of investors who asked to meet with both of us, declined to invest. I don't know if they declined because she was clearly pregnant or whether they just didn't like something about us/our business. I'll never know, but that's what the data shows. What is interesting, though, is that one investor kept asking us throughout that process how Jennifer's labor was going and whether she was back to work. Jennifer was back to work within 2 weeks of giving birth, and he was surprised. (I don't know if he was asking just because he cared or because he was curious how we were handling the situation) Though his VC firm passed, he came in as an angel investor. So, perhaps we were able to use this disadvantage to an advantage. I'm not really sure.
Another female friend of mine was fundraising around the same time. Unlike us, she was a successful female founder who sold her prior company for hundreds of millions of dollars. But, she was also 6 months pregnant with her first child. To mask her pregnancy, she wore baggy clothes and leaned over a lot during her pitch meetings. She confided that she was pregnant to one investor, though. And, his reaction was, "I'm pulling out of your round. You'll just want to stay at home all day after you give birth." And, she explained her plans for childcare, to which the investor responded, "Well, I don't believe you. My wife just wanted to stay at home after our first child." Obviously a ludicrous argument, because VC wives are not typically out pitching to have their startups funded. But, it was very telling to me what some investors (or perhaps many) think.
In short, between the wardrobe decisions, the pregnancy-cover ups, etc, entrepreneurs, as much as possible, try to combat pattern recognition with pattern recognition.
3) Then there's the little comments. The problem is that these little comments in themselves are not bad/wrong. But, over time, they reinforce the environment that startups are built by "White (now also Asian), male hackers." When Jennifer and I would go to startup events a few years ago and people would ask us who built our site, we would be confused. We built our own sites. And the reaction would always be "Wow, you wrote the code and everything?" Of course we wrote the code — we're the only people on our team — who else would write it? The first couple of times this happened, I didn't understand why people were asking such dumb questions. But, after a while, it dawned on me that perhaps people didn't think we could code? The thing is I'm not sure if people were just thinking "Wow, you wrote the code" because they really liked our sites (doubtful) or "Wow" because they didn't think women could code? I have no idea, and I wish I'd asked. These days I half joke, "Oh, why do you ask? Because we don't look like we can code, haha?" And, that always makes people uncomfortable and then come up with some lame response and walk away. But I do think it's important to call people out on this. Make people feel a bit uncomfortable, because they may not even realize they have weird stereotypes going on in their heads, and this illuminates them for at least a few seconds. These little comments are not just about coding, though. I've been to startup events where it's been all men and me. And, people will think I'm the caterer or the event organizer (even as I'm scarfing down the food and drinking all the beer). And, just to be clear, there's nothing wrong with being a caterer or an event planner, but it reinforces to me that these stereotypes about what entrepreneurs look like definitely exist. It's gotten better — with more and more women starting companies, this happens less and less to me (or maybe I just go to fewer startup events now). It will change - it's a work in progress.
As ridiculous as much of the above may sound, at the end of the day, most female founders I know (myself included) are reluctant to share tales from our fundraising experiences. Frankly, we don't have any proof that investors who turned us down did so because we were women (or pregnant or whatnot). Fundraising, in general, is a hard activity for both men and women entrepreneurs. Yet, while I'm averse to speculation, I've decided that now's the time to illuminate at least the truth of what I do know some female entrepreneurs encounter during the fundraising process.