New report shares stories of the biases women entrepreneurs face raising capital

“He said, ‘well, don't you just want to go get married and have babies now? Why are you fundraising?’”

That women technology entrepreneurs must travel longer routes from startup to scale-up is a fact that resonates with Sampler founder and CEO Marie Chevrier Schwartz.

Chevrier Schwartz created her direct-to-consumer product sampling business in 2013, raising multiple rounds of seed capital for a number of years until she secured $3 million CAD in Series A funding in 2019.

“In Canada, I have unfortunately had pretty negative experiences fundraising, and … certainly gender-stereotyped.”

Since then, Chevrier Schwartz has grown Sampler into a company that works with customers like L’Oréal, Nestlé, Unilever, and Pepsi. The startup claims more than 950 customers in 19 countries, with a potential reach of over 80 million consumers.

According to the CEO, Chevrier Schwartz has also encountered numerous instances where she was underestimated or treated differently because of her gender.

“In Canada, I have unfortunately had pretty negative experiences fundraising, and … certainly gender-stereotyped.”

Chevrier Schwartz’s journey has not been an easy one, and the CEO is not alone. A recent study from the Conference Board of Canada found a number of differences between women and men entrepreneurs in the Canadian tech sector.

Most notably, women have a harder time raising capital. The study found that, compared to men, women reported it took longer to raise Series A financing, requiring more pitches to do so.

Interviewing 15 women and 15 men startup entrepreneurs, the Conference Board decided to undertake the study due to a lack of research that is focused on gender in Canadian tech.

“We saw some very interesting research emerging out of the U.S. that showed that in the world of scaling technology companies, companies led by women were outperforming companies led by men,” said Susan Black, CEO, of the Conference Board. “These studies were all quantitative; they didn’t shed light on why this might be the case.”

The Conference Board hopes that understanding the differences will lead to organizations devising better policies “so that access to capital is not skewed by misperceptions or bias.”

RELATED: New report on Canadian venture, private equity landscape shows firms failing when it comes to inclusion side of D&I

Chevrier Schwartz recalled to BetaKit one such experience in an investor meeting, shortly after she had become engaged, where a male investor saw her ring and asked her about it.

“Literally, word for word, he said, ‘well, don’t you just want to go get married and have babies now? Why are you fundraising?’” Chevrier Schwartz told BetaKit.

Chevrier Schwartz also recalled another experience where she was pitching her company to a boardroom of people alongside her chief product officer (CPO), who happened to be a man. The CPO was there to provide product details while Chevrier Schwartz was leading the rest of the pitch.

“I remember – this is a prominent Canadian VC – one of the partners looking away from me and turning to my chief product officer and [asking] … something about the financials, and directing the question to him.”

Sharing these types of experiences can often be difficult. Chevrier Schwartz told BetaKit that she has never publicly shared these stories before, but after growing her business and raising capital, feels able to share them now with fewer repercussions.

“It would not have felt comfortable for me to share years ago, because, frankly, if I did, it probably would have impacted my ability to fund the business then,” Sampler’s CEO said. “And that’s half the problem.”

RELATED: Tech sees progress in promoting women to executive roles, but still lags behind other sectors

Having secured another funding round in 2020 after seeing the pandemic massively accelerate her business, Chevrier Schwartz has the backing of StandUP Ventures, BDC Capital, EDC, and The51.

But the power dynamic is very different at the early stage, Chevrier Schwartz said during a panel hosted by the Conference Board last week. “We need to recognize that.”

Many women in Canadian tech face similar experiences to those shared by Chevrier Schwartz. The Conference Board survey also found differences in the way people of different genders pitch to investors, in addition to how those pitches are received. Issues with access to the same networks and pools of capital were also noted.

“I really hope that the research causes people to pause, to think about their biases.”

“While growing a business from an idea to a multi-million-dollar enterprise is an arduous challenge for both men and women, women identified a number of unique challenges and explicitly articulated the need for entrepreneurs to have “grit” and “resilience,” the survey reads.

The Conference Board found that when pitching their business to venture capitalists, women emphasized their business’ financial sustainability while men emphasized their business’ growth potential.

“If you’re on a panel with you and four guys, they ask all the other guys about, oh, their metrics and their growth strategies,” said one anonymized woman as part of the survey. “And then to you, it’s, “Oh, how do you take care of your people?” It’s like we always get like the touchy-feely questions, and all the guys get the hard questions.”

The survey also found that men founders reported being approached regularly by venture capital firms, while women founders reported “little proactive outreach,” with women more likely to initially self-fund their businesses, and men more likely to rely on angel investors, friends, and family.

“What stood out here was the fact that there is a lack of awareness on the part of many entrepreneurs about the availability of VC funding as a potential option, that, in many cases, women self-fund because they don’t have requisite knowledge about the funding available,” said Black.

Chevrier Schwartz herself recalled, during the Conference Board panel, not knowing about the availability of venture capital when she first started as an entrepreneur.

While women founders still face obvious challenges when looking to raise capital, some venture firms are starting to publicly speak about gender differences in investing. Inovia co-founder and partner, Shawn Abbott; Matt Golden, founder and managing partner of Golden Ventures; and Emily Walsh, a lead investor at Georgian, took part in the Conference Board panel and spoke to reviewing internal bias.

RELATED: An incomplete list of Canadian tech programs and organizations supporting women’s initiatives

Abbott noted that his firm has seen better results and returns after making an effort to create a more diverse team and portfolio in recent years. But he was also honest about how Inovia recently saw two different pitches – one from a man and one from a woman. Both, he said, had similar companies, but based on the way they pitched and what they shared about their metrics, Inovia was more excited about the man’s pitch. Abbott noted that the Inovia team later realized that and had discussions about whether there was an internalized bias that played into that idea’s thought process.

Walsh added that Georgian, with its focus on later-stage capital, doesn’t see a lot of pitches from women, estimating that only two out of 100 pitches will come from women.

There is always room for improvement. While Sampler has found investors to work with, Chevrier Schwartz notes that many of the firms on her cap table have theses that are focused on investing in women entrepreneurs.

“When you just kind of look at Canadian female-funded companies, how many of them have had to receive financing specifically tailored to women is a really good indicator of [the fact that] there’s a general funding problem for women,” said Chevrier Schwartz.

Sampler’s CEO hopes that sharing her story will make other women founders feel less alone as she noted that the Conference Board report did for her. Reading statements from people with similar experiences gave Chevrier Schwartz hope that women starting off their founding journies now will feel they can speak more openly about their experiences.

“I really hope that the research causes people to pause, to think about their biases, and we did discuss that during our session, that our own internal biases often get in our own way – and that applies to both funders as well as entrepreneurs,” said Black. “I hope shedding some light on the experiences of women entrepreneurs in Canada paves the way for other women entrepreneurs to step up to the challenge.”

Feature image courtesy Sampler.

Meagan Simpson

Meagan Simpson

Meagan is the Senior Editor for BetaKit. A tech writer that is super proud to showcase the Canadian tech scene. Background in almost every type of journalism from sports to politics. Podcast and Harry Potter nerd, photographer and crazy cat lady.

0 replies on “New report shares stories of the biases women entrepreneurs face raising capital”