The venture capital industry needs to look more seriously at female representation in their teams as it would allow them to better understand female founders and make them more comfortable making investment callssays Ayushi Gudwani, Founder and CEO, FS Life (formerly Fablestreet).
“There is definitely a need for more women in the venture capital industry so that women can get fair representation in funding as well. Also, as more female founders see success, more VCs will warm to female founders. Male VCs should also try to spend more time with female founders (even those they haven’t invested in) to understand them better,” Gudwani said in an interview for DealStreetAsia’s Female Founders Report 2022.
According to Gudwani, the whole trail of less visibility for women starts in the early days of their careers, when there are fewer women in the workplace to begin with. “As we see more women in the senior leadership space, we will see more female founders come in who will find it much easier to raise money.”
Founded in September 2016 by Gudwani, FS Life was initially started with a single brand, FableStreet. Last year, it transitioned into a house of brands with the launch of Pink Fort, an Indian-fusion clothing brand; and Mikoto, a sterling silver jewelry brand.
FS Life had raised about $6.1 million in its pre-series B funding round led by Fireside Ventures last September.
What made you become an entrepreneur? How would you describe your entrepreneurial journey so far?
My entrepreneurial journey began when I struggled to find well-fitting and comfortable western workwear in the Indian market. When I started digging deeper into the issue of size and fit, I realized that most Indian women were settling for sub-optimal fits as hardly any brands gave them the right fits. After extensive evaluation of the women’s workwear category and self measurements of 200 women, FableStreet (now FS Life) was launched in September 2016.
My journey so far has been amazing. As a company, we have grown 10x in the last few years and transformed from being a single brand to a house of brands. Furthermore, we have been able to add brilliant talent to our FS Life family and have also deployed three brand ambassadors.
What are some of the biggest challenges you’ve faced as a female founder? How did you overcome them?
An entrepreneur is a person who creates a new business and huge growth opportunities. Although there are countless challenges along the way, I do not believe that my challenges had anything to do with my gender. My background is solid enough for a lot of investors and other stakeholders, which has allowed me to have enough support on the journey. I understand that it may not be the same for everyone.
What challenges did you encounter during fundraising? Did you encounter implicit or explicit gender bias while raising capital?
Although there have been several discussions surrounding the preference of investors for male entrepreneurs, I have been fortunate enough not to face any implications whatsoever. In addition, my profile has been stronger than many of my male colleagues in the industry, which became a catalyst for the company’s growth trajectory.
Do you think investors tend to have different expectations or standards for female founders versus male founders?
I believe times have changed and gender roles have become minimal when pitching your business to an investor. Prejudice may exist at some point; however, it has become easier for female entrepreneurs to pitch than it was ten years ago. The notion that women are not good leaders is gradually disappearing. Whether you’re a man or a woman, investors are now more interested in knowing how prepared you are, how deeply you’ve thought about the problem you want to solve, and your planning and growth strategy. Being a female entrepreneur sometimes gives an advantage over male counterparts, along with being a leader with the right mind and guidance, women tend to resonate emotionally with employees as well.
What are some of the potential causes of the gender gap in venture funding and how do you think these can be addressed?
The gender gap in venture funding comes from inherent gaps at multiple levels. If you look deeply at the founders who are funded, you will discover that a large number have previously been managers at other startups. And this is where women have a very low representation. The whole trail of less visibility for women starts in the early days of their careers, when there are fewer women in the workplace, to begin with. As we see more women in the upper management space, we will see more female founders come in who will find it much easier to raise money.
I believe that even the venture capital industry needs to look more seriously at female representation in their teams as it would allow them to understand female founders better and thus be more comfortable making investment calls.
In the current environment where funding will be harder to secure for most startups, might female founders find it harder to raise capital?
I don’t think the current environment will specifically affect women/men differently. Investors will follow the same yardstick to look at a company, so any drop in funding that happens should be proportional. In fact, women may have an advantage, as female founders have historically raised less money, so they’ve focused on building businesses that are sound on fundamentals rather than aggressively pursuing growth at all costs. In today’s day and age, strong fundamentals are all investors want.
What advice would you give to other female entrepreneurs?
Follow your dreams. Whatever you want to do, your goal should be to be the most knowledgeable person in the field. The more in-depth you know about your business, the better you will do it. Don’t let perceived bias against women bother you, you can’t control that. You have to do the best you can and work with people who respect you for what you bring to the table.
How can we work to change the culture and mindset of the venture capital industry to be more inclusive and supportive of female founders?
There is definitely a need for more women in the venture capital industry for women to have fair representation in funding as well. Also, as more female founders see success, more VCs will warm to female founders. Male VCs should also try to spend more time with female founders (even those they haven’t invested in) to understand them better.
What do you think are some of the most important factors that investors should consider when evaluating a startup, regardless of the gender of the founder?
I believe the three factors that make a company/founder investable are clarity of thought, market size and execution plan.