Why VCs Aren’t Funding Women-led Startups - Knowledge@Wharton

knowledge.wharton.upenn.edu - What’s it like to be a female entrepreneur raising money in the male-dominated venture capital industry? It’s a question Kathryn Hays, the co-founder and CEO of venture-backed Vivoom, an ad tech startup, is often asked. Hays led her first startup, Massive Incorporated, a video game advertising company, through several rounds of funding, before eventually selling the company to Microsoft for a reported $200 million-$400 million.

“I am afraid I don’t have a very satisfying answer,” she says. “Usually I am the only woman in the room, but I have no idea how much of a disadvantage that is because I don’t know what it’s like to be a male looking for funding.”

She admits, though, she has given the matter some thought. “Male VCs — and obviously most are — are very comfortable now giving female entrepreneurs capital for ‘girl stuff,’” she says. “Want to rent dresses or sell baby wipes as a subscription? No problem. The VCs ask their wives or girlfriends if the idea is cool, and they’re good to go.”

But female founders pitching hard-core, proprietary technologies — Vivoom’s platform, for instance, renders Hollywood-quality video in the cloud for millions of mobile users at a time — face an altogether different dynamic, she says. “Sometimes I believe if I were a 21-year-old male in a hoodie, Vivoom would be even more appealing to VCs,” she notes.

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