The
second category is women who take a decade-long sabbatical from their
corporate careers to bear the mandatory two kids and a white picket
fence existence and then struggle to make a business out of their
hobbies—baking chocolates or making papier mache lamps, or running a day
care centre.
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The
third category is of those women who took no break in their corporate
careers, worked in large IT MNC’s in “the bay area”, and came back to
India either because “the girls are growing up” or because “my parents
are growing old”. Along with their husbands or friends or former
colleagues, they start a business, mostly in the internet space.
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In
all the three cases, the first round of investment is from father,
husband and own savings respectively. Let us say all three go to market
successfully and are convinced that they can scale the business. And in
order to do so, they need serious funding. So they approach venture
capitalists.
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How
do VCs treat this overture? In the first category, the VCs will be
somewhat indulgent. They may like her business idea and may even think
it has potential but they will not risk investing in it. The questions
that weigh against her are the following.
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What happens when she gets married?
This is a very loaded question with multiple layers. Her getting
married could mean moving to another location, it could mean husband
does not like the idea of his wife running a business, or expects her to
join an MNC and bring home beaucoup bucks, instead of spending time on
a yet-to-make-money start-up. How will she manage time between being
newly married, especially in India where you don’t just marry the guy
but his whole family? Or it could mean what happens if she gets pregnant
on her honeymoon? How will she manage the rigour of a first-time
pregnancy with that of an equally demanding start-up?
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What happens if she gets bored with the idea
(women apparently get more quickly bored than men)? This one is layered
too. She may get bored simply because she is fickle. Or she may get
bored because she is not seeing the magic numbers she expected. Or she
may get bored because husband is not as generous as dad when it comes to
shopping money! Or worse, she hardly has any time now to enjoy the
romance of a new coupling.
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What happens if marriage does not turn out to be the fairy tale that it was touted to be? Will
she be able to run the business when she’s on an emotional
roller-coaster in a soured marriage? Will her start-up be the first
casualty both because she is not ‘with it’ emotionally and because she
needs financial security now, so taking up a job makes better economic
sense?
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Interestingly,
all the reasons for not investing are to do with her being a woman and
nothing to do with the idea! So the VCs may suggest she get a couple of
good male co-founders to offset the churn created by her gender!
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In
the second category, the rejection is point blank and idea related, not
so much gender related. The VCs will tell her that her business idea is
not feasible to scale, and if scaled not profitable enough! Why?
Because she is messing around with a hobby and pretending to build a
business around it.
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In
the third category, the woman entrepreneur’s behaviour becomes the
show-stopper. She creates an excellent pitch and makes a kickass
presentation to the VC, she is extremely knowledgeable about her domain,
she knows who her customer is and she has all her resource requirement
pat down to the last penny for the next three years. The several rounds
of meetings go extremely well and on the day the term sheet has to be
discussed she develops cold feet and insists on bringing a husband or a
male friend to the table. Why? Because she thinks she will be
short-changed in the negotiation because she is a woman! That is when
the VCs develop cold feet and the deal is off the table.
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Moral
of the story? Entrepreneur first, woman next! There are a few women who
have beaten these odds, not just by having faith and conviction in
their business idea but by articulating it in no uncertain terms. So at
the deal table what the VCs see is not a woman but a consummate
entrepreneur.
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