What I'd Tell Women Of Color To Do To Get VC Funding

One of the most memorable episodes for me of How I Built This With Guy Raz is the 2019 interview of Katrina Lake, the founder of Stitch Fix. A large portion of the interview centers around Katrina's struggle to raise capital for the company.

Though Katrina had an impressive educational background, resume, and experience in venture capital, she estimated that at least 50 venture capitalist firms rejected Stitch Fix before she could secure funding.

When Guy Raz asked why, Katrina noted that Stitch Fix, a subscription box company where stylists curate clothing for consumers, was extremely new at the time and required inventory. Apparently, venture capitalists hate the idea of owning inventory.

But, I was more interested in the gender bias Katrina discussed. Venture capitalists rarely invested in female or minority-founded companies. That trend continues today, with female and minority-founded companies only receiving about 2% of venture dollars annually.

The bias is so entrenched that I often joke with friends that I know the cheat code to getting venture capital investment. This code virtually guarantees you will get the money you need. Want to know what it is?

Step 1. Find a young white male currently (or formerly) enrolled at any of the following schools—Harvard, Yale, M.I.T., Standford, or Columbia. Other acceptable but not as desirable schools are all other Ivy League schools and Oxford. (Please Note: The young white male doesn't have to graduate from any of these schools but must have attended enough classes to call himself a former student.)

Step 2. You can't find just any white male. This white male must be odd. Perhaps he walks around New York City barefoot. (See, e.g., WeWork's founder) Maybe he adopts a weird voice and dresses like Steve Jobs. (See, e.g., Theranos' founder) Perhaps he plays video games during press interviews and important meetings with dignitaries. (See, e.g., FTX's founder)

Whatever the peculiarity, this male must have a "deep" reason for it, which essentially boils down to, "the traditional way doesn't make sense to me." As in, "the traditional way of opening a door doesn't make sense to me. It's much more efficient to open it with my feet."

Step 3. The white male must generally look unkept, like he slept in the clothes and doesn't own a brush or a comb.

Step 4. His executive team consists of his other equally young friends from Harvard, Yale, M.I.T., Standford, Columbia, or the other Ivys. Those friends do not have to be white or male, but no one on the team can have any experience in the key positions they hold at the company. Additionally, no one can consult experts in the field to learn how to do those roles well. 

Step 5. The founder's business idea can't be fully formed in a way that anyone other than the founder and his friends can truly understand, but it sounds exciting. It involves math.

Step 6. Despite all these things, the founder feels 100% confident in asking any potential investor who will listen for astronomical sums of money. And he gets it—almost every single time.

This essay is about money - but as women of color, we’re always thinking about generational wealth. The path there starts with you and your decision to go after it. I help my clients realize that even if they make the wrong choice, they can survive it. Our work starts with a confidential Decision Hour. Book yours here.

I've been thinking more and more about this cheat code as the trial of Sam Bankman Fried enters its fourth week.

I wonder what innovations we miss out on due to biases and the lack of investment in people who actually seem to be qualified to run their companies.

I wonder how our world might change if America stopped assuming that only one gender, race, and class can change our world for the better and generate a profit.

I wonder what would happen if, in light of the suffering going on around the world, America put its discriminatory beliefs aside and let everyone have a seat at the table. For once.

Could we cure cancer?

Solve homelessness?

Live up to the ideals in our Constitution?

Elect a Speaker of the House so we can vote on aid and programs to help those most vulnerable?

I don't have any answers to those questions or new perspectives to share. I just know that I am still working for things to change, and sometimes that work gets exhausting. 

Today, I am exhausted. But I won't give up if you don't.

Your moment of Zen — Me and my lovebug at the beach.

In power and solidarity,

Toya