What does it take to create the kinds of trusted relationships that eventually lead to funding, and what can founders do to make those relationships thrive? Three funders, Sara Christensen, Jenna Jackson, and Raina Kumra, recently sat down with a trio of startup founders at The Riveter West LA recently to talk shop. The first founder was Ana Pompa Alarcón Rawls, founder and CEO of findSisterhood.
The Context and Challenge: Growing as a leader who can keep up with growth while setting the stage for the next funding round.
Ana Pompa Alarcón Rawls knows the power of trust. Her startup, findSisterhood, is an anonymous social network for women to discuss issues that are deeply personal but often hard to talk about publicly. Anonymity, which may at first seem less authentic, is exactly what provides the safe space to open up about vulnerable topics such as sex, relationships and mental health without fear of judgment, taboo or competition. “We want women to feel safe to share anything on their mind with other women, get support, give feedback, and share wisdom,” says Rawls. “There are so many things that we still can’t talk about as a society, and especially as women. We are disrupting these conversations.”
Unlike other social networks and anonymous spaces, findSisterhood doesn’t collect any data on the identity of its users. Secondly, the app has community managers on the prowl 24/7 to prevent bullying. “We employ sentiment and content analysis to identify high traction discussions and connect users with brands and non-profits to inform and educate them in the best possible way,” said Rawls.
It’s striking a chord: Since launching in 2018, the findSisterhood community has expanded to 31 countries. As Rawls looks to manage that fast-paced growth as a first-time founder, she’s committed to being an exceptional leader and role model.
“I want to be a strong leader for my company as well as an ally for other Latinx founders. As investors, what qualities do you look for in founders?”
Sara Christensen, cofounder and partner in Per Capita Ventures, an investment vehicle created to support female-founded and -run businesses, initially compared the process to finding a mate for life — as in, it can be a long list! The first thing Christensen looks at is whether a founder has the experience and expertise to build a company. Second, she looks for the drive and discipline required to handle the unglamorous part of startup life. “Will a founder breathe, sleep and dream about their company?,” she asked. Third, she makes sure their values are aligned.
“Of course, when you meet a founder and they tell you their story, you look for authenticity,” she said. For Christensen, a good story is a nice-to-have, but a clearly defined opportunity and financial model are must-haves. “You need a founder to say ‘Here’s the problem, here’s the need, here’s the opportunity, here’s how I’m solving for it, and here’s how we are going to win,’” said Christensen. “That’s the short list of boxes to check.”
Jenna Jackson, managing director of Imperial Capital, has come to appreciate a founder’s ability to hire for their weakness. “I see a lot of founders who are controlling to the point of damaging their business,” said Jackson. “It’s impressive when a founder has the humility to say, ‘I’m the best person in the world at this, but this person is the best in the world at that, and I’m going to hire them and let go of that.’”
Rawls, who acknowledged the obstacles of raising money as a Latinx woman, expanded on her question, asking the funders, “How much time do you spend with a founder before you decide to invest?”
Christensen acknowledged that there are cases when an investor knows they are going to invest in somebody on the first meeting, but typically a funder wants to spend some time seeing if a founder is up to the task and has the team to fulfill their vision.
“Start raising money a long time before you actually need to raise money,” advised Christensen. “Build the relationship a year or six months out so when it does come time to raise, the conversation can go a lot quicker.”
Jackson agreed, “The worst thing you can do is hand an investor a deck and say ‘We want to close in two months.’”
“Due diligence on a deal with someone you trust and have known for 10 years and someone you have just met is very different,” she explained.
“I always look at the product testing, If the company is pre-product, I look at every mock-up and I want to meet the engineering team, because sometimes there isn’t one!”
Raina Kumra, early-stage investor & CEO of Juggernaut, encouraged Rawls to connect with the Latinx investor community to participate in movement-building early on. “It starts grassroots,” she explained.
“Systemic change is very hard. I’ve been on all sides. I’ve been the only woman in the room and I’ve been the only brown woman in the room, many, many times. At the same time, you don’t always get funding from the places you think you will, so talk to everyone about it.”
The Context and Challenge: Getting warm introductions to funders as a woman of color in the cannabis space.
As Whitney Beatty discovered the legitimate benefits of cannabis on a personal level, she become increasingly frustrated with the lack of appropriate storage and care for it. “The easiest way to describe my offering is that people keep wine in wine fridges, they keep liquor in bars, and they keep cigars in humidors,” said Beatty. “But most people hide cannabis in a shoe box underneath their bed.” Beatty set out to provide a solution with Apothecarry, a 3-year-old cannabis storage startup.
Before she was CEO of Apothecarry, Beatty was building a successful career in TV and film — until one day at work when she had an anxiety attack. The experience stopped her in her Type A tracks. “I had gone after everything I had ever wanted in life,” she said. “So I went on mission to fix the problem.”
After several prescription-based attempts to reduce her anxiety didn’t work, a doctor suggested cannabis. Beatty was hesitant at first. “I didn’t have a connection to the cannabis space at all,” she said. But she did the research and was convinced. “I was happy with what the plant was doing for me healthwise, I was upset with the stigma of it,” she said.
With both a child and a dog at home, she wanted a safe environment. Since she wasn’t using cannabis every day, it dried out. There were a lot of accessories. Beatty also sought a better way to share cannabis with her friends. “I thought it deserved more attention and respect, so I did what any entrepreneur does,” said Beatty. “I did my research, I quit my job, I sold my house, and I started my company as a single mother to a small child.” Beatty built her MVP, graduated from a business accelerator, and raised a seed round of $50K.
Now Beatty is raising more money. “I don’t have friendships with people who have a lot of money lying around,” said Beatty. “I did a friends-and-family round and raised $30K, and that was $30K from people who gave me all that they could give me.” She also experiences barriers as a founder of color in the cannabis space. “Everyone here is aware that women aren’t getting the money from VCs we should,” said Beatty. “And I don’t know if anyone has noticed, but I have been a black woman my whole life, which makes it even harder to raise money.”
“I feel like I’m throwing introductions into the ether because I’m sending blind emails and not getting any responses. What is the best way for me to approach people in order to have them at least listen to this opportunity?”
Jackson suggested tapping into both formal groups of investors, such as the Female Founders Network, All Raise, 37 Angels, as well as informal pockets of angel investors: “Women who write checks get a lot of decks and often share decks with a friend. When you make a connection you can say, ‘I’d like to send you my deck and if it’s not right for you, would you do me a favor and send it to someone that would be great for it?’”
Another strategy is to research investors who have put money into adjacent products. “At least you will know that even if it’s a cold email, you’re emailing someone who is interested in investing in the cannabis space.”
Kumra shared the adage, “Ask for money, get advice. Ask for advice, get money,” That’s what happened when she met a connection for advice on her mobile startup, Mavin, “Sometimes having a conversation when it is not structured around a financial ask is an easier conversation,” she explained.
Christensen pointed out the advantage to being in a hot category: “There’s a lot of press around it right now, so you can see who’s involved.”
Christensen added some tough but inspiring advice for the founders: It’s a brutal job to get people to write that check. She shared the story of a successful founder she helped fund who got 278 nos before the first yes: “She just wrote and wrote and called and called and wrote and wrote.”
“You can’t give up if this is what you want to do and you love it and you believe in it. You just have to find support groups who are going to help you get there.”
The Context and Challenge
CEO and founder Tabitha Sorensen started Party Dash to take the pain out of planning children’s birthday parties. Sorensen had always enjoyed planning parties and initially began throwing themed parties for coworkers’ first babies and her friends’ kids’ birthdays for fun. She quickly found the product design underwhelming and the process tedious, especially as she was working 70 hours a week at a tech company. Sensing that other people shared her frustration, she started creating products and selling them on Amazon, chalking up $250M in sales. That gave her the confidence to quit her job and go after the $11M category.
Sorensen’s research found that parents visit between three and six stores when planning a child’s party — and once they get to the store, the experience is often chaotic. This confirmed her plan to build a platform offering original designs from award-winning designers and a curated selection of beautiful products that are shipped directly to the home. “You don’t have to guess if your selections from Amazon, Target and Party City will all go together,” said Sorensen. “Party Dash will turn a process that could take up to twelve hours into something that could be done in ten minutes, giving parents peace of mind and time back.”
As Sorensen gets ready to launch, she’s heard the advice to ‘get shit out there and see what sticks’ as a marketer in the tech space, and grapples with how that applies to consumer products.
“What is your take on the ‘go fast and break things’ model versus ‘move slow and get it right’? How should I think about this as a consumer-focused company where you only have one opportunity to go to market and build that first impression with your customers?”
Christensen shared perspective both as a funder and as a cofounder of Liquiteria, a pressed juicery in New York City. “I don’t how many birthday parties some tech founders have thrown, but when a mom has a bad shopping experience, she’s not going back.” she said. “I always say that if it’s worth doing it is worth doing right.”
Jackson agreed that what works for software doesn’t work for consumer.
“You want people to use Party Dash and use it many times,” advised Jackson. “That experience has to be great. It has to be seamless and easy if you want that mom to say ‘I’m never going to use anything else again.’ If it’s a disaster she is telling everyone in her preschool class and they are telling their friends and suddenly you’re not shipping anything anytime soon.”
As a funder, she looks at the customer experience very closely, interrogating return rates and the returning customer rate to assess loyalty. “Investors will want to make sure that your brand is the one they think of first,” she said. She encouraged Sorensen to prototype experiences and focus on rapid feedback and exceptional customer support.
Kumra suggested launching a decoy brand to test the proposition in a smaller market. “You can see how that is going and work out all the kinks without spending a lot more money before you take it to launch,” she said.
Christina Vuleta runs Break The Future, a consultancy focused on brand and product strategy that positions companies for growth. As part of this, she leads Venturing Salons, a conversation series designed to help women founders move their ventures forward. Previously she was the VP, Women’s Digital Network at Forbes Media, where she relaunched the women’s channel as a business-first platform for entrepreneurial women. Prior to Forbes, she built her own strategy consultancy while running 40:20 Vision, a resource for women to facilitate wisdom exchange and the 40 Women to Watch Over 40 list. She began her career at Saatchi & Saatchi Advertising and went on to work at Faith Popcorn’s Brain Reserve, KBP+S, Fahrenheit 212 and The Futures Company. She’s an advisor to the fine jewelry e-commerce platform, MEMO, and messy.fm, a full-stack podcast production platform, and is a mentor for Backstage Capital.