• Thu, Sep 8 2011

Do Investors Think Entrepreneurs Will Kill Their Companies When They Get Pregnant?

“My financial adviser is concerned that if one of you gets married or has a baby, the company will get pushed to the sidelines.”

This was said to Monica Murphy, co-founder of the shoe company SoleMates, by a potential investor who she and her co-founder, Becca Brown, had spoken with for weeks. He had been very enthusiastic about their new company, until he talked to his financial adviser. “It was certainly insulting and eye-opening. But in some ways, he probably just lacked the tact to say what a lot of people (men and women, maybe) may have initially been thinking at the time.”

Monica is right in that many men and women may be more hesitant to work with a female entrepreneur, especially one heading into her prime child-bearing years, than a male one. Of course, we have been over the fact that many employers are reluctant to promote or sometimes even hire women during those child-bearing years but it seems that the issue is amplified when investors are considering putting thousands of dollars or more into a company run by a woman or women. This mindset is one of the contributing factors to data that shows that women start ventures with eight times less funding than their male counterparts and only three of the 95 venture capitalists on the 7/19 list of “Top VCs” were women, according to TheFunded.

In an entrepreneur advice blog post from Paul Graham, investor and co-founder of Y Combinator, he said the ingredients for success were a great idea, great people and a product that customers actually want. He also added in a footnote at the bottom of the post that because start-ups have more freedom when it comes to discrimination of hiring people than a corporation, he advised against working on a start-up with women with young children.

Paige Craig, the co-founder of BetterWorks and an angel investor, said he felt horrible for thinking, “A pregnant founder / CEO is going to fail her company.” He had this thought after finding out the co-founder of a company he was considering investing in was pregnant. He wrote in a blog post:

“The founding team, Jessica Jackley and Dana Mauriello, are incredible ladies with exactly the spirit and attitude I’m looking for in founders. We’ve talked extensively, had lunch together and I saw first hand the amazing talent & drive these two bring to the table. And then, a week later I find out Jessica is pregnant…and this dirty little thought pops in my head. I’m thinking how in the hell is this founder going to lead a team, build a company and change the world for these businesses carrying a kid around for the next few months and then caring for the kids after. I can’t say I personally know anything about it but birthing & raising kids seems like the toughest job around. And now I have a founder who has to be a CEO and a mother.”

Paige did end up investing in the company but he worried that if he, a man who thinks of himself as an equal opportunity employer and wishes there were more female entrepreneurs, then what was everyone else thinking?

I have quite a few female entrepreneurs in my portfolio companies but the reality here is that I almost didn’t invest and I’m sure a ton of us decide not to invest, support, promote or work with women because of this whole “marriage / pregnancy” hurdle that most women will face in their career. I normally tell people I don’t care about your sex, race, religion, sexual preference – these things just don’t mean a bag of dogshit to me.

Yet, I almost didn’t invest so it must mean something and I’m definitely not as equal opportunity as I thought. And even though I ultimately decided to support Jessica and Dana, there are a ton of Jessica’s out there that won’t get the same treatment.

As he said, there are probably many investors who have these thoughts when considering investing with a female-run start-up. However, female entrepreneurs are trying to make a point that the choice between being a good parent and being a good start-up founder does not exist. Cindy Alvarez, head of Product for KISSmetrics, wrote:

“As someone who joined a startup at 5.5 months pregnant, worked up until three days before giving birth, and came back full-time six weeks later, I would question the assumption that your co-founder will somehow become incompetent due to childbearing. “Working smart” is the new “working long”, and nothing makes you ruthlessly prioritize like having a baby.”

Some female entrepreneurs thinks having a baby even makes you better at running a start-up.  Tereza Nemessanyi, Co-Founder & CEO of Honestly Now, wrote:

“Parenting creates a laser focus that you didn’t have before. Through parenting I have learned to operate at a totally different capacity. I don’t hesitate to say what I think, because there is not time to do business any other way. Who has time to screw around? Frankly you hear so little from us because we don’t have time to linger on chat boards.”

It is possible to do both and it is possible to do both well and investors should know this, not that women should automatically think having a baby directly correlates with them running a successful start-up. But the point is a woman’s choice to have a child at a time in her career when she is fund-raising for her start-up should not be looked at a handicap or something that would make her less capable as a businesswoman. As Zuhairah Scott Washington, the founder and CEO of  Kahnoodle, wrote, “My current aspirations? To become a successful entrepreneur, wife and mother.  Do I think it will be easy? No. Do I know that it is possible?  Absolutely! That’s because I know something about women many men don’t – that we are much, much stronger and resilient than you (or sometimes even we) think.”

Photo: stefanolunardi/Shutterstock.com

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