Starting a business and raising capital? It’s no small feat and five founders — ranging from the entrepreneurs behind Honest Co. to One Kings Lane and Gilt Groupe — sat onstage to share their experiences building their companies in a conversation focused on female entrepreneurship, mentors and raising capital during the Milken Institute Global Conference in Beverly Hills.
The speakers on Tuesday’s panel included Jessica Alba of Honest Co., One Kings Lane cofounder Susan Feldman, Sheila Lirio Marcelo of Care.com, Glamsquad and Gilt cofounder Alexandra Wilkis Wilson and Love Home Swap’s Debbie Wosskow.
For Alba, female mentors were few and far between with the Honest chief creative officer saying she turned to Tory Burch for pointers on the business world from learning what happens at board meetings to implications of raising capital.
Alba said she struggled for three years getting investors on board and trying to persuade serial entrepreneur Brian Lee to sign on as a cofounder. But said her own experiences being a first-time mom was enough to keep her going with her idea.
“I didn’t know how to leave the house in under an hour. I was always missing something, going back and then it was time to feed again and then [the baby’s] diaper,” she said. “It was stressful and so I just wanted the convenience of getting it delivered straight to your door and the essential items you need to clean your home, clean your kid, clean yourself and diaper your kid. And so that’s where the Honest Co. came from.”
The panel’s discussion inevitably — with CrossCut Ventures cofounder and managing director Rick Smith moderating the talk — found its way to the subject of seeking outside investment in the male-dominated venture capital world.
One out of 12 Series A deals had female founders last year, Smith told the crowd.
“When we talk about unicorns in our business being companies with the billion dollar valuations, these [panelists] are the real unicorns in our industry, successful women who founded companies of note,” he said.
Much of that segment of the conversation focused on the uphill battle in getting male investors to understand a service or product geared toward women and just how those ideas fill actual white space in the marketplace.
“I think that there are a few challenges,” Wilkis Wilson said. “One is that it is an old boys network and it is improving and it is changing, but I think from an investor perspective, many investors that I know are typically going to invest in companies and industries that they inherently understand, that they’re inherently passionate about where they can also add potentially strategic value. And it’s harder for a man to do that in a female-focused company, which is just a reality — and that’s OK.”
She recalled walking investors through a deck for Gilt and recalls one male investor who refused to believe women pay $500 for shoes. “Of all the things he could have been shaking his head about,” Wilkis Wilson said of that experience. There was also the one investor who struggled to understand a blowout and how a woman could be getting that service while also multitasking on work simultaneously.
But understanding how females shop or companies that provide services to predominantly women is also changing as more women get into venture capital, Wilkis Wilson went on to say, adding “It’s all of our jobs to improve it for everyone else who’s coming up behind us.”
One Kings Lane’s Feldman recalled receiving a term sheet from an investor she and her cofounder had hoped would lead the company’s Series A, but described the offer terrible and the investor was unbending in negotiating so the company walked. The investor called Feldman three months later saying his wife was giving him grief for not investing in the company.
“We need more men to understand and believe even in things that they don’t experience in their lives,” said Care.com’s Lirio Marcel, who said she faced an uphill battle trying to convince investors a business centered around providing care was not a soft issue or a women’s issue.