The Lip Gloss Gap: Simona Di Vietri, Entrepreneur & Investment Proffesional
09/05/2023 by The Red Tree
“We need to help female founders to change the narrative and believe passionately in their ideas”
Simona Di Vietri, Entrepreneur and Investment Professional
Simona is an entrepreneur and investment professional with deep experience in financial operations. Simona has worked for a range of highly regarded financial institutions in London and the Middle East. With a proven history of success in driving financial operations internationally, and having navigated throughout a range of sectors and corporate environments, Simona has cultivated unique industry insight. Simona is also a founder of La Latteria, and mother to twins (a boy and girl).
Why do you think the female fundraising gap is so stark?
There are a few reasons, in my view, but the starting point is that women entrepreneurs (or lack thereof) are a bit like a self-fulfilling prophecy. Statistics speak loud and clear: as a woman you are less likely to grab investors’ attention and, even if you do, you are less likely to be funded (on a like-for-like basis with your male peers).
And so, with the odds not in your favor, why would you take that leap of faith knowing that you are always running on the external lane of the track (so your distance is always longer). And so, with a drastically smaller population of women founders to pick from, it becomes a probability game. Then, combined with natural attrition and gender-bias of investors, that gap tends to expand exponentially fast, leading to that 2% figure (which by the way has been reducing over the past few years, showing that the huge attention on the matter has yielded limited results and, in reality, not much progress has been made). That figure is even more striking when, the same statistical data shows that WHEN and IF women do get funding, they achieve as much success as their male counterparts, if not more.
There is however the other side of the coin, which is women represent less than 10% of partners / decision makers roles in the investment industry, and that further exacerbates the gender gap, which then has ripple effects:
- Female investors are twice as likely as men to invest in a company with female founders
- Businesses with both a female founder or/and a female executive hired six times more women, which will then contribute to increase that female population.
So, the trend is quite clear, but we need to change the starting point to be able to benefit by amplifying that effect.
What do you think needs to happen to help close the female fundraising gap?
To be honest I do not have a clear answer on what needs to happen to unlock a situation, that is feeding off itself. What is very clear to me is what should stop happening, which is forcing “female” focus on funds and quota on capital allocation to ensure women’s representation.is It sounds counter-intuitive, but capital allocation driven by compliance requirements (rather than on merit of growth potential, quality founder and right execution capabilities) usually generates suboptimal investment choices with subpar returns, And what’s next? You create a link between female founders and lower performing businesses which is incorrect, as in reality those businesses were picked for the wrong reasons.
"What we should certainly do is make sure the right opportunities emerge and come to light by empowering female founders with less experience and exposure, to get that confidence and assertiveness which puts them behind their male counterparts."
Banks, corporates, and funds put their resources through constant training. That’s how they begin and evolve in their journey. Yet we expect entrepreneurs to learn a much harder job by trial and error (on the job). And while that is fine, what if we could accelerate that process? What if establishments (corporates, investors, banks) could take the social responsibility to create programs to form and train (and then continue to mentor) young people with entrepreneurial ambitions. Imagine the pool of ideas, talents and opportunities that could come to market (also for the benefit of those institutions). And that will naturally capture a large portion of ambitious (female) entrepreneurs that could be equipped for success rather than set for failure.
What advice would you give to female fundraisers?
My first piece of advice would be more to a female founder stepping into her new venture (so way before any funding). From day one, when you decide to start a business, think that at one point (often sooner rather than later) you will need funding and start building that business with that aim always clear in your mind. That doesn’t mean that you should not be true to your mission and idea and build it for someone else, but simply to add one more element in your decision tree: “what will that decision do to the company and how (future) investors will look at it”. Or “can I achieve the same in a more “investor friendly manner”. If not, and you do get to that fundraising bridge and your business is not in “shape” to attract funding, often the time needed to get ready may be the breaking point. I have seen so many founders rushing into deals they should not have, just because they desperately needed money and they did not have the time “to fix” things (that could have yielded better terms). So, do not put yourself in that position.
The second piece of advice, when you are in fundraising mode, would be: be prepared, do your “homework” properly and furthermore, seek guidance or mentoring from people who have done it before and rehearse your sale pitch. BUT do not over-think and over-engineer (and waste time as a result). There is a structural hurdle with women when it comes to their career (and this is more evident with women entrepreneurs): confidence gap (of course exacerbated by gender biases). This causes two things:
- Women tend to always think that they are not doing enough and can do more and better, and so over-prepare, spending disproportionate amount of time on getting ready, when they already are (time is of the essence).
- Female founders tend to under-sell themselves and their businesses, resulting in either “NO GO” decisions or much less funding than they could aim for. So be confident and do not be shy to show it and “sell” yourself.
Let them negotiate with you – do not negotiate with yourself.
What is your experience of working with female entrepreneurs?
My direct experience working with female entrepreneurs has been primarily on the mentoring side, i.e., people who have come to me (knowing I am both a founder and an investor) seeking guidance. Sadly, and to reconfirm the issue we are discussing, I have never yet had the opportunity to work (on the fund side) with any female founder.
My experience is that they are sharp, focused and extremely driven. What they lack, at the risk of repeating myself, is the confidence of standing in front of investors and telling them their story to convince them that they can deliver. And that is because they underestimate their ability to deliver.
As an investor, I have spent a lot of time questioning aggressive business plans from (male) founders, presenting scenarios hard to substantiate from any standpoint. But they support that with such conviction (is what she used which is stronger) confidence that you may end up doubting yourself and accepting some of their points (if not all).
When I have had the opportunity to work with their female counterparts, the story switches. The tone is always very sober and careful. The numbers are always conservative, I would dare say, pessimistic at times. I have had to argue to push projections up because they were massively underestimating their growth and profitability. And the answer was always the same: WHAT IF I cannot archive that? WHAT IF, WHAT IF…… Better to present a lower scenario and then exceed expectations so everyone is happy.
Now the flaw with that approach is that companies are valued on growth potential, so you are damaging yourself. Let investors make a call on achievability. Do not undercut yourself to avoid “disappointment”. This is the biggest take away from me: we need to help female founders to change the narrative and believe passionately in their ideas.
The Lip Gloss Gap is a series by The Red Tree shining a light on the role that the beauty industry plays in closing the female fundraising gap. The series will feature interviews with founders and fundraisers which will be released monthly. We invite you to share your experiences as we continue the conversation.
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