The venture capital industry needs to look at female representation in their teams more seriously as it would allow them to understand women founders better and make them more comfortable in taking investment calls, says Ayushi Gudwani, founder and CEO, FS Life (formerly Fablestreet).
“More women in the venture capital industry are surely needed for women to get fair representation in funding as well. Also, as more female founders see success, more VCs will warm up to women founders. Male VCs should also try to spend more time with women founders (even those they haven’t invested in) to understand them better,” said Gudwani in an interview for DealStreetAsia’s Female Founders report 2022.
According to Gudwani, the whole trail of less visibility for women starts in the initial days of their careers when there are fewer women in the workplace, to begin with. “As we see more women in the senior leadership space, we will see more women founders coming in who will find it a lot easier to raise money.”
Set up in September 2016 by Gudwani, FS Life was originally started with a single brand, FableStreet. Last year, it transitioned to a house of brands with the launch of Pink Fort, an Indian-fusion wear brand; and Mikoto, a sterling silver jewellery brand.
FS Life had raised about $6.1 million in its pre-Series B funding round led by Fireside Ventures last September.
What led you to become an entrepreneur? How would you describe your entrepreneurship journey so far?
My entrepreneurial journey began when I struggled to find well-fitted and comfortable western workwear in the Indian market. As I started digging deeper into the problem of sizing and fits, I realised that most Indian women were compromising with sub-optimal fits as almost no brand was giving them the right fits. After extensive evaluation of the category of women’s workwear and taking measurements of 200 women myself, FableStreet (now FS Life) was launched in September 2016.
My journey so far has been fantastic. As a business, we’ve grown 10x in the last couple of years and have transformed from being a single brand to a house of brands. Moreover, we have been able to add brilliant talent to our FS Life family and have also onboarded three brand ambassadors.
What are some of the biggest challenges you’ve faced as a female founder? How did you overcome them?
An entrepreneur is someone who creates a new business and enormous growth opportunities. While there are innumerable challenges along the way, I don’t believe that my challenges had anything to do with my gender. My background is solid enough for a lot of investors and other stakeholders, which has allowed me to have enough support in the journey. I understand it may not be the same for everyone.
What challenges did you encounter while fundraising? Did you face any implicit or explicit gender bias while raising capital?
While there have been several discussions around investors’ inclination towards male entrepreneurs, I have been lucky enough to not face any implications whatsoever. Furthermore, my profile has been stronger than a lot of my male counterparts in the industry, which just became a catalyst for the business’s growth trajectory.
Do you think that investors tend to have different expectations or standards for female founders versus male founders?
I believe that times have changed, and gender roles have become minimal when you pitch your business to an investor. Biases may exist at some point; however, it has become easier for women entrepreneurs to pitch than it was a decade back. The notion of women not being good leaders is fading gradually. No matter if you are a male or a female, investors now are more interested in knowing how prepared you are, how deeply you have thought about the problem you are wanting to solve ad your planning and growth strategy. Being a female entrepreneur gives an edge over male counterparts at times along with being a leader with the right mind and guidance, women tend to resonate emotionally with the employees as well.
What are some of the potential reasons for the gender gap in venture funding, and how do you think these can be addressed?
The gender gap in venture funding comes from inherent gaps at multiple levels. If you look deeply at the founders who get funded, you will find a big proportion has earlier been leaders at other startups. And this is where women have very low representation. The whole trail of less visibility for women starts in the initial days of their careers when there are fewer women in the workplace, to begin with. As we see more women in the senior leadership space, we will see more women founders coming in who will find it a lot easier to raise money.
I believe even the venture capital industry needs to look at female representation in their teams more seriously as it would allow them to understand women founders better and thus be more comfortable in taking investment calls.
In the current environment, when funding will be more difficult to secure for most startups, could female founders find it tougher to raise capital?
I don’t think the current environment will specifically impact women/men differently. Investors will follow the same yardstick to look at a business, so any decrease in funding that happens should be proportional. In fact, women may have an advantage as historically women founders have raised less money so they have focussed on building businesses that are sound on fundamentals versus aggressively going for growth at all costs. In today’s time, strong fundamentals are everything that investors want.
What advice would you give to other female entrepreneurs?
Follow your dreams. Whatever you want to do, your aim must be to be the most knowledgeable person in the field. The more in-depth you know about your business, the better you will do. Don’t let perceived bias against women bother you, you can’t control that. You have to do the best you can and work with people who respect you for what you bring to the table.
How can we work to change the culture and mindset within the venture capital industry to be more inclusive and supportive of female founders?
More women in the venture capital industry are surely needed for women to get fair representation in funding as well. Also, as more female founders see success, more VCs will warm up to women founders. Male VCs should also try to spend more time with women founders (even those they haven’t invested in) to understand them better.
In your opinion, what are some of the most important factors that investors should consider when evaluating a startup, regardless of the founder’s gender?
I believe the three factors that make a business/founder investable are clarity of thought, the size of the market, and the execution plan.