WIRED: We need to talk about investors’ problem with vaginas

“I walked into this room, and there were probably about 30 men in their late 50s and 60s – all white hair,” says Colette Courtion, founder of Seattle-based health and wellness company Joylux. It was the first time she had pitched to a group of investors. “And I said: ‘I’m here to talk about vaginal health’. The looks on their faces! They turned red, they started shuffling their papers. It was a complete disaster and I received no funding from them.”

It’s a familiar scene for female entrepreneurs in the femtech sector. Joylux’s flagship product is the VSculpt, a vaginal rejuvenation device that helps women after childbirth and menopause. “I was really frustrated because here we have this incredible product and a huge market, and none of these investors could see it,” she says. Annoyed by the blank faces she kept encountering, Courtion made a decision. “I did something… it’s sad that we had to come to this, but I had to hire a white male that looked like them.”

A glance at the company’s website shows a male CFO with a salt-and-pepper beard. “It changed the way that these male investors perceived me because it was as if one of their own was endorsing the company,” she says.

Over the last four months, Courtion has raised $1.2 million (£914,000) in funding to reach a total of $16m, employing ten people – but all of the money has come from angel investors. “We can’t get the attention of any major VCs,” she claims, “because the word vagina scares them.”

Venture capital investors are overwhelmingly male – about 90 per cent in the UK and US. While the proportion of start-ups founded by women worldwide has doubled to 20 per cent from 2009 to 2019, the investment they receive is staggeringly low.

Out of every £1 of venture capital investment, all-female founder teams in the UK get less than 1p, according to a British Business Bank report. Meanwhile, all-male founder teams receive 89p, and mixed-gender teams get 10p. In the US, about three per cent of VC money goes to female founders, according to PitchBook.

If you take 4,330 start-ups on AngelList that are gender-neutral in terms of their industry – with the only difference being the gender of the founder – the disparity becomes obvious, according to a new study from researchers at the University of California, San Diego. “Women did 40-50 per cent worse in terms of just getting preliminary interest or getting actual funding,” says Richard Townsend, assistant professor of finance at the university and a co-author of the study.

He says either male investors, “consciously or unconsciously” prefer working with entrepreneurs that look like them, or that male investors could “hold an incorrect stereotype of female entrepreneurs”, believing their businesses to be less attractive investment opportunities. But that’s not justified. Townsend discovered that the female-led start-ups men invested in performed better – they were more likely to go public and about seven per cent less likely to fail than those run by their male counterparts.

It’s hard enough for any female entrepreneur to raise money, but those with a vagina-centric innovation, it’s even more difficult. This sentiment was a recurring topic at this year’s FemTech Forum organised by Women of Wearables, which was all-digital because of the pandemic.

“With investing, there’s a human tendency to take an idea and make it relevant to your own experience, and think about the pain points you felt,” Afton Vechery, co-founder and CEO of San Francisco-based Modern Fertility said at the conference. “A lot of the men we pitched, said: this is interesting, let me go home and ask my wife.”

They don’t have first-hand information and they don’t have the medical credibility to invest in the area, says Trish Costello, founder and CEO of investment platform Portfolia. After all, VCs don’t tend to have a background in gynaecology. Male investors are “uncomfortable with the topic,” as one well-known VC put it: “I don’t want to talk about vaginas every Monday morning in my partner meeting.”

This seems backward – culturally, but also financially – given that femtech has half the global population as target customers and market potential of $50 billion by 2025, according to Frost & Sullivan. Society has mostly overlooked or ignored female health – from the detrimental side effects of the birth control pill to a lack of ground-breaking innovation in childbirth and menopause. So, for femtech startups there’s a huge opportunity to innovate.

Farah Kabir is the co-founder of London-based Hanx, which designs condoms by women for women. Their condoms are decidedly different: vegan, biodegradable and more vagina-friendly by avoiding nasty chemicals. Like every female entrepreneur in the market, Kabir can easily recall some maddening encounters with potential investors.

One high-profile investor asked her to slash the valuation of her company and attempted to mansplain the industry to her. She says another “actually had the audacity to ask me to demonstrate how to put on a condom”. “They didn’t take me seriously as a woman trying to raise investment for a business that currently is a male-dominated industry,” Kabir says. Other investors simply didn’t get the point of her company. “They think it’s a man’s job to be carrying condoms.”

So far, Hanx has four employees and raised £1m from angel investors. About 40 per cent of their investors are women, which mirrors the fact that about 40 per cent of condoms in the UK are bought by women.

Across the Atlantic, Lora Haddock founded her sex toy company Lora DiCarlo in 2017, and says many of the reactions to her business – when she’s fundraising and speaking in public – have been “rooted in gender bias, and a fear of vaginas”.

Let’s not forget that the business world is a reflection of our culture. A figurative fear of vaginas can be traced back to folk tales of “toothed vaginas” throughout history and “vagina ghosts” in Japanese prints. This fear was central to Freud’s idea that men suffer from castration anxiety.

Today it’s still apparent in the way we use language. Calling somebody a dick is commonplace, but try shouting vagina in a pub. The Vagina Monologues have done much to further the conversation, and even Gwyneth Paltrow’s vagina candle is pushing the envelope. As Haddock says: “lady bits, hoo-haw, honey pot…I think it’s about time we get comfortable with the word vagina.”

So how can founders successfully pitch vagina-centric businesses? One solution is to move their business case away from personal experiences to data-based arguments. Vechery decided to pay for surveys before fundraising, for example, to be able to show investors that there is a need. Another solution is to galvanise more women into investing. But VC investors tend to be former entrepreneurs, so it’s a chicken and egg problem.

What’s more, fundraising is only part of a start-up’s journey. Promotion is another hurdle. Joylux’s target audience – women over 40 – is on Facebook, but Courtion says her company can’t use the word vagina on the platform because it’s deemed pornographic. “You can say penis and erection and erectile dysfunction. You cannot say vagina! It makes our world really challenging when you can’t talk about a body part that 50 per cent of the world’s population has, because people think it’s dirty or taboo.”

So instead of saying vagina on Facebook, they say: “this is for your v” or “your feminine wellness.” What happens as a result is that women are engaged but wonder: what does this product actually do?

“We have to have a functioning vagina in order to live life to the fullest,” says Courtion. “If you’re not making investments in companies that are helping women, if you’re not giving them a platform to talk, then you’re not going to see progress.”

When pitching a group of uncomfortable investors, Haddock makes sure to say the word vagina as much as possible. “My best advice is to absolutely dig your heels in and know that what you are doing is amazing.”

And if it makes them blush? “The purpose of my company is literally to destigmatise sexuality and masturbation, particularly for women. So, if you don’t like the word vagina, then you’re not going to be very comfortable for the rest of your life, because this is the direction society is going in.”

This feature was originally published in WIRED magazine on 7 August 2020: https://www.wired.co.uk/article/vagina-pitches-vcs-sexism

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