The performance of women-owned businesses often impacts the perception of investors towards female-founded companies in general, said Shruti, Co-Founder and CEO of Apnaklub.com. Sharing one such experience, she said once a known angel outfit doubted her operational capabilities based on their prior bad experience with a female founder.
“In a scenario where 90% startups fail, it’s hard to imagine that all their male founders were roaring successes. This kind of view is very ill-founded and highlights the issue of each female founder bearing the weight of expectations of the outcome of all other female founders,” said Shruti in an interview for DealStreetAsia’s upcoming report on female founders in India.
“I do believe we have had to make our case with our numbers, and it appears that different founders get different amounts of scepticism when it comes to ‘vision’. Again, the funders we ended up working with were always deeply respectful, happy to publicly signal their belief in us, invested time in us, often had other female entrepreneurs who spoke highly of working with them, etc.,” she added.
ApnaKlub, a business-to-business fast-moving consumer goods wholesale startup, raised a total of $16 million in its Series A round of funding last January from investors including Tiger Global, TrueScale Capital, ICMG Partners, Flourish Ventures, Sequoia India’s Surge, Blume Ventures, and Whiteboard Capital.
Edited Excerpts:
What led you to become an entrepreneur? How would you describe your entrepreneurship journey so far?
As a middle-class person and one of the three daughters of a couple focused on making them economically independent, financial success and independence are important to me. As a result, I focused on asset creation rather than income. Ever since I learnt more about this philosophy, I have wanted to work with small businesses and find ways to help them succeed and scale. A healthy SME sector is vital for our country’s economy and for people to build up assets/wealth as opposed to just monthly income. I spent time during my MBA and after my graduation to find scalable business models that would support this mission. That is how my entrepreneurship journey started and eventually we created the Apnaklub model of progressive retail enablement.
What are some of the biggest challenges you’ve faced as a female founder? What challenges did you encounter while fundraising? How did you overcome them?
I found that people were sceptical of my operational abilities and my ability to attract the necessary talent in retail. There have also been one-off instances of overt bias against female founders. Once a famous angel outfit told the person who referred me that they had had a failure case with a female founder from an Ivy background and so were sceptical of my ability to start a business. In a scenario where 90% startups fail, it’s hard to imagine that all their male founders were roaring successes. This kind of view is very ill-founded and highlights the issue of each female founder bearing the weight of expectations of the outcome of all other female founders.
Has the bias towards female founders improved in recent years? Have you seen a mindset change?
We saw greater funding in the recent past, but the numbers since funding winter onset show that funding to women has decreased again. This is in spite of significant results showcasing that startups with at least one female founder outperform general startups. That said, I have on my journey encountered multiple funders male and female who have had confidence in our ability to build a successful business in a sector dominated by a lot of highly funded players.
Do you think having male co-founders made a difference in your fundraising journey?
It’s difficult to speculate on the unknowable. I believe my funders were persuaded by our respective areas of skill, especially as we have a fairly good representation of women leadership in Apnaklub.
Do you think that investors tend to have different expectations or standards for female founders versus male founders? Can you share any specific questions that are typically asked of female founders?
I do believe we have had to make our case with our numbers, and it appears that different founders get different amounts of scepticism when it comes to ‘vision’. Again the funders we ended up working with were always deeply respectful, happy to publicly signal their belief in us, invest time in us, often had other female entrepreneurs who spoke highly of working with them, etc.
What are some of the potential reasons for the gender gap in venture funding, and how do you think these can be addressed?
Lack of enough visible success stories which makes it harder for VCs to pattern match. That said, having a gender-neutral interviewing process (names blanked, voices garbled, photos on decks not allowed) may change who gets filtered out. More carry-related and less fee-based funds are also truly focused on finding the outliers. I have often seen that male investors with working wives and daughters are tremendous allies.
In the current environment, when funding will be more difficult to secure for most startups, could female founders find it tougher to raise capital?
If we see the numbers, they are finding it tougher.
How deeply has the funding winter affected your company’s fundraising and expansion plans?
Not much as we are well funded, and we have always raised on performance plus vision and not just unsubstantiated beliefs. Our numbers have always been strong.
What’s the fundraising outlook for 2024?
I will be looking to fundraise for my Series B.
What advice would you give other female entrepreneurs?
Find allies who believe in your potential and outperform on expectations. Exceptional founders find ways to create ‘And’ companies — high growth and good margins, low burn and great talent. We have to be willing to give our all and have the mental health and family support structures that let us give our all. Create value for others and ask for help when you need it.
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?
Clarity about the problem, insights into the consumer and the solution, and test for enduring and high energy of the individual.