Clueless Questions Investors Ask

Clueless Questions Investors Ask


The young woman leaned into the microphone: “I’m the CEO of an edtech startup company and am talking with investors about funding. But what should I say when they ask me if I’m going to get pregnant or go on maternity leave?”

 It was a moment of raw candor during the recent SXSWedu conference in Austin. She was in the right place, asking for guidance from a panel of women who had “been there, done that”: Deborah Quazzo, founder of GSV Advisors and a long-time investment banker, Jessie Woolley-Wilson, president and CEO of DreamBox Learning, and Lynda Weinman, founder of (I was doing double-duty as both moderator and panelist.)

“Find a new investor,” shot back Quazzo.

Agreed. But how should the entrepreneur respond in the moment?

We didn’t have a ready-made answer for her. But as I thought about the panel conversation and reread the tweets, I saw the ingredients in our conversation—lessons learned that together might offer her a response.  

The women on the panel shared stories of moments of confrontation and the flashes of insight that those times sparked. Among those that stood out:  

  • Lynda Weinman recalled getting rejected when she proposed writing her first book. She wrote the book anyway and it became a bestseller.
  • Deborah Quazzo described her frustration when, as a young investment banker, she realized she was systematically left out of building client relationships when her firm took the clients golfing at all male golf clubs. She wrote a blunt—but polite—note to the head of the firm pointing out the inequity, and the policy changed.  
  • Jessie Woolley-Wilson recalled the time when she was waiting in the reception area of a Silicon Valley venture capital firm to do an investment pitch and another visiting entrepreneur asked her to get him coffee. “I told him if I did work there, I might be willing to get him coffee while I got some for myself—but I did not. I asked him what made him think that I did? And then I told him I had to go to deliver my pitch to the partners at the equity firm.”

Woolley-Wilson summed it up well: You have to be confident in who you are—confident in your abilities and the work that you’ve put it in. And you have to commit yourself to being great at something. "There's no substitute for excellence," she observed. At the same time, you have to recognize that others may see you differently. And it’s okay—in fact,  essential—that you help them see you as you see yourself.

As I reflected on the question that young entrepreneur asked during the session, it seemed to me there were two issues tangled up in one another—and that one was appropriate and the other not.

First is the question of whether the CEO of an emerging startup seeking funding is implicitly recommitting to the startup.

Investment funding—from either investors or angels--is not a reward for what the startup has accomplished but a bet that there’s much more ahead. Especially in early stage companies, investors are staking a claim, in part, on the CEO.

I spent the last seven months talking with investors and venture capital firms, seeking funding for EdSurge. My children are in high school; no investor wondered if I would wind up going on maternity leave any time soon.

But several potential investors did ask me about my expectations for the next few years: Would I stay with EdSurge? Would I sell? Did I have the energy to keep up the pace that we had set so far? If I wasn’t in the frantic scramble to make the next payroll, would I take it easy? Was I committed to building the company?

That strikes me as a fair question.

What’s simply wrong is the assumption that because an entrepreneur is “different” in some way from the investor—gender or race or any other attribute—that the entrepreneur’s motivations or abilities are therefore suspect.

So here’s my answer to that young female entrepreneur: Rise above the question and remind investors what they should be asking about. And let them know what their 19th century myopia causes them to miss.  

Tell your investors that you are deeply committed to the company. Let them know you are devoting all your intelligence, your energy and your creativity to building a successful company, delivering great products to your customers and helping learners.

Then remind them that if they cross off a portion of entrepreneurs simply because of their age, gender or parenting status, they fumble the chance to back the likes of Sheryl Sandberg and Marissa Mayer. Does that represent their investment smarts?  

Oh, and do ask them to spell their names carefully as you are an active contributor to the VC feedback site, TheFunded or Future entrepreneurs will surely want to know about such outmoded screening techniques as they consider who should finance their company.  

And finally, ask them if they’re willing to be as committed to helping your startup succeed as you are. Because those are the only kinds of investors you should have. 

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