Edtech Business

Clueless Questions Investors Ask

By Betsy Corcoran     Mar 6, 2014

Clueless Questions Investors Ask

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

 It was amoment of raw candor during the recent SXSWedu conference in Austin. She was inthe 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 investmentbanker, Jessie Woolley-Wilson, president and CEO of DreamBoxLearning, and Lynda Weinman, founder of Lynda.com. (I was doing double-duty asboth moderator and panelist.)

“Find a newinvestor,” shot back Quazzo.

Agreed. Buthow should the entrepreneur respond in the moment?

We didn’thave a ready-made answer for her. But as I thought about the panelconversation and reread the tweets, I saw the ingredients in our conversation—lessons learned thattogether might offer her a response.  

The womenon the panel shared stories of moments of confrontation and the flashes ofinsight that those times sparked. Among those that stood out:  

  • Lynda Weinman recalled getting rejected when sheproposed writing her first book. She wrote the book anyway and it became abestseller.
  • Deborah Quazzo described her frustration when,as a young investment banker, she realized she was systematically left out ofbuilding client relationships when her firm took the clients golfing at allmale golf clubs. She wrote a blunt—but polite—note to the head of the firmpointing out the inequity, and the policy changed.  
  • Jessie Woolley-Wilson recalled the time when shewas waiting in the reception area of a Silicon Valley venture capital firm todo an investment pitch and another visiting entrepreneur asked her to get himcoffee. “I told him if I did work there, I might be willing to get himcoffee 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 thework 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 othersmay 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 thatyoung entrepreneur asked during the session, it seemed to me there were two issuestangled up in one another—and that one was appropriate and the other not.

First is the question of whetherthe CEO of an emerging startup seeking funding is implicitly recommitting tothe startup.

Investment funding—from eitherinvestors or angels--is not a reward for what the startup has accomplished buta 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 monthstalking with investors and venture capital firms, seeking funding for EdSurge. Mychildren are in high school; no investor wondered if I would wind up going onmaternity leave any time soon.

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

That strikes me as a fairquestion.

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

So here’s my answer to that youngfemale entrepreneur: Rise above the question and remind investors what theyshould be asking about. And let them know what their 19th centurymyopia causes them to miss.  

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

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

Oh, and do ask them to spell theirnames carefully as you are an active contributor to the VC feedback site, TheFunded or Secret.ly. Future entrepreneurs will surelywant to know about such outmoded screening techniques as they consider whoshould finance their company.  

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

Edtech Business

Clueless Questions Investors Ask

By Betsy Corcoran     Mar 6, 2014

Clueless Questions Investors Ask

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

 It was amoment of raw candor during the recent SXSWedu conference in Austin. She was inthe 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 investmentbanker, Jessie Woolley-Wilson, president and CEO of DreamBoxLearning, and Lynda Weinman, founder of Lynda.com. (I was doing double-duty asboth moderator and panelist.)

“Find a newinvestor,” shot back Quazzo.

Agreed. Buthow should the entrepreneur respond in the moment?

We didn’thave a ready-made answer for her. But as I thought about the panelconversation and reread the tweets, I saw the ingredients in our conversation—lessons learned thattogether might offer her a response.  

The womenon the panel shared stories of moments of confrontation and the flashes ofinsight that those times sparked. Among those that stood out:  

  • Lynda Weinman recalled getting rejected when sheproposed writing her first book. She wrote the book anyway and it became abestseller.
  • Deborah Quazzo described her frustration when,as a young investment banker, she realized she was systematically left out ofbuilding client relationships when her firm took the clients golfing at allmale golf clubs. She wrote a blunt—but polite—note to the head of the firmpointing out the inequity, and the policy changed.  
  • Jessie Woolley-Wilson recalled the time when shewas waiting in the reception area of a Silicon Valley venture capital firm todo an investment pitch and another visiting entrepreneur asked her to get himcoffee. “I told him if I did work there, I might be willing to get himcoffee 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 thework 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 othersmay 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 thatyoung entrepreneur asked during the session, it seemed to me there were two issuestangled up in one another—and that one was appropriate and the other not.

First is the question of whetherthe CEO of an emerging startup seeking funding is implicitly recommitting tothe startup.

Investment funding—from eitherinvestors or angels--is not a reward for what the startup has accomplished buta 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 monthstalking with investors and venture capital firms, seeking funding for EdSurge. Mychildren are in high school; no investor wondered if I would wind up going onmaternity leave any time soon.

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

That strikes me as a fairquestion.

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

So here’s my answer to that youngfemale entrepreneur: Rise above the question and remind investors what theyshould be asking about. And let them know what their 19th centurymyopia causes them to miss.  

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

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

Oh, and do ask them to spell theirnames carefully as you are an active contributor to the VC feedback site, TheFunded or Secret.ly. Future entrepreneurs will surelywant to know about such outmoded screening techniques as they consider whoshould finance their company.  

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

STAY UP TO DATE ON EDTECH
News, research, and opportunities - sent weekly.
STAY UP TO DATE ON EDTECH
News, research, and opportunities - sent weekly.