Have you ever said or heard said "I'm certain I have a good business idea, but I just can't seem to get it funded."? Assuming you've adequately vetted the idea, business plan in hand, your pitch perfected, and still no takers, the idea may not necessarily be bad. Rather your proposed business doesn't 'do a job' the money folks, or venture capitalists (VC), want done.
According to Professor Clayton Christensen's jobs-to-be-done framework (remember Lessons Learned from Katie Couric), whenever a VC invests money, he or she is hiring that investment to do a job for him or her. It's partly about making money, but it's also about their hiring the business -- which is in many ways an extension of their identity -- to positively reinforce that identity.
To illustrate my point, let's take another look at the reality show Shark Tank. Four of the five sharks are men. Will Ava the Elephant, a children's medicine dispensing product or Plus Size Women's (Start at Minute 31) clothing appeal to them? Not so much.
Technology? Sports?
Take a look at this clip beginning at 31 minutes: if you are outside of the U.S., click here.
Yup, you got it.
Throughout the series, the male sharks were shrewd, detached. Not so in negotiating a deal with JumpForward, a mobile application that prevents college sports recruiting violations. Robert twirling the pen says everything. Hiring this deal to make money appears almost secondary. One nearly wonders who is the bait.
Takeaways?
For women entrepreneurs:
If your business isn't getting funded, maybe you'll need to bootstrap longer. Or rework the pitch so the VC community sees this as a job they want done; in the 'outside reality-TV world, 90-95% of VCs are men.
For Male VCs:
Take a look at the deals your peers have dismissed. There is likely some pay dirt amidst the perceived dross for which you'll pay a lot less; maybe even boost your return-on-investment (ROI).
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Thoughts?
Fantastic post and a great take!
It's important to remember your audience when pitching - additionally, knowing how to pitch and catch in negotiations such that you are 'playing the game' versus a spectator are important lessons before you enter the board room.
Great angle Whitney!
Posted by: Stacey P | October 27, 2009 at 08:06 AM
Finding out what others need and matching what you have to offer is applicable everywhere in life. It will lead to more win-wins than just knowing what you want. Thanks for the reminder. I will be askng this question. I also loved the links to posts I had missed. Thanks!
Posted by: Emily Orton | October 27, 2009 at 10:06 AM
Whitney, I really appreciate the way you have expanded our understanding of business with this post. I probably won't watch this show, but with your insights it's fascinating. Thank you for sharing your knowledge and talents.
Posted by: Maria | October 27, 2009 at 02:58 PM
And at our house, my 10 and 7 year old daughters are newly hooked and wouldn't leave the house for a playdate because they were so into the negotiations. They also love to play Cashflow, So that may just be them. ;)
Posted by: Emily O | October 27, 2009 at 05:05 PM
A friend of mine was recently pitching to VCs and angels. She and her (female)partner, both well-educated (HBS grads) were (are) discouraged at how hard it is for women to be taken seriously (and their prodcut is even completely gender neutral). One (female) judge of a business plan competition they entered told them not to wear skirts. So, certainly in this area, it still is a man's world.
Posted by: Kristy | October 27, 2009 at 05:22 PM
Interesting. About 70% of my start up funds were provided by men. Also, men gave me the most feedback throughout the development of my business plan and the subsequent leap into starting the business. Each of "my men" was a great listener, and asked me important, probing questions to make sure they a) fully understood my vision and b) could offer the most relevant feedback.
None of them jumped up and down, squealed and hugged me like my female advisers and backers did when I shared my plan.
How grateful I am to have had both types of supporters!
Posted by: Janna | October 27, 2009 at 09:47 PM
Very interesting, indeed!!! I had didn't even think of it that way.
Posted by: JenniferG | November 04, 2009 at 01:20 PM