It seems as though women-founded businesses have been underfunded since (what feels like) the beginning of time. According to Crunchbase, only 2.3 percent of venture capital went to women-led startups in 2020, a drop from previous years. For two women who started a braless clothing company, and where we mostly pitched to men, it was clear why the process was hard.

We’ve gone through the search for capital multiple times, throughout the lifecycle of our company. We had no choice but to start by self-funding our business, Frankly, out of our personal accounts. We then moved from bootstrapping to raising different forms of capital after about six months of being self-funded. Having broken the million dollar raised mark, and despite being in the “difficult to fund” apparel industry, our experiences gave us insight into the tricky world of business. Here's what we've learned along the way, and what has helped us raise funding and lead our brand to success.

1. Understand what you have working for and against you, and go for it anyway.

Starting a company is fundamentally contrarian. There will be people who think you or your idea is crazy, but a product would already exist if it were a universally good idea. Start by making sure you have a clear idea of what funding in your sector looks like for your company. Have some early revenue? Go on Crunchbase and see who has raised a pre-seed or seed recently, and see what type of traction those companies have.

Earlier rounds are less likely to be documented, but finding a network of entrepreneurs can help you get an idea of what the funding environment is like in your sector, or an adjacent sector. For the two of us, it was tapping into our business school and undergraduate networks. With one of us being Asian-American, we also found Gold House which has a community of founders willing to help one another. We knew that being an apparel company was working against us, so we had to get creative on funding.

2. Funding may look different depending on your vision and stage.

We figured out what we needed at every stage, to get to the next milestone, and we raised enough to get there. Kickstarter is non-dilutive, so when we were looking for proof that people wanted the product, we knew that was our best option. If it went well, the Kickstarter funds would cover the inventory. And if it went poorly, we would take it as a sign that the company would not be a full-time venture for us. Luckily it went really well and we were able to cover our first runs of inventory with it.

We then raised a friend and family round, and a year and a half later raised a pre-seed from two institutions. The friends and family round was raised to set up the company, run experiments, and figure out exactly who our customer was. The pre-seed was to refine our focus and take the business to the next level. We thought a lot on if institutional capital would be a fit, and the answer is that it depends on what type of business you want to build. There’s an argument to be made about bootstrapping to profitability, then raising an institutional round if needed for specific reasons. The question to ask yourself here is: are you willing to give up more of your company to someone else, to build a bigger business? That tradeoff makes institutional capital not worth it for some founders. There are also pitch competitions, grants, and other ways to find capital for your business. 

3. Be able to point at concrete proof.

Lots of people raise ideas, but all of them have some sort of proof point that they gathered during needfinding. For every type of company, you need to have an indicator that people are going to pay for that product. Whether it’s crowdfunding, a social media proof point, or revenue, it’s much easier when you can point at concrete metrics.

For consumer businesses already bringing in revenue, metrics like repeat customer rate, returned item rate, and AOV is important. With a B2B company, you want some kind of pilot or letter of intent with your target type of consumer. As women raising for a women-centric product, we needed more proof for Frankly – especially when talking to male investors. We needed to show that bras were a pain point, so we asked investors to go home and ask the women in their lives if they hated their bras. They were often surprised by the answer, though we weren’t! 

4. Practice pitching with a variety of personalities.

We practiced our pitch at least 15 times with different people (investor friends, friendly faces, and friends of friends). This helped us ensure our deck was telling the story we wanted to tell. There are friendlier investors, people who ask pointed questions, and others who are obsessed with numbers. You never really know who you’re going to get when pitching, so make sure you’re ready for every personality.

Some investors are just harder to read than others, and that’s okay. Everyone will have different reactions to your deck but you’ll start to see patterns, then you can adjust accordingly before you go out to the market. Docsend, which we used to send out our deck, has a piece on what every deck needs. Our advice from what we’ve seen is to keep your deck under 12 slides. People have short attention spans.

5. Know that it’s going to be an emotional process, even if it goes well.

Even the most successful businesses have had trouble raising in the beginning. The example that we always think about is John Foley, the founder of Peloton. "Foley raised $400k at a $2M post-money valuation from eight angels. From 2011 to 2014, he pitched to 3,000 angels and 400 firms. Almost everyone said no. Eventually, he raised $10M from 100 angels," Joe Vennare shares on Twitter.

Even if you raise successfully, you'll still likely have to hear at least 30-40 no’s through the process. There are a ton of reasons why people don’t invest, and it doesn’t mean your company won’t do well. The self-belief that you’re building a business that is going to make a difference in the world will keep you going throughout all of it. 

About the Authors: Heather Eaton and Jane Dong are the co-founders of Frankly Apparel, an inclusive clothing brand that designs bra-less essentials for women of all sizes. Before starting Frankly, the two of them worked at Deloitte, Goldman Sachs, Uber, and Rothy’s. The duo met at Stanford Graduate School of Business, where most of their classmates were starting tech companies. They felt so strongly about making the bra-less trend more accessible to all cup sizes, that they started Frankly anyway.