‘I’m the founder of Student Nannies, a platform which connects parents who need childcare with university students looking for work. Earlier this year, I began looking for investment for the company, and repeatedly found it brushed aside as a ‘lifestyle business’, despite the fact that childcare is worth £5bn in the UK – hardly a small market. The potential for my business is massive – 40-50% of a working parent’s income goes on childcare – but investors can’t see past the fact that it’s aimed at women, is about childcare and is run by a parent. I wonder, would they say this to a male founder? What can I do to convince investors?’
Using the phrase ‘lifestyle business’ as a way of patronising female-led businesses is something that drives me crazy. Start by making really clear the enormity of the problem you are addressing, not only the huge ‘£5bn’ stat, but the fact that millions of mothers rely on their childcare to keep their jobs and their sanity.
Set the context that mothers are desperately looking for ways to make their lives easier and currently the options are very limited. Once you’ve set up the scale of the issue, turn what investors see as a weakness – a business ‘run by a parent’ – into your greatest strength. You are the expert and you care more than anyone about fixing this problem.
The main thing to remember for early stage funding is that, as much as it’s about presenting your brilliant idea, it’s really a job interview to see if investors think you can pull it off. If you can demonstrate grit and passion on top of a huge opportunity then any good investor will find it hard to dismiss you.
Navigating the early-stage investment landscape isn’t always the easiest of tasks. With little data to run upon, investors must make decisions through pattern recognition and reference to their own lived experiences. Given the regrettably skewed demographics of VC and angel investors, this has unfortunately led to the underfunding of businesses solving pain points not keenly felt by the typical white, male investor.
That said, any investor worth their salt should understand how large the childcare market is. (We ourselves have enthusiastically chatted to multiple businesses tackling the problem.) Given the enormous trust element involved in your business – booking childcare is an infinitely more sensitive process for a parent than choosing an Uber, and the vetting process for carers extremely rigorous – there are frictions with both supply and demand which need solving.
For us, the most important questions would be similar to any other marketplace style businesses – such as how you prevent ‘leakage’ from the platform. Having backed companies in the ‘on demand’ service category before (e.g. hairdressing), we have seen marketplaces based on repetitive and ‘high touch’ transactions churn customers as they strike offline relationships with their providers. So how does the business incentivise supply and demand to remain on the platform? Such questions plus how you scale your operations across geographies will be top of mind for investors. And once you have compelling answers, raising investment should be child’s play.
You have a conflict. You believe in your idea, but you also believe the investors can’t see past the ‘c’ word. To shift this, move the responsibility from the investors to yourself. See this as an opportunity to pitch differently, and change your mindset from rejection to empowerment.
Do you believe this is more than a lifestyle business? Any doubts in the mission or your ability to execute will show up. What do you need to believe about yourself and your idea to secure funding? What fears do you have – perhaps the pressures that funding might bring? Look at where unexamined beliefs are holding you back.
There’s a risk that your feelings of frustration will make you defensive. Practise delivering your pitch and taking questions in an open and calm way. Get feedback on everything from the content, to your body language.
Visualise how you’ll feel when you do secure funding. How did you convince the investors? Imagine it vividly. This rewires your brain for success and confidence.