Startup capital is biased but the system isn’t going to change any time soon. What strategies can woman and people of color use to get the resources they need to succeed?
Startup capital is biased but the system isn’t going to change any time soon. What strategies can woman and people of color use to get the resources they need to succeed?
Karen Cahn, the founder and CEO of IFundWomen, joins Scott to share her insights on what works to get the financing you need.
Karen is an expert on all things entrepreneurship and startups. From high-profile companies to pre-seed stage startups, she's famous for her no-BS approach to getting new businesses and products off the ground.
Watch the full session: https://bit.ly/3cjonoZ
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Scott Case 0:00
Welcome to Founders Focus, a podcast made for founders by founders. I'm Scott Case, CEO and co founder of Upside, and I created Founders Focus to help share free resources and actionable advice. Together, we're building a community for business leaders, entrepreneurs and founders to come together to tackle today's challenges. This podcast is powered by my awesome team at Upside. Please visit foundersfocus.com to join the live video sessions or to catch up on past topics.
Scott Case 0:28
I am going to introduce briefly our co-host for today. Karen Cahn is the CEO and the founder of IFundWomen, and we should just stop there, that's like the most important thing. And we're going to talk today about crushing the barriers to capital. We'd all like to make sure that the system changes, but it's not going to change anytime soon and if you're out trying to raise capital and you're a woman or a person of color, you're going to have to fight your way through the myriad of mess that's there. And Karen has some great pro tips for you. So with that, Karen, why don't you tell us more about you?
Karen Cahn 1:06
Well, thanks for having me, Scott. And thank you for being honest right off the bat about the issues that women and bipoc entrepreneurs face raising capital because most hosts make it sound like oh, what do you do, and you just like, went right for it, so mad respect. So hi everyone. Thanks for having me on the show.
Karen Cahn 1:24
I'm Karen Cahn. I'm the founder and CEO of IFundWomen. IFundWomen, if you don't know, is a startup funding marketplace. We are a two sided FinTech marketplace with the expressed purpose of driving capital to women entrepreneurs. So we're a two sided marketplace. On one side, we've got women owned businesses around the world. There are 13 million here in the US, there are 165 million globally. And on the other side of the marketplace, you've got all of the people who want to fund and support them – from individuals to enterprises to brands to venture capital firms. And we make those matches happen in the middle. And we've got multiple products in the marketplace, from an ed tech to an enterprise brokered grants product to a crowdfunding product that all ladder up to our number one core KPI, which is key performance indicator, of funding volume for women. And to date, our numbers keep going up, but we've driven over 70, it's actually now over $80 million, in early stage startup capital to women entrepreneurs, mostly here in the US, that they wouldn't have had access to if we didn't hang up a shingle four years ago. So thank you for having me. And I'm excited to be here.
Scott Case 2:41
Well, that's awesome progress. And we'll have to spend some more time after this investing and figuring out how do we change that from an M to a B on the billions because that's really what half the global population deserves to get access to to build their businesses.
Karen Cahn 3:01
Word.
Scott Case 3:01
I want to start with your founder journey. You're a founder, you said, I think you said four years ago, four or five years ago, what's your journey been like? Where did you start? Give us the highlights? And then how did you end up where you're at now?
Karen Cahn 3:15
So I've actually been a founder for longer than IFundWomen. I'm a second time startup founder. But they say an overnight success takes five to 10 years. So we're in year five at IFundWomen and people are just starting to know about us. So for all of the people watching, whether you're a second time founder or a first time founder, you are in for a slog and it takes a long time to get there. And I did not wake up like this. So let's just be clear.
Karen Cahn 3:40
So I started my sort of entrepreneurial journey, if you can say it like that, really as an intrapreneur at YouTube. So long story very short, worked at Google and YouTube, grew up there, which was an incredible education frankly, from my mid 20s to my mid 30s, on the interwebs. Learned everything about how the internet was going to be funded, which is through ads, performance based ads, and I learned everything I needed to know about video, how to create video when I worked at YouTube, so I feel very, I don't want to say lucky because I actually purposefully chose Google in the early days when no one knew what it was and everyone was like going to Yahoo or Lycos, AltaVista or ask jeeves. This was like early golden times of the internet, olden times. So I was there for 10 years.
Karen Cahn 4:33
And when Google acquired YouTube in 2006, I jumped over the fence. I worked on search for six years, which was great, but boring. And then I went over to YouTube, so I was like, ooh, video, that's cool. So I went over there. I always had been on the sales side, monetization, the fancy word that Google made up for sales. Always on the sales side. And when I went over to YouTube, my job was to monetize the big creators and back in 2016 YouTube audience was a bunch of young dudes, which is totally cool. They were the ones that had scale, enough video views that we could package it up and sell to an advertiser. And that was my job. I ran the CPG vertical, the consumer packaged goods vertical. So long story medium with that, I was like, all right, my advertisers are not interested in spots and dots, like the pre rolls, boring banner blindness was just starting to happen. I was like, we got to think of something else. And Google doesn't really want to make things, they just want to be the pipes to stuff. So I had already had a very successful career there. I'd won two operating committee awards, I was trusted. My brain is in the Google hiring algorithm. So I was like, screw it, I'm gonna just like, go rogue. And I grabbed a couple product people and a partner manager over YouTube, I was like, we got to think of ways for these production companies to keep the lights on, because they're not able to do it right now with the way that YouTube ads, the rev share was not keeping the lights on. So we developed the first native video ads on the web, also known as branded entertainment, also known as product placement. And that was very cool. So that was sort of my entrepreneurial start, I guess you could say.
Karen Cahn 6:12
And I never wanted to be an entrepreneur. I never thought about starting my own business at all until at the end of my tenure at YouTube, which was like my 10th year at Google, I had been making 10s of millions of dollars for these dudes, and god bless them all truly. We don't have a problem with men around here, I was married to one once, and that Sally Krawcheck's line that I always like to steal, like, we're not man haters. It occurred to me, I'm like, why am I spending all my time making money for men, they don't need my help, women do. And so I started like, voraciously looking through the YouTube library for all of the female creators who could be monetized. And my idea at the time, I went to my boss, who had just come over from Netflix, and was in charge of creating premium content for YouTube back in the day, and I was like, hey, guess what, if we go through our entire YouTube library and we package up all the content made by women, we put a physical stamp on it, I can quintuple the price and sell it to Unilever. And he was like, that's a really cute idea but we can't do it, it's totally illegal like we're not doing that. I was like, okay, so I just put that idea for like YouTube for women in my back pocket thinking I was going to do it at some point, but never really wanting to start my own business.
Karen Cahn 7:30
Then I went to AOL to run video there for three years, and still just wasn't ready to start my own business. And what pushed me to do it was this one insight, which I'll leave you with in terms of like, how did I get to become an entrepreneur. Which is, I decided to become an entrepreneur and take the risk and give up my well paying day job and my cushy benefits, and the micro kitchens and the massages and all of the things that you got when you work for big tech, because I was rich, I had already made it right. And I didn't come from money, self made woman. And I was at the top of Maslow's hierarchy of needs. So I wasn't worried that my kids weren't gonna go to college, and I'm a single mom so that's rare for a single mom who doesn't come from money to all of a sudden be wealthy, and be able to make a decision for herself to go and start to try to run a business. And that is the one insight I would give as a wrap up to this question to your audience is, if you are not financially secure, don't quit your day job to become an entrepreneur. Because most startups fail and that is okay. But you do not want to fail going into debt, and you do not want to fail having given up your great day job, period, end of story.
Scott Case 8:51
That's a great story. And I think that being brutally honest about the fact that you had the means to do it is such an important part of the journey, because a lot of people think somehow it was magical, and it wasn't magic. And the thing was, too, is that you actually worked for a long time at those jobs, it wasn't like you spent two years at Google and then decided to go start a company. So you also probably fit the bill on the average, which is most entrepreneurs and founders are 40 years old when they decide to step out. And there's a combination of things, right, you've had almost 20 years of work experience at that point, you have domain expertise, you have resources, you have connections, and so it's okay to be patient. So you don't have to do it right away. And the other thing that you highlighted for me and then we'll dive a little deeper is, we all have ideas and we all see problems and just because you think, oh I've seen a real problem and I know what to do about it does not mean it's the one that you should spend the next five to 10 years of your life chasing. And be patient, the world will deliver an infinite supply of problems for you to solve if your eyes are open to them. Because you could have gone and chase that YouTube for women, and you could still be there.
Karen Cahn 10:15
Oh I did homie and...
Scott Case 10:17
Okay, let's hear it.
Karen Cahn 10:18
Oh, I did. It failed miserably. So it's really funny you say that because I pocketed this idea for YouTube for women without the trolls, went to AOL, then I left and did it.
Karen Cahn 10:32
And working at big companies does not prepare you for entrepreneurship. Just like let's just marinate on that for a second. It just doesn't. Working at Google, YouTube, AOL prepares you for a life of luxury. And it also just doesn't prepare you for...You know, when you're on the sales side, especially when you think of Google, sales and engineering are literally two separate universes, they truly separate us, like physically separate us, because they don't want any sales influence on the engineers, right? Understandably, they're building products for humans, and we're just in charge of monetizing it. So I didn't see any of the crappy alphas and betas that like we're on the cutting room floor, we got products to sell that were perfect. So I didn't know what went into building a tech company, which is what my first startup was ad my second startup is, but now I know.
Karen Cahn 11:31
But I didn't have any idea what it meant to lean startup, which is Eric Reis, famous Product Manager, his book and his theory, which is test, learn and iterate. I'm sure your audience knows a lot about Eric Reis, but read the book if you don't if you haven't read it. But it's about test, learn, iterate, and it is a process by which you create product and it is something that we didn't do. I didn't even do market research. I had this problem. I was pissed off when I worked at YouTube that there weren't female creators to monetize at that point. This was before like the Michelle Fonz and Christine Lims and the Bethany Motas and all these amazing YouTube celebs. Issa Rae, like was just starting on YouTube when I was there, she had like this crappy little show and it had like hardly any views. And now she's an Emmy Award winning actress. So this was way early days.
Karen Cahn 12:25
But just getting back to the point. I had a problem personally with the YouTube ecosystem. But I didn't do any due diligence and any market research or any surveys, nothing with other women, forget women in tech, just women who like to watch videos or women who cared about other women as to whether they wanted this product, I was like, I want this product, and I'm going to build it and I have the money to build it so I'm doing it. And literally, it was such a failure.
Karen Cahn 12:54
So a couple of reasons why it failed. Number one, I didn't fail fast and fail cheap. I failed long and expensive. These are not sayings that I've made up. You've heard them many times before, but they're really true. The second thing is and I'm gonna give Reid Hoffman a shout out on this one, he always said, and I learned from his podcast Masters of Scale, if you're not completely embarrassed by your MVP, you're late to market. So I worked on this MVP, I didn't even know what an MVP was to be honest, those three letters were not in my brain. I worked on building the software, I hired expensive engineers to build the software without doing any market research, no business plan, no testing, nothing. Spent a ton of money and by the time we put the product out, A) it was clunky, it was not a great product. B) we had no users, like I thought this thing was going to be field of dreams. That's another sort of brainwashy thing that I came out of Google with was like, number one, your tech product has to be perfect, and number two, we're just going to print money, because that's what I was used to. So it just wasn't the case. I truly was shocked at how massive of a failure this was. And as a hail mary to save the company, because we could not make payroll, we couldn't raise capital to save our lives, and I will say that like yes, IFundWomen solving the problem of raising capital and we'll talk about the problem and the systemic inequities in the funding ecosystem in a minute, and it was no different. It was worse back then. But to be fair, our product sucked. And I wouldn't have funded me either. So yeah, I did try to solve that one problem. And it wasn't until the company was dying and we were running out of money, I was like, I'm not putting any of my own money into this anymore, I've done enough, and we did a crowdfunding campaign. We did a Kickstarter to make payroll. We sort of fibbed our way in, because Kickstarter is for original creative projects, and we were making videos, so we sort of fibbed our way into why we were creating this thing on Kickstarter because you have to get in. And we got in, and we delivered what we said we were gonna deliver, so that's very important for crowdfunding. But we ended up using the money to sunset company number one, bye bye, literally sunset like that shit was shut off. Oh, sorry. I swore on your show.
Scott Case 15:29
We like swearing. It's one of our features.
Karen Cahn 15:31
My mother's gonna, I'm gonna get a nasty gram for my mother.
Scott Case 15:35
I get the same messages. She hates titles where I, I wrote a LinkedIn article once that was called, Interviewing is F**ked. That went over real well.
Karen Cahn 15:47
We're unf**king it right now, Scott.
Scott Case 15:50
There you go.
Karen Cahn 15:54
So where was I? I don't even know.
Scott Case 16:00
Well, I think you wound down one company and you spun up the next one?
Karen Cahn 16:05
Yep, we wound down the first company. It was the insight of crowdfunding that got me going. So we crowdfunded for $30,000 to make payroll. And it was in that moment when I realized that crowdfunding number one is just sales and marketing, period, the end. Anyone can do it with a plan. And at that point, it was just really popular for consumers, tech, film, and, gaming, those were 94% of the highest grossing crowdfunding campaigns. And it was really Kickstarter and Indiegogo at that point were the crowdfunding platforms around. 94% of the highest grossing campaigns were in those three categories, consumer tech, film and gaming, and they were by male creators. So I became maniacally focused on this crowdfunding thing. I was like, wait a minute, why isn't everybody telling all entrepreneurs, especially women, who are amazing storytellers, why isn't everybody telling people that crowdfunding should be the first stop on their funding journey to prove demand for their product or service before they invest in supply? And by supply I mean wasting years of your life chasing an equity round that you're never gonna get or even worse, going into debt, running up your credit cards, finding a business that no one wants, like that's the epitome to me of fail fast, fail cheap, fail forward. Learn, move on, because all you're doing is raising cash, right? And so you're not going into debt. It's not a loan. And you're not wasting time. It's like fast access to capital. So of course, I was like, Alright, why isn't there a crowdfunding platform for women? Why isn't there one that helps you make your video because let's face it, making the video is like one of the hardest things and one of the number one barriers to people getting their campaigns live? And why isn't anyone teaching anyone how to do this? It's like not that hard. Why isn't there any real methodology? And there were books, to be fair, I had done no due diligence with this crowdfunding campaigns. Zero. This is a theme that I'm now like happily out of this theme. But before I was like, I don't want to call it ego, it more is probably like confidence.
Scott Case 18:26
I'd say an abundance of confidence.
Karen Cahn 18:28
Yeah. And also working at Google your whole life. We printed money, the sales job there was not that hard. It was more like, Hi, how much do you want to buy? I mean, again, I'm a no BS lady, I'm gonna just tell it like it is. And like, yeah, it was an amazing place to be, but it was easy living, man. Once you were in and you'd performed, it was easy breezy.
Karen Cahn 18:50
Anyway, getting back to the point of crowdfunding, and why it's so important to do it first is because it's really just a demand gen platform. So we sunset failed startup number one. And in October of 2016, we bought the URL, IFundWomen.com for $2.99 on GoDaddy, which was both very sad because nobody wanted it and also very exciting because that was the first choice for my domain. I'm a big believer in just telling people what you do, not making it so hard for people to figure out. And obviously, coming from Google, like I have a very good understanding of SEO, and I just wanted people to know what we did. So we got our URL. We produced a super scrappy MVP. We called her Frankenstein. So at least I'd learned in the second startup to, and this is another gem to drop for all the new startup founders out there, again, make your MVP as cheaply as possible and pick the one thing you want users to do when they come to your thing in order for you to get some testing and some some data to understand how they're interacting with whatever you're building – an app or website, whatever, a T shirt, it doesn't matter what it is, you have to have a beta product. And so we built a super scrappy MVP for like, I think $22,000, because we had to use some of the money to make the video series that we said we were going to do in the Kickstarter. And it was built on a WordPress page with a crowdfunding plugin, a slack integration, and then like we had another subdomain on Squarespace with like our product marketing pages. I mean, it was truly Frankenstein. And we hung out a shingle, I put up a Facebook post, no boosting, nothing, just to my community of ladies. And I was like, Hey, there's apparently a funding gap problem, and if you are an entrepreneur and you need funding, if you want to try out our super frankensteiny product, it probably will break, but I will make your video for you for free, I will teach you how to do it, if you need capital, just like fill out this Google Form. And I thought I was gonna get like 20 friends like just feeling bad for me, like maybe filling it out but not really following through with it. Because crowdfunding is you're putting your business out there, it's like you are here and you are marketing your business. We had 200 applications in a week, from strangers, from truly from strangers. And I was like, Oh, this is actually like a bigger problem than we thought.
Scott Case 21:35
Not only is it a bigger problem, but I just want to hone in on the product part and then I want to turn to the way you swim past the other barriers, because you've highlighted a few things here. One is, not only is it access to capital, but you've actually demonstrated that there's demand for the product, right? So you've done two things in one shot. And if you can't get anybody to pay attention after you've done it, then you may have the wrong problem that you're trying to solve. Or you may have the wrong solution to the problem. Usually if you have the right problem, even if you have a crappy solution, you'll have people raising their hands and say I have that problem. Even if your solution is for shit. So the first step is did anybody else have the problem and care about it?
Scott Case 22:16
So tell us a little bit about... fast forward past this, you've done a lot of things, you raised the capital – what advice do you have knowing what you know now and having seen the different campaigns you've done and all that? What are the things that, if someone's kind of in the early stages of their fray, what are the two or three things you think that really are important to get that first funding or that first opportunity with their product or their service?
Karen Cahn 22:45
Yeah, absolutely. So I would say number one, don't go it alone. If you're watching this, and you're at the very beginning of your journey, do yourself a favor and find a co-founder or two. I did not have a co founder, I was a solo founder and my first startup, and that's one of the many reasons why we failed. But it's widely known that two or three co-founders are exponentially more successful. You will raise more money, your company will be more successful, period. So don't go it alone. And if you cannot find a co-founder, because it's not easy, right? So my two co-founders are Kate Anderson and Sarah Sommers. Hi, Kate and Sarah, giving you a shout out. And we worked together for two years at the first failed startup. And so we dated before we got married, right. And that's like a big thing around finding a co-founder. You want to date before you get married because getting a divorce when you're a co-founder is a whole other episode. So first piece of advice is don't go it alone. And if you can't find a co-founder, find a coach or a mentor, and for the women listening and also for the men because we have men in our coaching program., we have a very robust coaching program that literally we become your ride or dies through your entire startup journey from idea to exit, not just through your funding, it's also going to be through your next round of capital, you might raise VC, you might be needing to get a PPP loan, you might need to figure out how to build a low tech MVP, we coach on a million different topics. And it's private one to one coaching with a subject matter expert. So yeah, don't go it alone is my number one piece of advice.
Karen Cahn 24:26
And then my next thing is like, we are inundated as new founders with this idea that VC makes you successful, venture capital, makes you successful and that's a big bunch of BS. Don't get sucked into the entrepreneurship porn, is what we call it. For so many of us, and especially for women, because there are so few female role models who have made it. Like we're all celebrating Whitney at Bumble right for IPO-ing And we all been celebrating Emily Weiss at Glossier, we've all been celebrating, I can name them, you know, Anne Wojcicki from 23andme, I can name them on like maybe two hands, the unicorn, female founders. So for most of us and for most male founders too, you don't need to be a unicorn. It's okay to be a lifestyle business. A lifestyle business P.S. means you're a $500 million business, you're less than a billion dollars, it's pretty darn good. So, VC is very seductive. But it absolutely should not be the first thing you're thinking about. First thing you're thinking about is building a product or service that strangers want to buy. That is all you should be focused on in the beginning phases of your startup. So number one, don't go it alone. Number two, don't get sucked in by VC. Unless you're in deep tech or deep data or like bio or something that like you need VC to build your thing, it's a whole other discussion. But for most of the entrepreneurs out there who are not in those sectors, don't focus on venture capital at first at all, in fact. And then the third thing is, the third thing was what...I don't remember my third thing was...
Scott Case 26:09
Well, you've talked a lot about crowdfunding. Maybe it's about the fact that you can use crowdfunding as a tool as an on ramp.
Karen Cahn 26:15
Don't go it alone. VC is not for everyone. Yeah, and crowdfund first. Don't go into debt funding your startup. There's plenty of crowdfunding platforms, if you're watching this, like, go to Kickstarter, Indiegogo, like, go test demand for your product before you invest in supply. So yeah, I think there were four things. The third thing last time was different but whatever, it's another nugget, enjoy.
Scott Case 26:42
Absolutely.
Karen Cahn 26:43
You can tell I'm unscripted. My team's like, stay on script. I'm like, erm really okay.
Scott Case 26:49
I haven't been able to stay on script ever. My whole life is like off script.
Karen Cahn 26:56
So that's why we're popular, Scott. People like the real deal. People like the unscripted.
Scott Case 27:04
Well, I like to call it authentic.
Karen Cahn 27:07
Yeah, that's cool. You could flip your hair, if you wanted to.
Scott Case 27:11
The hair has gotten a little bit flippable lately.
Karen Cahn 27:14
It's gotten flippable, so it's something to keep in mind.
Scott Case 27:17
I'll give my best hair flip for all of you.
Karen Cahn 27:20
Fabulous.
Scott Case 27:22
So, talk about the bridge, right? So let's say you've gotten yourself started, you've done your crowdfunding, you've raised capital, and you're down the path where you raised enough capital to get things going. And you need another injection of fuel, right? You need more cash. And, let's talk about it in the context of, you know, instead of 10s or hundreds of thousands, you're now playing into the Alright, in order to expand this business, we need millions and, let's just focus on female founders, because you might know a thing or two about doing that. What are the barriers that female founders or women founders typically run into? And then what are the ways to overcome them? What are your strategies to get past whatever those barriers are when you're trying to move to the next rung of the ladder?
Karen Cahn 28:09
Absolutely. So super quick. The problem we're solving at IFundWomen is that there's a lack of funding options for women entrepreneurs. Less than 1% of companies, regardless of the gender of the founder, will ever raise venture capital. So what are the other 99% of startup founders do? They max out their credit cards or they take out loans, and no one should go into debt funding their startup, we talked about that. And for women, the funding gap problem is egregious. So out of the roughly $300 billion of VC capital deployed every year in this country, female founders received 2.3% of it in 2020, Scott Case, which we went backwards, in 2019 we were riding high at 2.8%. And we went back .5 percentage points in 2020, which is gross. And even grosser is that female founders of color receive .64%, .64% of VC.
Karen Cahn 29:07
But the funding gap problem is not just relegated to venture capital, right? There are systemic biases that are riddling our financial services system up and down, from the fact that women owned businesses get lower loan amounts and higher loan rates than their male counterparts. Like Scott, if you and I went into a bank with bags over our heads, or not with bags over our heads and you know, we had the same exact paperwork, traction, business is the same thing, you would get 50% more capital at a lower rate than I would, and those are just facts. And in some states, including the ones that I live in, at some banks, women still have to have a male cosigner on their business loan. Like this is actually happening guys.
Karen Cahn 29:51
So the systemic biases that have been baked into the algorithms that are telling the lenders or the VCs who to fund, these algorithms are built by humans, they're antiquated, and at IFundWomen were literally rewriting the code on why women should deserve to get the funding, right. There's so many studies out there around the efficacy of women entrepreneurs, once we get over the confidence gap, which is absolutely real, and we can talk about that in a second. But once we get over the confidence gap and decide to jump into the startup pool, women actually are better entrepreneurs, we drive more dollars in revenue per dollar invested per a BCG study that recently came out. First Round Capital did a study of 300 of their portfolio companies, and found that a company with a female founder on the team drove a 63% higher return for the fund. There are studies upon studies that show that women entrepreneurs actually drive more to the bottom line, it's a lot of what we've read about with diverse brains on a board, diversity on an executive team, those teams just make more money. And so investing in women is just frankly smart business. And I don't know how we get VCs and banks to get it, or listen, or I call it the give a shit problem. To be honest.
Karen Cahn 31:24
I don't have a solution to how to get other people to care. But we have a solution that literally provides funding to those who don't have access to it. It's alternative sources of funding for people that don't have access to it. And I have to say that our marketplace works because it's not just one type of funding. So you've got crowdfunding to prove demand, you've got our coaching – our ed tech product, which teaches you not only how to crowdfund, but how to have a business, how to start your business in a smart way, avoiding all the rookie mistakes that I made, truly, all my mistakes got poured into this edtech and more. We crowdsource every founder mistake made and we have built curriculum to correct it. And it works because we know that the people that go through our coaching program raise 27x the crowdfunding industry average. 27x, it's a lot more money.
Karen Cahn 32:15
And then on top of that, we've got the enterprises. So this is interesting, Scott, we found that in terms of solutions, we found that the enterprise, so brands like American Express, and Visa, and Novartis a pharma company, one of their brands sustain, Adidas, or for those in Europe, Adi das, the list goes on. Jane Walker, which is Johnnie Walker's sister brand, there are 1000s and 1000s of brands, Unilever is another one, who care about funding and supporting women entrepreneurs, because they're their customers. Like, I am a woman entrepreneur, I run an SMB, right? So I'm buying all the SMB products, like whether it's Intuit stuff, and these are not ads, but just like telling you what we use, like, we use MailChimp, we use QuickBooks, we use all the startup things that everyone else uses. But I also make all the purchasing decisions for my household and women make 80% of the purchasing decisions, so consumer brands want access to our highly coveted audience. And so do also brands like care about SMBs, like banks and the like. So we have this brokered grants product that is a completely data driven product that allows brands to tap into, not with advertising, with grants tap into their prospective customers. So really thinking creatively, we've just had to think super creatively about how to solve this problem, because the institutions are not seeming so interested in solving it, quite frankly.
Karen Cahn 33:55
I mean, it hopefully is getting better. I don't know if it is or not, but I mean, it's clearly not, we've gone backwards with VC. So that's the problem. In terms of what women can do, right? Like, because right now is actually the best time to be a woman and a bipoc entrepreneur. If you are a bipoc female entrepreneur, now is your time, my friend, Now is your time. Because, grants bipoc women entrepreneurs, bipoc is too inside baseball for a lot of corporations so grants for black women entrepreneurs, Latinx women entrepreneurs, whatever it is. There are so many companies that are doing grants and participating with IFundWomen who can help you, so in terms of just like if I was starting a business now and what I would focus on, the first thing I would focus on is having a product or service that strangers want to buy, have a product or service that strange want to buy. Because if you don't have that, you don't have a business.
Karen Cahn 35:03
And number two is, don't spend a ton of money building your prototype your MVP, your pilot. You can build a codeless app using bubble, again, none of these are ads, I'm just giving information, you can build a codeless app, you can use a Google Doc to find out what you need to know about whether people want your product. You can use Facebook, Instagram, you can use so many ways to figure out whether your problem is something worth solving and the product or service you're thinking about building may or may not work. So just don't spend a ton of money building your first thing.
Karen Cahn 35:45
And then finally, again, don't go it alone. Like come to us, we are going to help you. We have a very robust free coaching program where every day you can come and talk to a coach, you can come to our workshop, you can be in our Slack community, you can network with us, we've got so much free programming, that is no BS. It's not like inspo, it's not inspirational, it's actually like we'll scare the shit out of you but it will get you going. We're going to give you lists, we're going to give you a ton of things to do, but we're going to get you funded. And we're going to help you build a profitable sustainable business, which is the goal.
Scott Case 36:20
That's awesome. So we're gonna move to our lightning round. So think of these as answers in a tweet. We'll give you maybe two tweets, not toot sweet. So, first question up, is with crowdfunding do you have to be concerned at all about your product getting copied, ripped off, somebody else doing it?
Karen Cahn 36:40
The best question, okay, ahh in a tweet, I'm terrible at this. It's not in the idea. It's in the execution.
Scott Case 36:50
Pretty good. You got it in a sub tweet. I totally agree. It's about execution and more than anything else. I can hand somebody an idea, and they can't do anything with it, even if it's brilliant. But if you get a team that can get after it. And a lot of investors do. An A team with a big idea is much better than an A idea with a B team.
Scott Case 37:09
Are the majority of women going to IFundWomen pre revenue? Are they typically seed stage or does it run the gamut?
Karen Cahn 37:17
It actually runs the gamut. And we work with companies across the entire startup journey, literally from idea to exit. We've got probably an equal number of pre revenue startups and post revenue startups, startups that have raised their seed round are still with us. So it really runs the gamut.
Scott Case 37:40
All right, this one's gonna be a little harder. But have you been in a situation where your team's values started to, either with a partner or a co-founder, started to veer off or you started to split – and how far do you hold the line? Did you ever find yourself in a spot where you might have been tempted to compromise your values in order to accomplish some other objective?
Karen Cahn 38:05
No, and here's why we know what our number one northstar KPI is, which is funding volume for women. So if what you're doing, we call it What's my F J (What's my funding job?) If you're doing a task that doesn't map to our northstar KPI, you're not doing that task. So no.
Scott Case 38:31
That's great. Yeah, having a clarity of a goal and objective is really critical to it all. So I'll round out here. What's your number one pro tip for anybody out there trying to get their idea off the ground?
Karen Cahn 38:50
Just start. Start, just get over yourself, put your ego aside. It's going to be mortifying, you're going to feel uncomfortable, you're going to feel like you're going to want to puke every other minute. Just start and don't go into debt funding your startup.
Scott Case 39:08
Awesome. This was great. Thank you. Thank you. Thank you, Karen, for being here. And for what you're doing with IFundWomen. There's been a bunch of stuff in the chat, but IFundWomen because that was the $2.99 URL, so you should be able to remember that because it's what they do. And if there are people who want to volunteer or help, you said there's coaching I assume there's some places for people to sign up if they want to participate?
Karen Cahn 39:31
Yes. And I also want to make it clear that like we actually have a lot of dudes on the platform. Male and female co-founder teams. We actually just have dudes on there. We have men that we coach, we are not like a man hater club. We are open to anyone that wants help. Truly. So if you're guys watching this and you're like I want coaching, come get coaching, we will be happy to help you, truly.
Scott Case 39:55
Excellent. Very good. Well, thank you again for joining us.
Scott Case 39:58
Thanks for tuning in to this episode of Founders Focus. What did you think? You got any feedback for us? Got a topic that you'd like us to discuss, or maybe a future co host? We'd love to hear from you. Just hit me up on LinkedIn at T Scott Case. And join us at foundersfocus.com to stay up to date with the latest episodes. And join us live every week at our Founders Focus sessions. Hope to see you there