Female Beauty Founders Talk Navigating a Male-dominated VC World

Last month, Marcia Kilgore raised a $100 million round for Beauty Pie. Earlier this year, Amy Errett raised $52 million for Madison Reed. Nyakio Grieco raised $1 million in a friends and family round for Thirteen Lune, and Babba Rivera raised $2 million in seed funding for Ceremonia.

These founders are among a group of female beauty entrepreneurs who have waded into relatively new territory — the male-dominated venture capital world — to secure the money to grow their businesses. Broadly, women remain severely underfunded by venture capitalists, data from Pitchbook shows. And only about 4.9 percent of U.S.-based VC partners are women, according to a report by Women in VC.

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So far in 2021, female founders in the U.S. have raised $6 billion in 575 different VC deals, according to Pitchbook. It may sound like a lot, but that figure represents a small fraction of the available capital. In 2020, female founders raised $4.3 billion in 686 deals — only 2.9 percent of the total VC raised that year, and proportionally less than women had raised the prior year, when 4.5 percent of VC dollars, about $6.3 billion, went to female founders, according to Pitchbook.

While Kilgore, Errett and others have found success raising VC money with the right investors, the process often includes added complexities for female entrepreneurs, and can sometimes be tinged with bias. VC checks are often written by men who aren’t well acquainted with the beauty category, which means founders must often do extra explaining in pitch meetings. While several beauty founders interviewed for this story said they had a hard time raising from women VCs, and wound up with primarily male investors, instead.

Errett — who has worked on both sides as a beauty founder and a venture capitalist — acknowledged that there is frequently difficulty explaining the beauty category to male VCs. “The relevancy to a guy, or the understanding of the emotion or underlying thesis of the business, is not as easy to explain as it is to a woman investor,” she said.

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Female beauty founders who have successfully raised have advice for fellow entrepreneurs: Look out for the red flags, which can appear in many forms, from the paperwork to interpersonal exchanges.

While fundraising, Rivera, the fashion influencer and entrepreneur behind Ceremonia hair care, found herself in a conversation with a man who advised her not to have children during the first five years of her business, without knowing that she was in the early stages of a pregnancy, she said.

“The question of do you have kids, and if you should or shouldn’t have kids, I don’t feel like that’s ever been on the table when it comes to being a male founder,” said Rivera, who now has a young daughter and a fast-growing brand.

Another potential investor offered to handle business operations so she could do “the fun stuff.”

“That was so sexist. I don’t know what makes him think that I don’t think business is fun. I’m an entrepreneur. I’m a businesswoman. I love business,” Rivera said.

Jules Miller, founder of The Nue Co., had one prospective investor who flaked on meetings, and once stood up her team during due diligence at a lab. “This person did not value our time, and really did not show any respect for us,” Miller said.

Tina Hedges, founder of Loli Beauty, was told she had “too much experience.”

“That was their attitude — that you had to be young and inexperienced to have that vision and the wherewithal to disrupt the industry. I’m 100 percent sure there was gender bias in there as well. It was my age, and it was my gender,” Hedges said.

Diarrha N’Diaye, a Glossier veteran, saw her former colleagues successfully raising money for their pre-launch businesses, but wasn’t finding success raising capital for her own, Ami Colé, in 2018. “I couldn’t help but think it was because of [prospective investors] not having proximity to this cohort, which is women of color,” she said. She raised $1 million in funding from Imaginary Ventures (cofounded by fashion entrepreneur Natalie Massenet) and high net worth individuals, and launched the brand this year.

Founders also advised fellow entrepreneurs to make sure they retain control, and not to let investors demand board seats and control over decisions like hiring and product development.

Odile Roujol, a former L’Oréal executive turned VC investor, said she supports entrepreneurs targeting funds with a history of beauty investments and partnering with firms who can help them become profitable. She also advises female founders not to be “shy” with presenting financial figures. “Be realistic, but at the same time, show your vision,” she said.

Kilgore, who just secured what she describes as an “optimistic and generous valuation” with her $100 million Series B, advises founders to partner — and keep partnering — with VCs who are really behind them. “If you have somebody who is such a great partner to you, and they’re really doing everything they can to see you succeed and help you and support you at every turn, you can certainly go and look to somebody else, but better is the enemy sometimes of good.”

The fundraising climate has evolved, even over the past few years.

Back when Grieco was trying to raise capital for her prior business, Nyakio Beauty, more than a decade ago, she said getting into the room with investors was “a challenge, even after having a proven concept of a successful beauty brand.”

She said she sees progress today as she fundraises for her retail concept Thirteen Lune, but that navigating the web of VCs who have pledged to dedicate funds to diverse founders can still be difficult.

“It can still be quite challenging when it comes to larger, traditional VCs,” Grieco said, adding that there is often “confusion” around how those funds are being dispersed. “When I really dug in to pitch my idea or try to get access to that capital, it’s still pretty limiting,” she said.

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