Home Venture Capital Opinion: Blackbird-Kiki debacle no surprise to women-led startups

Opinion: Blackbird-Kiki debacle no surprise to women-led startups

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If you’ve been following the Kiki debacle – and who hasn’t, we all love a good trainwreck story – you could be forgiven for thinking you’d accidentally turned on an episode of Silicon Valley.

20-something boys start a company. 20-something boys get given millions. 20-something boys can’t make business model work. 20-something boys meet their first girl and pivot to … *drumroll* “A WOMENS ONLY CLUB FOR THE GIRLIES OF NEW YORK”.

It’s legitimately concerning how much this reads like satire.

While women have (rightly) been mocking the news online, the venture capital firm behind the company, Blackbird, has been notably quiet. We’ve all been waiting with bated breath to hear what they have to say. When it finally arrived, what we got was an apology for how the pivot was announced (which, while annoying, is not the actual problem), followed by paragraphs of defensiveness about how they’re actually doing a good job and why can’t we all just be grateful for that?

“Since Blackbird started deploying our 2022 core fund, we have invested in 22 companies, and 23% of these have at least one woman founder.”

Let’s leave aside the fact that they notably funded 11 male-led companies in a row, and instead calculate that 23% of 22 is five. Five companies that had at least one female founder. Of those five companies, the number with only female founders? Three. How many of the product offerings from these ventures are primarily aimed at women? None.

Because when all-women leadership teams pitch products for women, the data tells us: they don’t get funded. And that’s our real canary in the proverbial coalmine.

Half the population is just too niche

Blackbird – and other VC firms – crow about creating equality by having an equal number of women in high level roles, but at the end of the day every woman who has ever worked in any organisation knows that an equal number of women in particular roles means nothing if the company culture still has a single definition of value.

Every woman I know who has pitched a product predominantly aimed at women has heard from most VCs – if not all – that the product is ‘too niche.’ As though a total addressable market of 3.95 billion people is … small?

This is why women founders are infuriated by this story. It’s not even that a group of boys in their 20’s have the gall to start a “women’s only club”. It’s that if an all-women team stepped into the room with the same idea, the very people who funded Kiki would offer those women mentoring instead of money.

Blackbird went on to say:

“Our virtual mentoring program Giants coaches more than 400 founders every year, 55% of which are female. 50% of the startups in our deep tech focussed incubator program Foundry have a woman or non-binary founder. Our sister company Startmate runs the Womens Fellowship to help women career-pivoting into startups, which has directly resulted in 376 women getting a job in startups or VC or founding a company in the 3.5 years the program has been running.”

These kinds of programs are an easy out for organisations – they talk about them being ‘pathways’ – but the reality is over the last five years, VC funding for women-led companies worldwide has either gone backwards or is completely stagnant.

The percentage of VC funding for women worldwide:

  • 2019: 2.8%
  • 2020: 2.3%
  • 2021: 2.4%
  • 2022: 1.9%
  • 2023: 2.8%

Net gain in 5 years: 0.0%

These programs aren’t pathways. They’re dead ends.

There is, of course, an easy answer to this problem. If you want more women to get funded, give them the money. It sounds so simple, because it is. And I’m also aware it won’t happen. This problem is endemic. Across the board, women are given platitudes instead of positions. Mentoring instead of money.

Men are allowed to fail, women aren’t

It ties back into a prevailing, perverse concept that the issue is simply women lack confidence. It has become a way to subtly build a narrative where the issue isn’t a lack of access to resources, but a lack of women’s willingness to ask. This narrative allows organisations to skip over taking any kind of meaningful action and instead of actually promoting or funding women, to pay (often male) motivational speakers to lecture us on how we can do better.

In rooms full of women founders, I’m hearing this consistently – women are looking to bootstrap. They’re trying to figure out how to grow without the system. As someone who did exactly that, I support it, but I also understand the limitations that come with bootstrapping. Business is a cash-hungry machine – growth is hindered when you’re limited to cashflow in order to feed it.

Add in the proposed changes around who qualifies as a sophisticated investor (the new rules would count out a large percentage of women who currently qualify, and currently women rely on other women for angel and seed investment) and we’re heading towards a catastrophic disaster. Not just for women leading startups. But for the business ecosystem and, by extension, society as a whole.

A couple of years ago I spoke with someone high up at an Australian VC firm who insinuated the reason women weren’t getting funded was that they weren’t applying.

While it’s impossible to know the exact numbers across the entire industry, estimates show us about 34% of pitches have a women-led team. If we adjust the 2.8% funding percentage to account for the application split, even at a 1:1 ratio women are literally half as likely to get funding. Those numbers took me about five minutes to do with Google and a calculator. Of course the industry is aware of them. Once again, it’s just more convenient to blame everything on women’s lack of confidence than to make any kind of real change.

VCs can gloat about how many women they employ but the real story is in the numbers, and the numbers don’t lie. The needle either isn’t moving or, when it does, it goes backwards.

The choice I’ve made, like the choice I see many other women founders moving towards, is to divest from a system that’s hostile towards me. I have a life rule about only staying in places where my presence is celebrated, not tolerated. And certainly not dismissed.

Bootstrapping is a part of this – and so is women coming together to support each other, whether that’s financially or with partnerships. I, for one, refuse to participate in a system that demands I beg men for a 2.8% chance to grow my business. Because raising money shouldn’t come at the price of your self-respect.

It certainly doesn’t for men.

Leela Cosgrove is the founder and CEO of training and education company Strategic Anarchy and sales tech company Iron Cage

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