Venture capital investments are at record levels. With end-of-year investments rolling in at the beginning of 2022, over $612 billion in venture capital activity was invested globally in 2021—a 108% increase from the year before. But for women-led businesses and startups, they have yet to see their funding rise at the same pace.
According to Female Founders in SE Asia 2021 report by DealStreetAsia, startups founded or co-founded by women in Southeast Asia bagged $4.43 billion in funding last year, accounted for 17.2% of all private capital raised by startups in the region, up from 16.5% in 2020.
However, startups founded solely by women raised $159 million, a mere 0.6% of the total funding bagged by private companies in 2021. In comparison to a Pitchbook report, sole female founders in the US secured 2% of all venture capital in the same year, the smallest share since 2016.
To better understand the challenges that women entrepreneurs face in accessing capital, Connecting Founders engaged with several female founders who have shared their unique journey raising capital.
The best way to describe the first impression with Marina Tran-Vu is probably how she describes her business — bright, colorful, and quirky.
Marina is a sole female founder of EQUO, a Vietnam-based sustainability startup providing solutions for everyday single-use plastic items. With a strong mission to rid the world of damaging plastic, EQUO debuted its drinking straws made from coconut, grass, rice, and sugarcane that are 100% plastic-free, biodegradable and compostable.
A ‘Pandemic Baby’
Launched in February 2020 with her own savings, Marina — a proud Vietnamese Canadian — started EQUO with an inspiration to raise Vietnam’s profile as a leader in sustainability and innovation. In a country known for its coffee, Marina had explored a multitude of cafes across Vietnam and found herself dealing with either plastic straws, soggy paper straws, or metal straws that required constant cleaning. That’s what prompted her to develop her first EQUO product — the grass straw; a single-use, biodegradable, non-soggy straw.
To validate demand for her product, Marina launched a Kickstarter campaign in April 2020. On the platform, she created a mini online store for the pre-sale straws hoping to raise funds from early-adopters and bring her ideas to life. Within 3 days, EQUO had made $9,000 in sales of straws. Inevitably, as soon as the pandemic lockdown came into effect globally, her sales went off the cliff next to $0.
Marina ended the campaign on Kickstarter after several weeks, having raised a total of $15,000. In hindsight, she wished she had understood better how to leverage the platform and spent more time actively campaigning her products prior to attempting any sale.
Re-positioning the Business
By the last quarter of 2020 EQUO nearly ran out of money as restaurants, coffee shops, casinos, and hotels kept shutting down. Coming close to her last straw, Marina realized that she had to raise more money to stay afloat and went on to educate herself about the startup community in Ho Chi Minh, and the different options to raise capital such as angel investors, venture capital, institutional investors.
Following a friend’s suggestion, Marina re-positioned EQUO as a startup, instead of a small business, to be able to access accelerator programs. In April 2021, Marina joined TechStars, one of the most prestigious global startup programs, making EQUO the first Vietnam-based company to ever being admitted into the accelerator.
During the 4-month period of rigorous training, Marina was paired with investors who helped refine her business model and build a strong pitch. “They could have just left me in the dust, since I really had no clue about startup”, Marina said, “but instead, they were very supportive in connecting me with a lot of people who later became my mentors”.
She delivered her first online pitch at the end of the program and put EQUO back in the game.
Securing Venture Capital
In April 2021, fresh in the TechStars program, Marina launched EQUO’s fundraising campaign, admittedly, without a clear target in mind. What ended up being an 8 month-journey resulted in a $1.3 million in seed funding led by NextGen Ventures with participation from TechStars and East Ventures.
The funds went into operation and gave the business a real chance to strive amid the COVID-related hardship. From selling only wholesale, EQUO products now reach retailers in Vietnam, Singapore and Europe, while also available on Amazon in the United States, Canada, and Australia. Marina said she intends to use the funds to further expand her product line into utensils and dishware, deepen their technical capabilities, and increase brand awareness and exposure globally.
This experience has taught her the importance of having a proper strategy and goal in mind before embarking on a fundraising journey and being well prepared to face investors’ questions – how much to raise and by when, what funds will be used for, strong revenue projections, and a defensible valuation.
As a Female Founder Raising Capital
The biggest issue Marina had to battle as a female founder were stereotypes and expectations about what a ‘successful female CEO’ should look like. In Vietnam, she explains, female founders are socially conceptualized to portray seriousness and maturity in order to run a business. For someone like Marina, who is young with pink hair and a quirky personality, it can be difficult for investors to take seriously.
It is unfortunate for female entrepreneurs in Vietnam, she said, as the environment hinders the growth of young talents just because they don’t look a certain way. On top of that, Marina said female founders are often asked personal questions about marriage and plans to have children. Though the answer bears no relevance to their businesses, it can determine whether they get the funding or not.
But instead of being apologetic for who she is, Marina put her game face on and worked on building connections with people who align with her visions, not how she looks. “Find a community, people, mentors, and investors who will actually look past your appearance and believe in your ideas”, said Marina.
Read more from the Female Founders Raising Capital series: Finance is a Friend