There is a now a considerable body of research suggesting that women and minority startup founders have a tougher time raising venture capital than their white, male peers.
For example, according to research by ProjectDiane in 2018, black women founders have received just 0.0006% of the $424.7 billion that has been invested into startups globally between 2009 and 2017.
The shameful statistics have prompted promises from venture capital and big tech to invest in more female staff and fund more minority entrepreneurs.
Business Insider spoke to Crystal Etienne, the founder of period-proof underwear and swimwear startup Ruby Love, about this funding gap and her journey to date.
In July, the New York-based firm finalized a $15 million investment from The Craftory, a London-based investment house known for investing in challenger brands. According to Ruby Love, this is the third-biggest fundraise by an African-American female entrepreneur. And yet even Ruby Love's successful raise highlights how little funding is available to minority entrepreneurs like Etienne.
According to TechCrunch, the average size of a Series A fundraise in 2018 was $15.7 million. In other words, one of the largest Series A fundraises ever for a firm founded by an African-American woman is barely half the size of a typical Series A fundraise.
Speaking to Business Insider, Etienne said venture capitalists often didn't take the time to listen to black women founders — but also that female entrepreneurs needed to be proactive about getting into the industry.
Q&A with Crystal Etienne, founder of Ruby Love:
This interview has been edited for length and clarity.
Charlie Wood: First things first, could you tell us a bit about your early life? Were you a born entrepreneur?
Crystal Etienne: I've just realised recently that I've always been an entrepreneur – the way I think, and everything. So I would answer that as 'yes.' I always wanted to be better. I didn't have a lemonade stand, but I've really been an entrepreneur since I was about 6 or 7.
I grew up in a co-op in Flushing [in Queens, New York City]. There used to be a tree outside the building, apples – well, I don't know if they were apples, but they were apples to me at the time – used to fall off the tree all the time.
I knew you could eat them, whatever they were. Instead of letting them fall off the tree, I [decided] to bag them up and take them to the end of the parking lot, and sell them. I used to sell them for $5 a bag. To this day, I don't know what they were selling and what they were eating. [ laughs]
CW: What about tech, and femtech in particular? When did you first develop an interest in it?
CE: As far as being interested in femtech is concerned, it was just a few years ago. When my daughter was younger, I realised that, as a competitive swimmer, it used to bother me [when] I used to see young girls who were not able to get into the pool, because they were physically unable to put a tampon in.
It wasn't because they didn't want to. It was because their bodies physically couldn't. Some of the mums would get very upset, because they wanted their daughters to be able to win, or at least to swim. They would try to provoke [their daughters] to do it. That's something that a mum cannot do. It bothered me.
I knew that one day, if I had the chance, I could change that. So [femtech's] always been at the back of my mind. It was just in 2015 when it really stuck, and I was like: 'I'm going to do something about it.'
CW:You recently secured a $15 million Series A fundraise led by The Craftory investment house. Did you pitch The Craftory proactively? Or did The Craftory approach you asking to invest? How did the fundraise play out?
CE: The Craftory actually contacted me; Elio [Leoni Sceni, The Craftory's cofounder] actually called me one day. I was speaking to a bunch of investors [and] was about to get a bunch of term sheets.
I actually thought [Elio] was one of the investors who was trying to be interesting. He actually called me; that's how the investment started off. At first, I thought he was one of the other investors, but after 10 minutes, the conversation took off.
CW:It's a burgeoning industry, of course, but why do you think femtech hasn't yet received as much large-scale investment as it could and probably should have?
CE: Because I don't think it's been taken as seriously as it is [serious]. Femtech's fairly new as we know – it's maybe only a couple of years old.
Now [VCs] see the demand [for femtech]; they see that women did want change but didn't know how to say it. I think it wasn't taken as seriously because it [deals with] issues women do not talk about.
With pretty much any situation in the femtech space, it's something people do not talk about. You're talking about menstruation; if you're talking bout bladder incontinence; if you're talking about fertility – these are things that we keep on the hush as women. No-one knows how big of a problem it is.
CW: According to research by Harlem Capital, your recent $15 million fundraise is the joint third-largest fundraise of all time for an African-American female entrepreneur. Why do you think certain races, genders, and socioeconomic backgrounds remain underrepresented among the CEOs of firms that receive the largest investments, both in tech and more widely? Who's primarily responsible for such a state of affairs?
CE: I think [responsibility] lies on both sides. I think the VCs definitely need to get their act together. Sometimes they don't even give [minority groups] a voice or even a chance to say things. They're listening, but they're not listening.
Then, on the other side – say, black women in the [femtech] space that I can speak upon. I think we just need to know that if that investor isn't right, there are other people out there. Instead of thinking about the investor, just know and believe what you're working on.
If you know and believe, and you have a demand for [your goods or services], investors will come, because I didn't scout anyone out. They started scouting me out. I had a bunch of investors come to me. Just as The Craftory came to me, I had a bunch of investors who came to me wanting to do deals.
I wasn't scouting them out. I had already wasted my time trying to raise money over a two or three week period, at times. It was a waste of my time – I needed to focus on my product and my business, and that's what I did.
Once I did that, the demand for my product just went up, and I guess VCs see that with the research they do. My company started [appearing] in case studies with my competitors. And something like that is something you just can't ignore.
CW: In terms of women in the tech industry, as opposed to femtech: what do you think needs to be done to get more women into tech jobs?
CE: My [approach] would not be to get more women into tech. I feel like women should get themselves into tech more. Just from my experience, when I first started [in tech], I would go into a room, and there would be a handful of women.
Women used to be afraid to speak up; to say 'my company needs $40 million dollars.' We used to ask for $400,000, whereas you'd have the guys standing there, all confident, saying 'give me $400 million.'
I think that women need to start thinking bigger. I had the same issue. I think that that's starting to end now. We're starting to own our space. I think that we're just more confident in a different way. We're not more up in your face.
I think it's starting to be shown now. It's like we want to prove it, and say 'I told you so.' But I think we just need to think bigger.
CW: Do you think the big tech firms care about the diversity of their workforces as much as they like to portray?
CE: They're just paying lip service, I believe. I think they're doing it [to] just try and save face, but they keep it in the background because they don't want to hurt themselves.
A VC will never burn their bridge with someone. I'm a good study for it. [VCs] don't want to burn their bridges with you, but they expect more from you. So when that 'more' comes, they will reach out.
So I think [Big Tech] is paying lip service. It's kind of like a catch-22: they're trying to save face; they want to [employ more black women]. But they don't want to do it, and they're afraid to do it, because there's not enough studies out there to show that black women can do it.
But, in reality, black women can do it, because black women know how to run a business. When we put our minds to something, we know how to really take it and really make it our own. We do that with everything, not just with business. When we believe in something – and I think history has shown [this] – when we believe in something, if you look to the forefront, it's actually a black woman.
CW:Do you particularly admire or attempt to emulate any other tech firm, whether or not it's a direct competitor of Ruby Love's?
CE: Spanx. I just think what [Sara Blakeley, the founder of Spanx] did was so beautiful. She took people who were ashamed of their bodies, and made them openly say 'I'm wearing Spanx.' You can openly walk into one of her stores, or just have a conversation with someone, and say 'I'm wearing Spanx.'
You're not afraid to say 'I have weight issues, or I'm obese, or my thighs are too big, or I have rolls on my stomach.' You became able to say – and feel good and confident about it – 'I have my Spanx on.'
I think that's a beautiful thing, to deal with body contours, which was a big issue years ago. Now it's just spoken about freely, with no problem. I think the period space will get there also. I just love what she did so beautifully with her company: to make you feel good.
CW: Do you have any particular ways of operating that mark you out as a CEO?
CE: I'm very direct, but not in a rude, nasty way. I'm very direct, but you know where I'm coming from, because I have stuff in my head all day long, as I'm sure [is the case] with every entrepreneur or founder.
There's so much stuff that goes on in your head as a visionary, and as a creative, all day long. So I'm very direct in what I say.
CW:Are you aiming to expand the range of products Ruby Love offers, and turn it into a femtech firm more broadly?
CE: Not at the moment. We're fully focused on period apparel and puberty in every single way. Whatever that gives in the next couple of years, who knows? But right now, I think our products alone are just very broad and welcoming to people. We already have a lot we deal with at the moment.
But I'd never say 'No.' Like I say, there's a million things that go through my mind every day – even [on] the day that I thought of the idea for this company. So, I don't want to say 'no', but at the moment? No.