This VC closed a $21 million fund this year and saw 4,972 deals. Here’s what she looks for during a pitch

As the founder of Halogen Ventures, a women-focused venture firm that closed its latest fund at $21 million this year, Jesse Draper knows a thing or two about reading people. Since launching the company in 2016, she now has 60 portfolio companies — backed by private equity firms. Last year, the fund attracted 4,972 deals (companies that want to be funded) alone. In other words, she knows how to pick a good melon.

Halogen Ventures exits include:

• Squad App (acquired by Twitter)
• ThisisL (acquired by P&G)
• Eloquii (acquired by Walmart)
• The Skimm (with GV)
• Hopskipdrive (with Greycroft)
• Carbon38 (with Footlocker)

So what does this fourth-generation venture capitalist look for during a pitch, especially on days where she may see 50 different teams try to pitch their great idea for a company? Is it a magic word? Certain body language? Draper sat down with Ladders News and explained what she looks for in a person trying to get an investment for their company.

No Debbie Downers

“I look for pure optimism. I can’t handle the negative nancy syndrome at all,” she said. Though Halogen is female-focused, Draper has and invests in companies with a male co-founder. She’s noticed that male entrepreneurs, often come in presenting a more positive outlook (misguided as it may be), but their confidence can be a selling point.

Even when female entrepreneurs have a detailed presentation deck and a strong deal flow — meaning a good team, huge market potential, great products, market validation, and growth strategies — they often simply won’t sell it the right way. “Women come in and they pitch us the same company as the male CEO and the women will come in completely prepared and be like ‘It’s a $7 million valuation.’ But the man will be like ‘It’s a $15 million valuation. We don’t have a product or a deck but it’s $15 million.’ So how did we get to $15 million? But they are just so confident!” It is fake-it-til-you-make-it, in its purest form.

Draper sees this when women are negotiating for higher salaries as well. “They will try to fundraise for $500,000 when it needs to be at least $1 million,” she said. “If you ask for that little, it is going to cause you trouble because no one is going to bet on you without 18 months of runway. They need a bigger miscellaneous category. Women don’t ask for enough when they are fundraising, in their salaries, and they are constantly apologizing.”

The confidence gap

Of course, Draper knows how to tell if someone pitching is trying to hide something, but she finds that confidence can go extremely far and continues to be a strong contributor to the investment gap female entrepreneurs face. According to Crunchbase, in 2019, 2.8% of funding went to women-led startups and in 2020, that fell to 2.3%. The confidence gap is real and it is hurting women.

The women Draper does invest in all tend to have a single quality in common: “They take criticism incredibly well. They thank you for the feedback. They take nothing personally.” She also noted they are willing to get down to the nitty-gritty. “When you have a 15-person team and have to cut back to seven you have to be willing to get the dirty work done.”

Draper wants women to be more confident because they are profitable. In an article for Medium last year, she wrote about the potential lucrative payoff of investing in women. “It is a strategic move that allows you (and me) to invest in founders and leaders who build billion-dollar businesses like Spanx, Sprout Pharmaceuticals, Cloudflare, Stitch Fix, Eventbrite, Care.com, SunRun, Houzz and I could go on…. It’s a way to invest money in businesses that will exit faster for double the return. It’s a way to take advantage of wide-open spaces many other VCs can’t (or won’t) see. It’s a way to get in on consumer products that are poised to capture the imaginations of the people who make up the majority of household buying decisions.”

The numbers are there. Private tech companies with a woman at the helm achieve 12% higher revenue than startups led by men, according to the Kauffman Foundation. One study on a US-based global network of accelerators that works with startups found that VCs could have made an additional $85 million in just five years if they had invested in as many female-run startups as male ones.

How women can get more confident

So what can women do to be more confident during pitches?

1. Sell the dream. As Draper said the women are too conservative and modest with their projections while the men really sell it, even without all the numbers to back them up.
2. Own your value. Women who do have all the research and a strong market outlook need to own it during the pitch and be optimistic.
3. Stay calm. Draper says if you need to take a beat during a presentation that is OK. Even start over if you feel like you are going too fast. She knows it is an intense time so breathe and take your time.