Nurturing a Baby and a Start-Up Business
Michael Falco for The New York Times
By HANNAH SELIGSON
Published: June 9, 2012
FLEDGLING companies are like sticky-fingered toddlers. You’ve got to watch them every single minute.
And yet a small group of women is proving that it’s possible to start a high-growth technology company and have children at the same time. They are dispelling the image of the tech entrepreneur as a single, usually male, wunderkind. Consider Jennifer Fleiss, 28, co-founder of Rent the Runway, an online dress and accessories rental site with 2.5 million members. She gave birth to a daughter, Daniella, in December.
And there’s Carley Roney, 43, co-founder of the XO Group, a publicly traded media company valued at $300 million. Her three children range in age from 4 to 14.
Divya Gugnani, meanwhile, is the founder and chief executive of Send the Trend, an e-commerce site for accessories and beauty items that was bought by QVC in February. In May, Ms. Gugnani, 35, gave birth to her son, Ashvin. And the list goes on.
The average age of a first-time founder of a company is 39 — meaning that start-up life for some entrepreneurs is less about video game marathons on Saturdays and more about balancing parental responsibilities.
Ms. Fleiss, Ms. Roney and Ms. Gugnani all have husbands with high-powered jobs, so there are no stay-at-home fathers to take charge of their households. On the other hand, financial resources for child care are ample.
Yet much of the investment world, heavily dominated by men, remains skeptical about a woman’s ability to combine running a fast-growing tech start-up and motherhood, Ms. Gugnani says. She raised $3 million from investors before becoming pregnant.
“All of the women I know who went to raise money did it when they didn’t have kids,” she says. “There is total discrimination in the start-up world against women who are pregnant.”
Making pregnancy and motherhood a focal point of the investment process is an outdated way of thinking, she adds.
Female entrepreneurs are less numerous and raise less money than their male counterparts. Women make up 10 percent of the founders at high-growth tech companies, “and they raise 70 percent less money than men do because of their lack of access to capital,” says Lesa Mitchell of the Ewing Marion Kauffman Foundation, where she is vice president for initiatives on advancing innovation.
Ms. Roney says venture capitalists will assert that a female entrepreneur’s pregnancy and motherhood aren’t factors in deciding whether to invest in a firm — that it’s all about good ideas and the management team. “But I can pretty much guarantee you, behind closed doors it is a factor,” she says.
That is why, Ms. Roney says, “in those first moments of having a business and having a baby, the baby was a complete and total secret.”
At a start-up, which lacks much corporate infrastructure, founders typically do the jobs of at least five people. “The expectation of the devotion of your time, particularly if you are a founder, is that you should be doing this and nothing else — if you aren’t, you are not giving everything you have to the company,” Ms. Roney explains.
Ms. Fleiss was able to secure $15 million in Series B venture funding last year, shortly before she gave birth. If she had been pregnant as she pitched the company in the first round of financing, when it was still an unproved entity, she says she would have talked to mentors and advisers about how to present that fact.
Investors do need a full picture of a founder’s other life commitments, Ms. Fleiss contends.
“I don’t agree that men should be considered in the same exact context as women around aspects of raising a family,” she says. Certain factors like breast-feeding and body recovery require a women to take more time off, she notes. Ms. Fleiss took 10 weeks of maternity leave, she says, while her husband, Andrew M. P. Fleiss, a principal at the private equity firm Liberty Partners in Manhattan, took a week off.
Aileen Lee, a partner at Kleiner Perkins Caufield & Byers, the venture capital firm in Menlo Park, Calif., put it this way: “If someone was having some surgery that was going to put them out for three months, it’s something you should consider, with a man or a woman. What is the impact of having the C.E.O. or visionary out for three months?”
Ms. Lee stresses that pregnancy is not a red flag for her, and that she backs companies for the long run. Of her 11 portfolio companies, three are run by women with children, including Rent the Runway, Ms. Fleiss’s company.
LAST year, Paige Craig, an angel investor in 61 tech companies, said on the Business Insider site that “I’m probably going to get myself in a bit of trouble here” before he stated that “a pregnant founder/C.E.O. is going to fail her company.” He wrote the post after deciding to invest in a crowdsourced financing company called ProFounder, started in 2009. One of the founders, Jessica Jackley, he discovered before making his decision, was pregnant with twins.
Mr. Craig says he was confident in Ms. Jackley and wrote the post not as a rallying cry against investing in women with children, but to raise the question: “So I have this bias, let me dig in, and is it justified?”
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