Gendered Ventures

A Q&A with Mara Zepeda, the CEO and co-founder of Switchboard

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Tiny coverLiquidity events. “Money shot” revenue graphs. Seed funding. Do the all-male metaphors in venture capital reveal something about the culture of startup funding? That’s the provocative case Portland tech entrepreneur Mara Zepeda makes in a February essay she co-authored on

Zepeda’s five-employee company, Switchboard, provides a community-building social media platform that colleges use to connect students and alumni. But her sustainable-growth vision for the company fell on deaf ears in pitch meetings with venture capitalists hunting for the next “unicorn,” the elusive billion-dollar tech startup. That got her thinking about a more female-friendly way to fund startups.

To find out more, Oregon Business met up with her in Switchboard’s office at Revolution Hall.

OB: What’s been the reaction to your manifesto in Medium?
MZ: We heard from hundreds of founders who were in a similar situation, stuck between wanting to create a profitable, sustainable business and needing the capital to do that, and not being the right fit for venture capital.

: Did you have an alienating experience approaching funders for your business?
MZ: Welcome to my world. People are pattern-matching animals, so there are certain industries and certain types of founders that venture capitalists are excited to fund. And we all know what those look like traditionally. And there are other founders whose businesses or personal profiles don’t align with the pattern of venture capital success, and they end up not being funded. I and my friend Jennifer Brandel, who had this startup in Chicago, had both experienced this challenge of feeling frustrated that our business models and our vision weren’t being understood by predominantly male venture capitalists who were in a position to help our companies grow.06 Sex Tech 27

: Why in tech is it so important to have venture capital as opposed to the more traditional bank loan or personal financing?
MZ: A lot of companies in new industries aren’t bankable. They have a hard time getting traditional financing and small business loans. Maybe the founders have been in business fewer than two or three years. Maybe their industry is, ironically, too high growth. But primarily they aren’t able to put up the collateral or the personal guarantees necessary.

: How many pitches did you go through?
MZ: I’ve kind of lost count. I’ve had dozens of meetings at this point.

: And has anybody said, “Yes, I’ll back you”?
MZ: We’ve had to be really thoughtful about the kind of company that we want to build. When you raise venture capital, what you’re doing is looking for an exit, so you’re not intending to build a strong, sustainable, profitable, Oregon-based business for the long haul.

: What do you mean by “looking for an exit”?
MZ: They’re looking for an exit in one of two ways, usually: Go public with a new IPO — and that happens to a minuscule number of companies — or get acquired. If you get acquired, chances are the company that’s acquiring you is outside of Portland. Perhaps you sell to Facebook or Yahoo. It’s good for you and your investors, but fundamentally it’s not good for Oregon’s [business] ecosystem, because you haven’t created more jobs, you’re not paying into the local tax system. It’s not fundamentally a winning proposition to have acqui-hire after acqui-hire. [An acqui-hire is the acquisition of a company primarily for the skills and expertise of its staff, rather than for the products or services it supplies.

Who’s being left out of the current venture capital system and why?
MZ: There are two constituencies that are being omitted: The first is the people who get venture capital. There just aren’t enough women and people of color who are being funded. What else is being omitted? Other financing instruments. What does it look like for a group of women founders or people of color, or people that don’t want to build unicorn companies? If they got together, what would their term sheet look like? So companies like Chroma [], right now they’re doing the Barclays startup accelerator in New York. They’re starting to ask very compelling questions, saying that the credit model we have, especially for small-business lending, is outdated. I think that’s going to be something really exciting moving forward, the space in between venture capital and small-business lending.


OB: You came up with quite a few examples of masculine metaphors for the business.
MZ: It’s an ejaculatory model. It’s one where everything is skewed toward quantity, not quality. You’re trying to throw a ton of money at as many companies as possible in the hopes that one will win, which is similar to a biological metaphor that all of us are familiar with. On the other hand, you could have something that might be slower growth but sustainable, which is another metaphor.

OB: Where you might nurture and nurse and raise it?
MZ: Exactly. And we’ve seen just a phenomenal amount of success with these types of companies. Women are the fastest-growing sector of small-business owners. Look to the developing world and see the returns on micro-finance. Women are really good at building those types of companies. There has to be a balance between quality and quantity. We can’t only continue to try to fund potential unicorns.

OB: When you published the piece and got this huge reaction, did you hear from venture capitalists?
MZ: So many people in the industry said, “I can’t share this with anyone, but I’m sick of it.” What people don’t realize about venture capital and about pitching is it’s all speculation. You’re spinning a story. Founders go into a meeting with investors and show a slide [with a projected growth graph] that’s up and to the right. It’s a hope but it’s not realistic. We heard from a lot of founders who were tired of having to spin that narrative when it felt so much more comfortable to be truthful. There’s not a space for truth right now in venture capital.

: Any sense that the culture might be changing?
MZ: We’re working on it. To your point about small business loans, we think that might be the future and a really good place to start — to come up with creative debt instruments for women. There’s a group of women founders right now that is working to put something like that together — a women’s debt fund. You could almost think of it like domestic microfinancing. It’s a way to help women scale and grow their businesses, holding one another accountable and focusing on sales and marketing milestones that are so critical for business sustainability, which ironically often gets overlooked if you’re a VC-backed company, because your eye is on the next raise.

: As yet, you haven’t had an arrangement with a venture capitalist. So you’re still self-funded?
MZ: No, we raised a small round two years ago from an institutional investor called Collaborative Fund. They’ve been phenomenal, and they’d be the first ones to say that they’re in this game to build long-term sustainable companies, which is a really unusual thing to hear from VCs, which is why we were so well-aligned with them.

: What’s it like to be a woman in a sector that’s so male dominated?
MZ: This industry still has a lot to figure out. What it comes down to for me is: There’s an inherent power dynamic in asking men for money. All the women founders I know have horror stories. It’s not sexism. It’s not any type of salaciousness. It’s the frustration of not having people understand your business model, because you’re solving a problem differently. That’s the frustration I hear the most with women in tech. They have a certain way they solve a problem. A lot of it has to do with customer success and happiness and retention, and recognizing that building a sustainable business means investing in that customer and getting a referral. That might not be the way that a man would build that company, but it doesn’t mean it’s invalid.

A version of this article appears in the November/December issue of Oregon Business.