From the stats showing women don’t negotiate as well as men to the reality that we still don’t get equal pay, the fact is women have to get better at asking for money….their own money
At one of my 7×7 Mentoring Salons we put the question on the table:
Q. How do you price your product / services?
A. More than you probably are now.
“The more you charge, the more they respect you. A client thought the rate I quoted was my hourly rate rather than my project rate (which is what it was) and said yes. I can’t tell you how respectful they were. It was insane.” – 30-something entrepreneur
“Make it a round number and say it with force behind it. Then shut up.” – 40-something entrepreneur
During the same evening a 20-something entrepreneur seeking funding asked the question:
Q. What is the line between bravado vs. conservatism when projecting your growth?
A. The actual numbers in your projections don’t matter. It’s the idea that counts in early stage. Just show them that you understand the numbers and that they reflect belief in your idea. .
“Anyone that writes you a big fat check is going to do it because you have a killer idea and you deliver on what you say you are doing to do. They like where you are trending. They believe in the idea…the market. They are going for it. They know they projections are bullshit.” -40-something entrepreneur
“You always wan to under-promise and over-deliver. Always. You do not want to over-promise and under-deliver in the marketplace.” – 40-something entrepreneur
“Most VCs cut the numbers in half.” – 40 something founder
“Know how the numbers track. When you are pitching VCs or angel investors, they know they numbers are inflated, but they want to see if you know how the numbers track and that you can make decisions about money. – 40-something entrepreneur
“I was at a seminar for angel investors and they all said that they take the entrepreneur’s model and cut all the numbers in half and that floored me. I thought at the time…I put those numbers up there because they were totally backed up. Then my guy friends told me they always make the best possible number.” – 20-something co-founder
This got me thinking. If investor “patterns” are based on mostly male founders, then that suggests that men inflate their numbers by at least 100%.
If men are known for high-balling and women are known for low-balling…we are cutting our projections by a quarter. It’s not surprising that women-run new ventures are often perceived as lower in value.
Food for Thought:
To raise the profile of women led start-ups, should we all increase our projections by 50% in the pitch stage?
If guys are inflating their numbers by 100% and investors are cutting all projections by half and not realizing a gender discrepancy, all they see is that the average guy led start-up seems to add more value to the party. If on average women tend to be conservative and guys tend to be more optimistic, then women are in effect being low-balled by 75%.
Do the math:
- A guy projects $1MM.
- Investor cuts to $500K
- A woman’s projection for similar startup would be $500K
- Investor cuts to $250K
Not a pretty picture. Of course this is just an example, but what do you think? Should we even the playing field? At least know you have some room to play and you probably are low-balling!