We all know that women – and women of color, in particular – face discrepancies in investment and business opportunities. It’s horribly frustrating, but it can feel nearly impossible to solve. Here’s a solution: artificial intelligence or AI. This field may be the key to removing unconscious bias and finally putting your company on an equal playing field. Watch our interview with Lauren Washington of Fundr and read on to learn about her bias-free investment firm, what she wished she’d done differently at the beginning of her career and why you need to promote yourself more.
From virtual assistants to automated cars, artificial intelligence is transforming our lives. How can it change the world of startup funding? The industry desperately needs a new look – Black women founders have only received 0.34 percent of venture capital so far this year. Lauren Washington, Co-Founder of Fundr and Black Women Talk Tech, wants to remove the biases that hold companies back.
Fundr connects startups with investors with a process built on AI. Companies apply and take an evaluation to determine their “Fundr score.” The algorithm collects more than 90 pieces of data to predict how much the company will be able to raise. From there, Fundr matches the companies with potential investors on the platform. Normally, raising capital takes months or even years. But because of this standardized process, companies receive funds in a fraction of the time. It makes it easier for investors to build a diverse portfolio and for founders to get back to running and scaling their businesses.
“The startup funding industry is built on warm introductions. It’s built on access and who you know,” Washington said. “Even if you get into the room, there are so many biases that come into play. Most of them are unconscious. It’s not purposeful. It’s not intentional. We all have them. To go through a process where you can remove that bias and truly just look at the merits of your company and what you’ve been able to build over time, that’s really exciting.”
Foundations of Fundr
To bridge the gender and racial gap in funding, many platforms turn toward crowdfunding. But this is a Band-Aid solution to a wider problem. Instead, Fundr removes the chance for bias and presents company profiles solely based on their performance and funding potential. It democratizes the process from start to finish and creates better results for everyone.
Sound complicated? Washington agrees.
“This is a huge undertaking,” she said. “But I’m so passionate about this area, having been an entrepreneur and investor for many years, and I’ve seen the funding gap. We’re addressing it in an impactful way to change the access, ability and efficiency sides to fundraising.”
Hesitations to adopting AI
This approach is unique. Adding AI assistance has “raised some eyebrows” from others in the industry. Washington says that there are two kinds of reactions. Some get it immediately. At this point, AI is used in almost every industry. Others say, ‘no way.’ How can you trust a program to do what you do?
Washington points out that the number-crunching is the same, whether it’s done by investors or artificial intelligence.
“There’s a school of thought that says, ‘There’s no way an algorithm can do what I do. I have the magic touch, and I know how to pick these startups’,” said Washington. “They just don’t feel like there’s any room for quantitative analysis. The truth is you’re doing that kind of qualitative analysis in your head, especially if you’re a seasoned investor and you’ve been doing this for a long time. You get used to the patterns that you see, and you’re building an algorithm in your mind. Now, we’re taking that, putting it on paper and creating access for other people to use it as well.”
What drives her?
Washington has always been interested in making a positive impact on the world. She grew up volunteering in soup kitchens and watching her parents run their own businesses, encouraging a sense of independence. She wanted to help other people – but it took time to find her path.
Washington’s career is what she calls “varied.” She worked for Teach for America as a special education teacher, studied marketing, went to business school and built a data analytics department at an advertising agency (a new field at the time). This led her to start her own company on monitoring social media. She won the 43North startup competition but found herself struggling in terms of funding and guidance.
That’s when she connected with founders Esosa Ighodaro and Regina Gwynn to launch Black Women Talk Tech, the largest conference for Black women entrepreneurs and tech founders. Washington helped create the resource that was missing when she started her own business.
“We met and said, ‘Let’s have a conversation. Let’s see if we can support each other in this.’ And it just exploded,” she said. “At the time, no one was having these open, vulnerable conversations about what it’s like to be an entrepreneur who doesn’t necessarily fit within the industry and doesn’t have role models within the industry. We were truly trying to create a safe space to have these conversations so that we can all move each other forward.”
Advice for other entrepreneurs
Washington has plenty of wisdom for other entrepreneurs. Her main piece of advice? Don’t work yourself to death. Productivity doesn’t equal the number of hours spent working. In fact, she says that she has her best moments of inspiration when she’s away from work.
“There’s this idea of working to burnout with 120 hours a week every week, and I don’t subscribe to that. Taking care of yourself is so important. The entrepreneur world, particularly the tech startup world, doesn’t emphasize that enough. So, I’ll give you all permission to do it!”
Her second tip is to promote yourself – relentlessly.
“Women are afraid to promote themselves. Obviously, there are social and societal reasons for that. It’s been ingrained into us not to do that. But in this industry, it’s everything. You really have to promote yourself. Who else is going to? It’s okay to share your accomplishments. It’s okay to boast a little bit and brag a little bit. Because that’s what people are looking for in terms of building these investments. They’re not going to know how great you are and how great your company is unless you tell them.”