Mergelane Blog

Broadening the On-ramp for Women-run Companies

Announcing MergeLane's First Anti-theme: Founders Who Dislike Authentic Feedback

Being a venture capitalist means saying “no” often.

The frequency of the declinations we make at the MergeLane Fund – which invests only in startups with at least one woman in leadership – is daunting. It’s just more fun to say “yes.” When I do say no, I try to remember that my “no” is purely subjective, and often my “no” to someone can turn into a much more meaningful “yes” for that person down the line.


The ratio of pitches to investments can produce a bit of fatigue, and I worry at times whether my lens is too negative. Because having a set of “themes” in which a fund invests can allow startups to better target their fundraising, my partner Elizabeth Kraus and I have grappled with whether to specify investment themes. We’ve avoided it in part because our gender requirement reduces our deal flow by about 60%. 


In a pitch meeting with a startup today, the CEO asked me what kinds of companies we like to work with. I said that we invest in great people working on interesting problems in big markets. That’s too general to be a theme, but it’s not without boundaries.

Lately, I’ve been thinking that we really ought to craft “anti-themes;” business areas we definitely will not invest in. With our gender lens (although it’s not that restrictive), we tend to see a lot of the same kinds of companies more often: platforms for selling used baby accessories, concepts related to women’s health at different life stages, etc. None of these is a definite “no” for us; however, I do get weary of the repetition.

Whether I’m hearing a pitch in a one-on-one meeting or as part of our 15-company monthly Quickpitch events, I try to give quality feedback, acknowledge that my feedback is subjective, and endeavor to be kind. Good listening and quality feedback are central to our focus on Conscious Leadership at MergeLane.

In one call today, I worried that I missed the mark. I opened the call as I usually do, asking the CEO to tell me about the company and how she came to found it. This leader was smart and thoughtful. I was impressed with the command of her business.

I just couldn’t get that excited about the business. 

At the end of the call, she asked for my thoughts. I said I was worried that the opportunity might not be big enough, and therefore I doubted the company could produce venture-scale returns. This is pretty common rationale for a no, but it’s a drag when you’re giving it to a very compelling leader.

I offered one more thought: “You’re clearly a superstar. Given that you’re still very early on this project, I might suggest you sit with the question of whether this business is the biggest version of your vision.

That comment led to a fusillade of explanation and defensiveness. The call ended abruptly, and I began to feel that I’d disserved this entrepreneur by telling her what I really thought. I had a rush of serious self-doubt, but then I returned to what I feel to be true. I wanted to share that here.

First, I routinely deliver authentic feedback. I do not gloss over my real impressions to make conversations easier.  One entrepreneur recently gave me this feedback about my style when I worked with him and his co-founder on their internal dynamics:

It's easier to polish the surface than excavate the messy, rotten roots. But that work is so important because the rot is what kills. You're the best I've seen at noticing the mess, inviting it, and sitting with it.


Of course, I don’t go that deep in an initial call. I don’t spend my entire life excavating rot, but I am really good at listening carefully and offering my thoughts based on the experience I’ve had. I’m not always right, but I’m almost always honest.
Second, I began to wonder today about the temptation to soft-pedal feedback to women or other people who might have a more difficult time raising money. Please trust me: this is EASIER. We have a happy call. I ask some decent but not-that-probing questions. You ask your questions. We hang up. I send you an email two weeks later saying we’ve decided to pass because [insert generic reason here]. 

I realized today that I think that’s a tremendous disservice to companies, especially when those companies are led by less-privileged people in the venture ecosystem. Those people need quality feedback more than anyone in order to quickly strengthen their fundraising muscles. Let’s say you give feedback that an idea feels small. Perhaps they’ll stick with their plan. Perhaps they’ll knock it out of the park. Perhaps discerning feedback will cause a reconsideration that will pay huge dividends. Perhaps they’ll stay with their plan, have a failure, and remember the next time to try something bigger.

I don’t know.

But I decided today that I’m going to continue to provide the kind of feedback that I believe is most valuable. I’m going to do this even at the risk of being unpopular.

In this episode, I inadvertently stumbled on our first anti-theme: If you prefer not to hear authentic feedback from an investor in real-time during a pitch, please don’t ask to meet with us. 

On the other hand, if you’re the kind of entrepreneur who relishes hard questions and loves outside challenges from people who provide them after careful listening and with little attachment, we want to talk to you. 

Entrepreneurs often ask investors what they contribute to the companies they invest in. 

Here’s our new answer: MergeLane gives authentic feedback. We take the time. We tell you the truth from our perspective, knowing you can take it or leave it. We regularly hear from portfolio CEOs that they do not get our level of feedback from any of their other investors. So maybe – just maybe – that is enough.

Want to learn more about how conscious leadership can be a game changer for you and your team? We want to tell you.

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