This year, for every 100 businesses that receive venture funding, only 2 of those businesses will be founded by women. And believe it or not, this is progress. Women are creating businesses at record rates. Venture is not keeping up.
At soona, our founding team is two dynamic, young women. Our dreams are big. We don’t believe this issue is simple. It’s complicated. But as an industry, we have dismissed this stark data with lazy ideas that can be summarized as women somehow refusing or not asking for financial support. We believe there is a more insidious dynamic at play. And it’s time we talk about it. Take action. And pass it forward.
Introducing the Candor Clause
The Candor Clause is an open-source legal disclosure for inclusion in fundraising documents to foster conversations between founders and investors about gender equality. The disclosure requires all parties to disclose if any of the investors, members of their fund or their representatives have ever been accused of sexual assault, sexual harassment or sexually-inappropriate behavior.
As soona announces its own successful series seed fundraise, we are opting to open up this clause in conjunction with the raise, so any founder or investor, male or female, can begin to set a new tone for their relationships with one another.
Why Did We Create the Candor Clause?
This all started with an unfortunate personal experience and a conversation with our attorney.
Raising money as a 20-something or 30-something woman without much power or financial strength from largely successful, powerful men is not easy.
In reducing it to its most fundamental feeling, I would describe these conversations as vulnerable. As founders, it is essential that we have dialogues with digital strangers about topics we are all a little squeamish to discuss: our dreams, our money and our relationships.
When a founder and investor are in the process of developing a relationship, it’s natural to feel close because of this exchange. Who wouldn’t feel close to someone when discussing your vision for the future and all the incredible people you are doing it with?
It’s easy to paint a picture of sexual harassment in startups as a set of creepy investors hanging out waiting to launch their bodies at unsuspecting women. This is not how it goes down. Instead, it can feel really innocent. It can feel like two people forming a relationship. Because it is. However, for male founders, this relationship is collegial and supportive. With female founders, it’s not unsurprising that it can FEEL like there is an open romantic door when there is not.
As a female founder, I show up as my whole self every day. Big voice. Lots of passion. Total commitment. Incredible amounts of love for the work, the people and the process. When I experienced my most recent incident of sexual harassment, I know that the individual involved felt like he was “just flirting with me” because of the closeness that had developed in the process.
Vulnerability is a requirement of ASKING FOR HELP. Fundraising is always an ask. And because it is a deeply vulnerable ask, it attracts all sorts of human beings.
Many of whom are brilliant, generous, thoughtful people.
But, it’s also a great place for people with unsavory intentions to proliferate. The result? We believe it creates far too many opportunities for overreaches. Bluntly: by overreaches, we mean sexual advances that are unwanted, unwarranted and unreciprocated.
For years, we have relied on pledges, tweets and think pieces to move this conversation forward. As a team, we were frustrated by our lack of autonomy and empowerment in the process. We felt it was critical that we all move past internet speak and toward action and consequences.
Why We Need Men
This is not a female founder issue. This is a startup community issue. It serves our entire community for good ideas to break through, get funding and grow. As we started ideating on this concept, our male attorney was one of our first advocates in his firm. His decision to champion the Candor Clause and seek permission for us to make it a free tool is why you are reading this today.
This is just one of many examples of how bold men, choosing to step forward, can have an impact on the entire community.
If you want to see the startup world and venture world flourish…
If you want to see more billion dollar companies…
If you want to see more innovation…
You will use the Candor Clause in your fundraising documentation.
You will have a Candid Conversation with your investors, your cofounders, your team and your community about why gender equality matters to you.
And you will invite others to be part of the dialogue.
It sounds incredibly simple, but often the simplest answers are the truest ones: No business can flourish from idea to IPO if its founding team is not capable of focusing on its core mission. The mental, emotional and physical toll that these issues cause can and do have impacts on the bottom line.
A Note of Praise
As a female-founded team, we are proud to be the first startup to step out and do something like the Candor Clause. But we could not have done this without male champions.
Specifically, we want to thank Natty Zola at Techstars Boulder and Matchstick Ventures for ideating on the concept and being open-minded and excited. His enthusiasm gave us the courage to keep moving forward.
We also must give a special thanks to our lead investors, 2048 Ventures and specifically, Alex Iskold. During our very first conversation over chai and a term sheet, we presented Alex with the Candor Clause. Alex’s embrace of the concept gave us the champion we needed to bring it to the rest of the investors in our round.
And finally, to Charles Ciaccio at KO Law Firm in Denver. His tireless efforts to ensure that the Clause had teeth and was broad enough to protect founders will have impacts for years to come.
Any founder can use the clause by downloading it at candorclause.com