ANDE spoke to Jona Resphiti of MIT-D-Lab about the organization’s ANDE-funded project under the Advancing Women’s Empowerment Fund to better prepare female founders seeking capital and support investors in bringing more inclusivity to their practices, including impact of the COVID-19 pandemic on the project in India and an upcoming simulation of what it’s like to be a female founder trying to raise $5 million.
Tell us about your organization and the work you do to support small and growing businesses.
MIT D-Lab is a small lab within MIT that works with people around the globe to develop and advance collaborative approaches and practical solutions to global poverty challenges. One of the unique things we do is use the idea of inclusive, participatory design, including the voices of those that are usually disenfranchised or marginalized from development conversations, to design better solutions. D-Lab works in three pillars: academics, research, and innovation practices, our global practitioner arm in which I lead social entrepreneurship. I have been managing an experimental accelerator for SMEs and founders globally for about four years. We pick a big challenge and work with a cohort of entrepreneurs to unpack the barriers around that challenge and learn collaboratively to bring their voices into the solutions that come to the fore.
This is why the AWEF grant was a perfect fit for us. We focused our accelerator over the past year around the idea of bridging the gender financing gap. We asked questions like: how can we bring more inclusive accelerator programs that deeply engage the voice of female founders in how we deploy investment readiness programs? This grant allowed us to work with entrepreneurs and experiment with what female founders need to be investment-ready. How is their journey different in interacting with investors and the same organizations male founders do? How is their experience different? How do we need to design and think about that?
However, we didn’t just want to work on designing for female founders. So as part of our program, we intentionally built a codesign summit to work with investors. To make progress around the gender financing gap, we realized that investors have to be part of the solution; more specifically, we saw that investors are just as eager to jump and be more gender-inclusive but have few tools at their disposal. So we designed and delivered this codesign summit which brought together investors, entrepreneurs, and other stakeholders. We thought about how investors need to do sourcing, due diligence, and deploy their data in ways that make a difference in who they invest in and have more equitable outcomes for the ecosystem as a whole.
Tell us about your AWEF project and its theory of change.
We had two hypotheses. First, we realized we needed to work on the demand side of capital, the female entrepreneurs seeking capital. The question that we had with that is this: how can we better prepare female founders to be more aware, prepared, and resilient in tackling their fundraising process, particularly early-stage female founders that are just starting to get and look for equity funding to grow their businesses? Our theory of change was: if we can equip female founders with the skills, knowledge, and tools to tackle the gender-specific barriers that they face, in addition to the technical barriers, we can improve their fundraising experience and outcomes at the end of the journey.
Second, we looked at how we can better support investors, be more inclusive, and deploy better practices within their organizations to support women-led business and gender-forward businesses. Our theory of change around this was if investors have support and insights from diverse groups of stakeholders within the ecosystem to reflect in their own practices, and a community of support of other investors that are also very intentional about building gender-inclusive practices, then we will shorten their learning curve and allow them to more quickly reform and revise their processes in more equitable ways.
Tell us about how you’ve navigated COVID impacts. What were the major challenges? What were the silver linings?
Much of this work was focused on India, one of the countries hit hardest by the pandemic. There was a very drastic lockdown, as well a lot of human suffering. Almost everyone I worked with was affected. There was deep disruption to businesses and practices of how people connected and collaborated and what was at the top of mind for businesses and investors.
When it came to our work with entrepreneurs, we tried to be very aware of these disruptions. One thing we did was helping entrepreneurs realize what they needed to do and how they needed to pivot their businesses. Within our cohort of ten entrepreneurs, we saw a couple that completely revised the kind of things they were doing, like focusing on a different type of customer, changing up the services they were offering, or adjusting their profit model. We also helped them figure out what this meant in terms of fundraising, not just on the business side. We helped support them to fundraise, but we saw that in some cases, the best advice that we could give them was to take pause and keep building investor relationships, rather than charge ahead and try to get funding at times when their business was not as strong as it could be. This changed some of the programming and gave us pause to think about a human connection component and what our portfolio of entrepreneurs needs from us. How could we deliver the support that we had promised while creating space for them to air out some of these stresses they were encountering and allow them to work with them to be close with their teams?
In terms of the outcomes, we didn’t see such high levels of investment into the portfolio companies as we had hoped. Because of the situation, there was a little bit of a freeze on the readiness of both the entrepreneurs and investors. That is an outcome that was to be expected as a result of the pandemic.
On the investor side, there wasn’t as much disruption in what the investors were hoping to do. There was just a radical shift in the timeline. We were hoping to have an in-person, in-depth codesign summit with investors and other stakeholders in India. Instead, we had a five part, two-week intense virtual codesign summit. It was challenging because of things like Zoom fatigue, but we tried our best to make it an interactive experience.
One of the unexpected beneficial outcomes is that we were able to bring in a lot of global experts and gender lens experts from around the world (Switzerland, UK, Hong Kong, Singapore, Canada, USA, Guatemala, etc.). This made for a diverse and unexpected cohort of about 100 people who participated in the codesign summit. That kind of convening and cross-pollination of ideas would not have been possible if it wasn’t for the push to take it on.
Since we are a part of MIT, an education component is important to the project. We therefore worked on how we could capture and share our knowledge with other practitioners. One of the outcomes of this work with our entrepreneurs was to take all of this knowledge around the types of barriers female founders face and figure out how to foster effective conversations around these barriers. Women and ecosystem supporters need these opportunities to really talk about these barriers, and there’s not enough discussion around them.
One of the outputs we developed with the AWEF funding with our partner, Strategy Tools, is a simulation around investment readiness for female founders. It is an interactive experience where the user can enter and step into the shoes of a female founder trying to raise $5 million through a series of rounds. As the participant moves through the simulation, they encounter investors and many of the specific unique barriers women face: second-generation biases, challenges in accessing and utilizing networks, challenges around social obligations, and time poverty. During the simulation, the user has to grapple with and talk about how they would work through these challenges. The simulation is in prototype form, and we are eager and excited to get to look for partners and people who want to deploy this with their community of female entrepreneurs as well as others that might want to experience this mindset changing exercise.