In Conversation with...

In Conversation with... Julia Elliott Brown, Founder of Enter The Arena

In Conversation with... Julia Elliott Brown, Founder of Enter The Arena

Wednesday, 05 June 2019

Julia Elliot Brown is a serial entrepreneur, experienced businesswoman and funding coach. 3 years ago, frustrated with the lack of support when she was raising funds for her own company, she started Enter the Arena, a business aimed at guiding female entrepreneurs through the process of funding their business. We talk to Julia the complex issue of diversity in the investment space, what makes women so great at running businesses and how to get male investors take tampon start-ups seriously.


You started Enter the Arena in 2016, but how did you career start out?

I started my career working in the investment banking sector, looking after big clients like Deutsche Bank and Morgan Stanley. I worked there for about 4 years but in 2000 I felt there was so much exciting going on in the start up sector and I wanted to go and work somewhere where I felt I could make more of an impact so I went to join as Business Development Director, that was where I cut my teeth in the startup world.  I love it and I was hooked.


When did you make the move from Corporate Director to Entrepreneur?

I decided to set up my own business which was a consultancy, which was all about helping other companies get online - as it was still early days of the internet. As part of that I worked for a small VC where I was helping them look at interesting companies in the digital space that they might want to invest in and advising on that and working with their portfolio companies. This was my first foray in to the investment space.


You then set up a business with your sister - can you tell me about that?

Upperstreet was a fashion tech company that allowed you to design your own shoes online. We knew nothing about shoes, fashion, production but both of us very entrepreneurial. My expertise was all about digital publishing and my sister Katie, who was based in Hong Kong at the time, was very good at running operational business. She had also been working in investment banking for Morgan Stanley so we had both come from big corporate backgrounds. We went about building our dream from this whole idea of wanting to design our own shoes, launching Upper Street in 2010.


Did you have any mentors during this time?

We didn’t have mentors, but we had each other which was really important. Both of us were very experienced business women, so we had a lot of experience in corporate and start up space, we had been used to running teams. What we understood really well was that there was a lot involved in making this business work and that we didn’t know about most of it! So we knew we had to bring in experts in each area – and that was our strength. We found a shoe designer, we found people that could deal with production,  we found a fashion PR company and tech company. We were good at bringing people together and leading.


How did you fund the business?

We funded it ourselves for the first few years and it took off - we always wanted It to be something big, we didn’t want it to be a  lifestyle business. Our aim was to grow into an internationally successful business, so we launched it with a big PR campaign. After that, we got a bank loan, then we got some Angel investment, then some VC investment, then crowdfunding - the first fashion brand to do so - so along the journey we kind of did it all. I got really good at fundraising but it was hard and I made a lot of mistakes along the way.


Upperstreet was very successful in its own niche but ultimately we struggled to get that business into the mainstream as quickly as we needed it to be. In 2016 we decided to close the door on that business and that was a joint decision between us and our investors. For us it really felt like ‘Go Big or Go Home’ and we just couldn’t see how the business was going to get where we wanted it to be.


What do you think were the barriers to success?

There were a lot of things with that business that were structurally difficult to overcome. Bespoke is hard, footwear is hard. People want to know that their shoes will look as they do on the screen, they want to know that they will fit - and people ask themselves whether they want to wait 3 weeks for their shoes when they can pop down the high street and get something pretty good.


How did the fact that you had investors effect that decision?

When you get VCs on board its very much that you have to scale quite fast and if you don’t it’s tricky for the VC to support you. Once you have one VC who won’t support you it’s hard to get other VCs to back you. It was the right thing to do the close the business. It was an amazing journey, we had a great time and we learnt a lot. It was a shame but it happens to many companies and you shouldn’t be afraid of failure.


After closing Upperstreet you started coaching other businesses on how to get funding - how did that come about?

The transition between Upperstreet and Enter the Arena was actually really obvious. When I closed the doors on that business it was tough because it was my baby. I was thinking ‘what will I do now?’ but I knew I was passionate about the start up industry. It 's where I wanted to stay but I didn’t have an idea for a new product. However, one of the things I got really good at over the years was raising funding for that business and I had some many of my peers – women entrepreneurs - come to me and ask for my advice on how to raise. I had always been happy to give that support and advice and I realised there was something in this because I never felt like I had that advice. I had to fumble my way through it and make loads of mistakes. I had learnt so much I knew that there was a need for the kind of support that I wish I’d had.


Why didn’t you have any support?

It was a mix of things. With fundraising there's a lot to it, people would give me nuggets advice about certain aspects of fundraising. There was a lot of men in suits mansplaining things to me in a patronising way, and a lot of advice from people that hadn’t been entrepreneurs themselves and I found it frustrating. There wasn’t someone I felt was on my side who could support me throughout the whole campaign. Also there was definitely not that many female role models out there so I felt that was something I could provide - guidance from someone who had been through it. A lot of support I saw out there was very technical but not focused on you as an entrepreneur and your mindset and confidence. Those softer skills are essential in going out there and getting the money needed to grow – I  didn’t see that.


When it set up Enter the Arena I didn’t know where it would go. I wanted to help women particularly, I felt we connected better and they appreciated that I was a woman and wanted to address the issue that there aren’t enough women out there starting and scaling their businesses.


What’s been interesting is that over the last 3 and a half years i've seen this issue of funding and female entrepreneurs move from people talking about it and writing reports to people wanting to take action. And for me with Enter the Arena  it's been fortuitous timing as I was there before the conversation has come to the front


What progress points have you seen?

In the investment community people are very aware of it and are becoming conscious. Not everyone is going to do something about it but some people are actively looking at how they interface with female entrepreneurs, what does the makeup of their own team look like – that is being looked at and progress is being made. We’ve seen a lot more female focused funds popping up but there is still a long way to go. And I think more role models are needed and a lot more events and networks focused on women. I think some of these events are really genuinely good, some are lip service but there is a recognition at all levels including the government of the huge potential.


Do you think that the economic argument for female entrepreneurs has made investors realise this isn’t simply a moral issue?

The economic argument is the right thing. Diversity makes great business sense. There is still a long way to go and it’s going to be a long time before we get to parity and I think we need to be actively making changes - the market isn’t going to self correct. I would like to see more legislation around the industry having to publish its data like with the Gender Pay Gap because we have a Gender Funding Gap and I would like to see some mandatory reporting around this.

Aside from gender, do you believe other minority groups are affected when it comes to getting investment?

Age is a big diversity issues in the start up scene. There is still a focus on the straight out of Uni whizz-kid, when in reality the average age of entrepreneurs is 40, with a family. These people can’t necessarily be there networking in Silicon Roundabout over beers every night – and they don’t want to do that either.  There are issues from people of other minorities too. The whole Female Founder thing is ticket of the moment but we need to be looking at the whole diversity piece. It also impacts people from different social backgrounds, if you haven’t gone to university that could potentially count against you, if you’re meeting with investors and you don’t have a plummy accent. We’ve got to be looking at it from all aspects.

On your website you discuss the myth of Female Founder Syndrome - can you tell me a bit about this?

It’s a complex issue but the last thing you want is for it to become a self fulfilling prophecy I think if women go out there thinking I’m going to be discriminated against then you're going to go in with the wrong mindset. There is a perception that women are risk averse, which is simply not true, we're just risk aware. Women certainly like to have all their ducks in a row before they go off and do something and we don’t like to claim we can do something unless we’re totally sure that we can.

I definitely see that there are issues with taking bigger risks, asking for more money, really going for it even when you’re not quite ready and there is a little gap that women need to leap there. However, women are proven to make a great investment, we don’t bullshit on numbers  and what we can achieve, so we deliver on what we say we’re going to deliver and were open honest communicators.


Do you think investors are becoming more aware of these positives?

Yes, but it’s about overcoming their initial unconscious bias. There’s definitely some issues around the questions that get asked of female entrepreneurs. It’s subtle but some serious training is needed in the industry. I don’t think people are aware but if they were made to be aware of how they're protecting that unconscious bias it would make a huge difference in the industry.

My job is to bust those myths for female founders. Yes you might read all those reports about the issues female founders face but that isn’t going to necessarily hold you back if you go in with the right approach and you’re prepared. I think what’s interesting is when I’m speaking to women who have successfully raised finance, it’s almost 50/50 of those who have experienced no issues as a female founder and those who have.

Do you see any clear differences between those sets of  women?

The women that don’t experience problems generally come from a male dominated industry – banking, STEM – and are used to being a woman in a man’s world.I think it can be more challenging if you’re a creative entrepreneur that is building a very female focused product. Sometimes it’s not so much about gender but about different worlds coming together and then needing to learn the language you need to speak. That’s the challenge rather than necessarily gender.


If your product is female focused, what’s the best way to secure funding from male investors?

You have to be clever at finding a way to connect with male investors when you have a female product, it's about using your head and your heart. To do that you need to have plenty of stats and evidence to prove the potential for the product that you have and the size of the market. You also need to show that customers love what you do. Then you also need to find a way to connect with their heart. When speaking to someone that wouldn't be a consumer you need to help them step in to your customer’s shoes and empathise with why someone might want what you’ve got.

I don’t mean to speak meanly about investors. It’s the same with anybody - you want to invest in things that you feel comfortable with so it's very easy for a male investor to invest in a sports brand or a wine company because they get it instantly. When you ask them to invest in a tampon business they just feel like they don’t know enough about the industry. They might ask themselves - ‘Can I connect with it? Can I add value?’ Maybe not – so it does take a larger leap of faith.


Is this why it’s so important that we see an increase of female investors?

It’s massively important, You’re starting to see changes in the institutional investment world, venture capitalists firms are starting to bring a lot more diversity in at the bottom of the pyramid, at a junior level, but it’s going to take a little while before the women get to Partner level. I think for a woman entrepreneur to know she can make that initial connection with a female VC, it makes it so much easier, its less intimidating, you can relate to each-other.


In terms of female angel investors I think there’s a long way to go. For women who are high net worth individuals, it’s still not always on their radar to be investing in venture and there's a lot of education that needs to happen.


The whole angel investment industry has traditionally been very male dominated, it's been Angel syndicates where business is done on the golf course and it's a hard industry to connect in with as a woman. There is an education piece needed for women who have made money through corporate careers or entrepreneurial ventures to encourage them to put their money back in to venture.


Crowdfunding is really democratising that access, it’s great! I make investments through Crowdfunding because its just so brilliant, you can do it from home on your sofa, rather than going to an investment dinner where its a load of men in suits doing some chest beating.

Why do you think crowdfunding is so popular for female entrepreneurs?

Crowdfunding is the most popular process for early stage funding for women and the success rate for them is really high. For crowdfunding to work you need a product people can understand and get behind, so it suits consumer products really well. You also need to be able to bring your own tribe in for it to work and women often have businesses that have really great loyalty and networks outside of investor networks that they can bring in. To be successful at crowdfunding you have to run it like a military operation and women are really good at that!

Are there other options you would recommend?

It’s not the only route, if you want to scale fast and need a huge amount of funding then you may want to look in to VCs. If you want very patient capital and you want to keep the round private then working with Angels directly can be a better route. It's really important to understand the whole investment landscape and the different options. It’s also crucial to think about what is best for you, not just this round, but how much money you may need over the whole journey and how does it all tie together. Ultimately it’s about your vision and keeping the value in your company You don’t want to make decisions about how you raise money now that might shoot in the foot later.


What advice would you give to women starting out and assessing their funding options?

You have to start with your vision - where do you want to take your business  in 7 years time and work backwards from there, otherwise it’s like getting in a car and not knowing where you’re going. You might drive around and around and then end up driving off a cliff! Know where you are going and stick to it -  you might take a few scenic routes along the way but that's ok!

Your coaching business is thriving - what are the common issues women come to you with?


I think women are brilliant at knowing what they don't know, so a lot of the female entrepreneurs that come to me are saying ‘I think I've got his brilliant idea and I think I  want to raise money but I’m not sure and I've never done this before so can you help me?’


Many come saying ‘I need some help finding investors’ but we have to rewind because there’s not point speaking to investors unless you've got a really strong proposition and you've communicated it well - you need to give the idea justice. I help them make sure their business strategy is spot on and put it together in the best way possible. I say to them ‘Let#s make sure you’re asking for the right amount of money, that your valuation is right, that your pitch deck is right - then let's talk about going out and speaking to investors.’


It sounds like preparation is really key to the whole process?


Preparation is huge.  I always see it as four steps - strong offer, get the communication right, investor outreach and then how to have meetings with investors and get commitment from them and each of those steps needs to be right. It’s like a combination lock on a suitcase and you need the 4 numbers and if you don't have the 4 numbers it isn't going to unlock. You can speak to 100 investors but if your pitch is weak you're wasting your time - and the last thing you want to do it waste time


You coach women at various different stages of the entrepreneurial journey - do you see any common themes?  


Definitely around confidence and getting ducks in a row making sure that you do it properly - that is the message that is coming through. It is a very competitive world and you hear a lot about how much money there is in the start up sector and people are saying ‘it’s easier than ever to raise money’ and I don't think that's true. Yes, there is lots of money, but there is a lot of competition. Investors get sent hundreds of decks and emails and have meetings with hundreds of entrepreneurs and very few get through to funding. It’s actually only 2% of people that get funding anything you can do to get in to that 2% is worth doing, but it’s not simple


You’re a mother and a business owner, and as you pointed out earlier, many entrepreneurs are also parents. Do you think this is ever a barrier to getting investment?


I don't think it puts investors off but they will ask questions around it and its contentious -  but I am of the view that its valid to ask entrepreneurs about their family situation - but they need to make sure they are asking the men that question too!. When you're investing in an early stage business the founders are so integral, so you need to be confident that they have the support around them.


The reality of it is the childcare does predominantly fall to women - especially in the first year and it’s valid to ask about that and, as an entrepreneur, you need to think about how you are going to manage that. Your business is your baby and then you get another baby on board. Those questions will be in people's mind and we shouldn’t be afraid of them - we should embrace them and ensure we have support around us.


Do you think Investors are more considerate of work life balance nowadays?


Investor community are starting to really take a look at this now. The key is being mindful investors and making sure the entrepreneur’s wellbeing is being looked after and recognising that it’s no longer about the entrepreneur working every hour and sleeping under their desks, there's more to life and I think the world is moving towards having more balance - which is great for women and men.


Mental wellbeing must also be a key consideration during the fundraising process?


If it isn't bad enough to run a business and a  family, layer on top of that fundraising and it’s enough to kill you. That's something I feel really strongly about. I didn’t see a lot of that in the early years - being encouraged to look after your wellbeing, keeping you sane, keeping you motivated, keeping you strong when you have the knock backs and making sure you don't overdo it. I always tell my clients, ‘take a day off, you're not going to perform well in investor meetings if you've not had enough sleep so don't spend the whole evening working, it's counterintuitive’ and that's the sort of advice we need to be given women.


Do you think women in particular can fall victim to burn out?


I feel as women we often feel like we have to do twice the work to get the same results and we tend to work ourselves into the ground - do a days work, get the kids to bed, more work - and that's not always the best way to work. You need to set boundaries and work efficiently and get help from people who have done this stuff before. You shouldn't be spending more than 3-6 months on a fundraising campaign. Some people spend 2 years trying to get their money and in the meantime their business has been neglected and they are burnt out.

Finally, what would be your top piece of advice for women thinking about fundraising?


Confidence is key There are lots of women that have a really great businesses that for one reason or another just need a bit of a boost in confidence for fundraising. Networking is also an important part of it. It’s proven that you are 13x more likely to get investment if you have been introduced to that investor rather than going in cold.


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