Joanna Griffiths was in her third trimester of her pregnancy with twins as she began meeting with potential investors in her intimate wear company, Knix Wear. The entrepreneur had one rule: She wouldn’t take money from anyone who questioned her ability to lead the fast-growing startup either during her pregnancy or after she became a mom.
That litmus test didn’t hurt her ability to find investors. Griffiths said she ended up raising about $40 million, topping her initial goal of $25 million to $30 million in new funding. Griffiths told CBS MoneyWatch that she came up with the exclusion because she wanted financial backers who share her values about women’s empowerment, a theme that is a cornerstone of Knix, which features models of all shapes and stages of life ranging from pregnant women to older women.
Female company founders face an “unspoken rule” that they shouldn’t try to raise outside money while they are pregnant, she added. “There’s a very important distinction between asking questions as part of a dialogue around, ‘You know — what’s the plan, who’s going to be our point of person during the early weeks’ [after giving birth] — versus flat-out questioning my ability to make decisions and to ensure that my business is covered,” said Griffiths, who is the founder and CEO of Knix.
Griffiths added that she heard some negative comments from potential investors and directed her bank, Robert Baird & Co., to exclude them.
“I had one group say, ‘Oh, like who wants to be the last money in before she goes off and gives birth to her twins?'” she recounted. “It’s 2021, and if someone feels comfortable saying those sorts of things out loud with where the world is today, they are just not in line with the values of Knix.”
The Toronto-based company’s latest venture round was backed by investors including TZP Group, Acton Capital and model Ashley Graham. Knix, which was founded in 2013, is profitable, Griffiths told CBS MoneyWatch. The company said its revenue will soon exceed $100 million.
“It’s all the more important she took the stand she did because it’s not about her — it’s about every other woman who raises money after her,” said Leslie Feinzaig, CEO of the Female Founders Alliance, a startup accelerator that helps women raise venture capital.
Feinzaig also noted that Griffiths was raising money for a company that’s already successful and growing, while most women are raising funds for businesses without much of a track record. At that early stage in a business’ development, women often face bias that men aren’t as likely to encounter, which can inhibit their ability to attract funding, Feinzaig said.
Entrepreneurs “fund raise purely off of people’s belief in whether we can do it or not,” she noted. Too often, that belief isn’t awarded to women or people of color, she added.
Different standards for women entrepreneurs
Despite Griffiths’ success in raising money to help fuel Knix’s growth, only slightly more than 2% of venture capital went to startups with female CEOs last year despite women owning almost 4 in 10 U.S. businesses, according to financial data provider Pitchbook.
Female entrepreneurs also often face different types of questions by investors than they ask of men, with women quizzed about the potential for losses while men are asked about the potential for gains, according to the Harvard Business Review. And investors are more likely to press women on whether they’re ready for common business challenges, Freada Kapor Klein, a partner at Kapor Capital, CBS MoneyWatch.
Knix tapped into a desire for authenticity from consumers at a time women are especially overwhelmed by caregiving and facing stress from setbacks due to the pandemic, noted Erin Gallagher, the founding partner of Have Her Back Consulting, a gender equity consultancy.
“She handled the capital raising in the way her brand is positioned,” Gallagher said. “She’s paying attention to the zeitgeist, post MeToo, post ‘time’s up.’ Women are saying the system isn’t built for us, and it is actually stacked against us, so if we don’t expect different things from businesses, we will still be here in 10 to 15 years.”
Griffiths said male startup executives with children on the way are much less less likely to face questions about family obligations potentially interfering with growing a business. Families with dual-earner couples often have childcare, ranging from nannies to daycare, and that needs to become more common to help eradicate bias against women with children, she said.
“The other thing we need to start to normalize is paternity leave, and that parental leave can be shared,” she said. “Men don’t get asked these questions because it’s almost unexpected that they are going to take paternity leave, but household dynamics are changing.”
The Biden Administration is pushing for a national paid family leave policy, which would require employers to provide up to 12 weeks of paid leave for medical and family reasons. But even when companies offer paid parental leave, most men don’t take much — just 10 days or less. Reddit co-founder Alexis Ohanian told CBS This Morning that he took all 12 weeks of his paid leave because he wanted to set an example for his employees, especially men.
The $40 million in venture capital will allow Knix to grow, ranging from opening new retail locations to expanding the company’s message, Griffiths said. Knix has two locations in Canada and plans to expand to the U.S., including a location in Santa Monica, California.
To male investors with biases against women, she said she has advice: “How many great opportunities are they missing out on because they hold these outdated views? There are lots of reasons to do some really hard thinking, read a couple of books and start to change.”