If you started up in an emerging industry, how do you get investors to understand what you do and why it matters?
It’s a question Claire Tomkins asked herself when she launched a fertility business in 2016. Her San Francisco firm, Future Family, connects hopeful parents with fertility services, and breaks down the whopping cost of IVF into more manageable monthly payments.
She says there are trillion-dollar opportunities in this market — especially for women, who can bring personal passion and experience to fertility-related products and services they develop. But when you start up in a less understood, less popular industry, “part of your time is still about educating the market” about the need for your business in the first place.
So what did she turn to, to make her case? You may be surprised by how simple the answer is: “We had data.”
Indeed she did — like the studies that show the fertility market is expected to be worth $36.2 billion by 2026. There is also the fact that, as of 2014, more than 8 million babies have been born worldwide through IVF since the first “test tube baby” was born decades ago.
[Related: The Story Exchange on Women Medical Entrepreneurs]
Yet when she launched, “there were a lot of questions about market size and [growth] opportunity, and particularly about infertility.” Those questions were borne, in part, from the male investors’ collective lack of personal understanding for what these treatments can be like — intimate knowledge Tomkins, who has personally undergone IVF numerous times, refers to as “product intuition.” At best, male investors could only learn anecdotally about how the experience affects women’s bodies and minds, and why her services were a necessity.
To be sure, she adds, the dialogue has advanced rapidly in the last 3 years. But in 2016 she was facing an uphill battle, and chose to arm herself with “as much data as possible.”
And it worked. Tomkins estimates that her venture pulls in “millions” of dollars in revenue, and it has received over $110 million in investments to date. Her most recent fundraising round, held last October, raised $10 million. It was led by Aspect Ventures, and backed by iNovia, BBG, LaunchCapital and others.
Of course, there are other important points to make and angles to try during such a pitch, she says, like emphasizing the ways in which your products or services are universally relatable. The scope of Tomkins’ firm, she points out, “does reach beyond just the female experience.” If it’s not the male VCs themselves attempting to start families, they know family members, friends or colleagues who have struggled to have children. Still, “I do think it’s a real challenge for female entrepreneurs when the audience, the investor, doesn’t share that product intuition,” she says.
They certainly understand it now — today, she has investors initiating contact with her, and she feels in these interactions “a sense of people looking to back women” who have lived through the problems they are trying to solve with their businesses. Investors now appear to be “driven by the realization that there are huge markets to be addressed” when it comes to women’s health needs, she says — and “they don’t want to miss out.”
So, when all else fails, Tomkins advises women entrepreneurs to “retreat to the hard business case.”