Evidence finds that in entrepreneurship, experience counts, but not if you’re a female founder pitching to male investors with a female-oriented service. It’s not just sexism that slowed Latina founder Fran Maier from raising money for BabyQuip, but also ageism. The company provides a platform for local Quality Providers to rent baby gear to vacationers. Fortunately women VCs and women angel investors understood the value proposition.
Maier has an MBA from Stanford and is a five-time serial entrepreneur, investor, and fundraiser with a powerful network filled with women who invest in women. The pandemic temporarily slowed the growth of the company, but developing a new service and maintaining BabyQuip’s social media presence built loyalty among providers and showed the resilience of the company’s leader.
It’s too early to tell just how VCs will approach investing in a post Silicon Valley Bank world but Maier is preparing for a cold environment.
After Maier left her last startup, TRUSTe (now called TrustArc), she became an Airbnb host in her San Francisco house. “It was almost always booked,” she exclaimed. “I was looking at the way people were traveling.” She was also thinking about how business was evolving—the growth of the gig and rental economies.
As luck would have it, she was also an advisor to startup founders in the Women’s StartUp Lab. There, she met Kerri Couillard, a Santa Fe-based founder of a baby gear rental startup, Babierge. At their first meeting, Maier quipped, “I should be your CEO.”
Maier joined as CEO, invested in the startup, and relaunched the company as BabyQuip in May 2016. The money was used to understand better the supply chain for baby gear—car seats, cribs, high chairs, strollers, and more—that vacationers might rent. BabyQuip now has 1,500 local Quality Providers in the U.S., Canada, Mexico, the Caribbean, Australia, and New Zealand. They coordinate directly with vacationers or through partners such as Vrbo, Wyndham, Destination by Hyatt, and Guesty.
Like Airbnb, in which Hosts own the property, it is Providers who own the baby gear inventory and coordinate the logistics. In the case of BabyQuip, it’s pick-ups, returns, and cleaning of the baby gear. It provides an online platform that assists with bookings, marketing training such as affiliate marketing and social media marketing, building a trusted name brand, training on cleanliness and safety, and providing liability insurance.
The company has a Net Promoter Score (NPS) of 94. The score is a customer-experience metric that measures loyalty and is predictive of business growth. A good score of 90+ means customers are likely to promote you.
Startup life isn’t for everyone. Couillard left the company in 2017. Maier’s son, Joe, joined as CTO. He had spent five years at Accenture as a technology consultant.
The Covid-19 pandemic took its toll on the business, but it gave rise to a new line of business. 2020 was off to a great start. Maier and her son appeared on Shark Tank on March 6. You know what happened next.
“I think it was pretty gutsy to introduce a baby gear cleaning business for car seats, strollers, and high chairs,” she said. “Moms became obsessed with cleanliness.” The service indicated that BabyQuip was in it for the long haul and that the company had Providers back.
The cleaning service was something that Providers could offer to all moms with infants and toddlers. BabyQuip and Providers cut back on spending, and many received PPP loans. BabyQuip did, too. So no one would forget the company, BabyQuip kept up its social media presence. This separated them from the competition.
No surprise, raising money as a woman in your mid-50s with a female-oriented service was challenging. Male investors’ comments included:
- The market isn’t big enough.
- The service can easily be replicated.
- The technology isn’t sophisticated enough.
There was ageism, too. “I don’t want to offend you, but why are you doing this now?” was a comment that Maier had heard multiple times. The implication was that women her age should focus on baking cookies, not launching a company.
Bill Gates, Steve Jobs, and Mark Zuckerberg are outliers, not the rule of thumb. The median age for successful founders is 42 years, and for founders of unicorns, 43, according to Age and High-Growth Entrepreneurship.
When a male investor challenged Maier to bring in $500,000 before he might potentially fund her company, she did. Theresia Gouw was one of those investors. Yes, that VC who has appeared on Forbes Midas List seven times. Still, this wasn’t good enough. “Gouw doesn’t count,” he scoffed. “She’s a personal friend.”
“Come on,” Maier sneered. “We all know the Silicon bro network is all about supporting friends.” Apparently, what’s good for the goose is not good for the gander.
Still, Maier went on to raise $8.5 million, including through Regulation Crowdfunding on SeedInvest. With Reg CF, founders aren’t limited to raising money from the 13.7 million accredited investors (wealthy people). They can raise money from the average Jane investor, including Providers. It wasn’t just money, it was marketing. It gives Providers a stake in the game and makes them even more committed to the success of BabyQuip.
Her VC investors include How Women Invest, Quake Ventures, SBI Sabaru, Startup Capital Ventures, and Thorny, an Australian VC. In addition to Gouw, angel investors include Barbara Clarke and Jillian Manus.
“The only way that we’re going to get women beyond the 1% to 3% [in all-female founder teams] is if more wealthy women invest in female founders,” said Maier. For that to happen, investing in venture capital must be more accessible to accredited investors. Nearly three-quarters of both men and women would write a check for $25,000 to invest in a venture, according to How Women (and Men) Invest in Startups.*
Women’s long-term investment style—spreading risk by buying diversified funds and trading less frequently than men—can yield good returns. Depending on their risk tolerance, investment objectives, and passion, allocating a small portion of women’s portfolios to investing in as limited partners in VCs can be attractive.
Investing in venture funds needs to be more affordable, which could be accomplished if the number of investors was raised from 249 to 499 for micro funds and the fund size is increased from $10 million to $50 million. Increasing the number of accredited investors in small, emerging, diverse funds will enable them to accept checks of $25,000 or less. Lifting the ceiling on the fund size allows the fund to be sustainable before it starts distributing fund profits.
Experienced founders know that a crisis can come out of no where. Maier banked at Silicon Valley Bank. “BabyQuip has significant funds in another institution, so we were not at immediate risk of missing payroll or any other essential activity (I moved money in January, knowing that it makes sense to diversify deposits),” she wrote via email. “Still it felt like the foundation collapsed! We survived the pandemic, but now this?”
Maier is grateful that the Feds stepped in to guarantee the deposits, but she remains concerned about the collapse’s impact on the start-up funding environment as she prepares for a new fundraising effort. She is getting ready for a chilly environment. “BabyQuip is focusing on extending our runway through a variety of measures, including cost management,” Maier wrote.
How are you changing how you bank?