Thanks again for joining The Early Majority, and welcome to our first newsletter. We promised only to write when we had news to share- as in goods, services, insights, or experiences. While we’re still not quite ready to share news about our products, we have raised money to make them; and our experience doing so may contain relevant insights for those thinking of starting a business.

The three questions we received most from our last letter were:

1. What are you making?
2. What's post-patriarchal capitalism?
3. Can I invest?

I had expected the first one, but not the last two, so let’s talk about what we’ve learned about raising money.

And water is wet. But what does this mean for women in a world in which technology remains extremely male? Inspired as I am by William Gibson, he conceptualized the Web (even prior to its actual existence) as an artificial environment that the user ‘enters’, using a gendered metaphor to describe the experiential nature of cyberspace. More recent theorists describe the digital realm as a gender-biased space, made for men by men.* 80% of software devs remain men, and so on. Basically, it works like this:

Set aside what investing primarily in “asset-light” businesses (e.g. those that require the fewest people) has done to our society, institutions, and economic security. In practice, this simply means that male-dominated markets and opportunities receive funding, therefore reinforcing male dominance. Some examples:

I’ve excluded e-commerce, because that’s now everything, and we can generously assume that B2C SaaS equally spans both genders.  As for the category-definers, two stand out, both of which have been very outspoken regarding their difficulty raising capital and both of which initially focused on a female-dominated market: Stitchfix & Peloton.  

This schema also clarifies why the new equivalent of “sexing-up” a pitch is “teching it up,” as the founders of WeWork and Compass adroitly demonstrated. Now that software has eaten the world, now that the Venn diagrams of digital and real-life have edged into complete overlap, we see the distinction between them increasingly serving entrenched power. 

Given that we’re launching the business out of Paris, and we like working with people in the same time zone, we’ve preferred European investors. Nevertheless, we managed to raise less than 30% of our total capital in Europe. 

The following chart indicates why there may not be much money here:

Looking at this image, I’m reminded of the last technology on which America went all-in while Europe lagged: the automobile. You don’t need to read Jane Jacobs to know that America did so with disastrous results for cities, communities, and the planet. It’s one of the many reasons I love living in a city that’s walkable, swimmable, and filled with vibrant arts and culture. As America looks to rebuild its cities into post-pandemic ecotopias, expect those who have long lived in them to pave the way in terms of both goods and services.

Are we anti-tech? Are we negatively determinist feminists? No, we’re just questioning the status-quo and challenging received wisdom, and that’s what founders do.

Sure, I’ve heard about the “vulture capitalists,” and granted it’s possible I have a warped sense from having worked for great founders who picked great investors. But from the outset, I liked working with VCs more than the public markets (all the brutality, none of the charm). Witty and urbane, most of them seem to have stepped right out of an Ayn Rand novel and then outgrown Ayn Rand by becoming progressive and empathetic.  I love their bluntness, their lack of pomp and circumstance, and their insistence on transparency. And don’t even get me started on their creativity with metrics!  

While my perspective on VCs hasn’t changed, my perspective on capital has. I simply did not have the same respect for capital as an operating executive that I do now as a founder. Part of this stemmed from the ever-pervasive flex of “There’s so much cash out there!” In the early days of Clubhouse, before I figured out how to resist its aggressively needy UI, I dropped in on Naval talking about how there was so much money floating around for start-ups that all you had to do was literally put your hand out and take it.  

Similarly, I once expressed concern about cash burn to a founder who said to me as part of his pitch, “Cash is free, but growth is hard. I can get whatever money I want. What you do, money can’t buy.”  

The destructiveness of this narrative is two-fold: first, it wrongly suggests to employees and executives at start-ups that there’s no cost of capital, resulting in all sorts of warped behavior. Second, it’s simply not true for at least 50% of the population, who receive only 2.3% of the funding. That’s right, funding to female founders declined last year by -22% to an all-time low. 

So perhaps it’s fitting that as we embark on our journey making something that’s "not about boring toys for boring boys,” we take our inspiration from activists, intellectuals, prophets, and weirdos of the first wave of cyber-culture who resisted the replication of real-world power structures. Those like the art collective VNS matrix who vowed to not only be “saboteurs of the big daddy mainframe,”  but also believed in “jouissance, madness, holiness, poetry,” many other things NSFW and also — fun.

The power of feminism rests in its ability to allow you to see yourself in a historical context. Sexism and racism have always been a core part of strategies for capital accumulation— whether as tools to divide workers or by positioning women’s unpaid labor as natural. But must the logic of capital allocation also be driven by these forces? And if it’s not, will we begin to create a new kind of capitalism? 

That’s the bet we’re making, and we’re seeing it happen in our own cap table, which consists of 40% women. 

* Technofeminism. Judy Wajcman, Cambridge, UK; Oxford: Polity Press, 2004.

From the archives: This piece originally appeared in the Early Majority Substack. Links and content may be outdated—become a member to access all new Tools for Leaning Out stories and content.