An unspoken covenant with investors
Updated: Feb 17
On Friday night I put my daughter to bed, finished all my emails and calls for the week and was enjoying an hour of 'me time' before crashing into bed.
For a few minutes I felt like my life was in balance. I was on top of everything at work (as anyone running their own venture knows, that feeling is always fleeting, but highly relaxing). My six-month-old baby was fast asleep by 6.30pm - Go Mommy!
I felt, if only briefly, like I had it all handled.
And then I got a text from another investor.
"Hi Anya, a female entrepreneur reached out because she has announced that she is pregnant and it did not go well with her board and investors... I thought of you and wondered if you would be open to talking to her."
I briefly checked my iPhone. Yes, it still said 2018. I was not magically teleported into the 1950s. Now, I have made no secret of having launched Voulez while pregnant (I was 8 months when we had our launch event - just check out the event video- I look huge!!!). Of course, I said yes.
A couple of days later and we are having a chat with Christine. It is not her real name. But we need to call her something and I am definitely not going to tell you her real name or that of her company. So here it is. Christine. But I am going to (with her permission) tell you what happened.
Christine runs a tech company. They've had some traction and some angel investment to date and are gearing up for a bridge round. She is currently the sole founder. Two other co-founders have cleared the decks and decided to do something else, taking most of their equity with them. Now, those that know me, know that here I am massively resisting a rant on how startups don't think through their shareholder agreements to prevent this and how this is where having the right VC early on is super helpful.
I will resist though and will focus on the matter at hand.
Come week 12 of the pregnancy and Christine decides it's the right time to tell her board. Like any sensible CEO, she wants to put in place a contingency plan and to communicate it all together to her investors.
Instead, she gets accused of 'breaking an unspoken covenant with her investors' and a lecture on how when they've built their companies they chose not to have kids. Oh, and she is vetoed on sharing a contingency plan with the investors.
Like any sensible entrepreneur, Christine then carefully prepares a list of successful women that had children, including Katrina Lake, the StitchFix CEO and the youngest female founder ever to lead her company through an IPO, and who rang the NASDAQ bell with her toddler in tow.
She patiently presents this list to the board.
They don't warm and instead keep questioning her day to day business decisions. As if being pregnant warrants extra double checking of the CEO's day to day operational capabilities. Did she suddenly morph into a completely different person? I am sure not.
Now, just pause for a second here and try to remember any case in history - and I mean any case at all, EVER - where a man was asked to demonstrate that he could have children and continue to run the company. When he would even be required to tell the board about a potential new offspring. Let alone be accused of breaking some kind of a covenant with his investors. Note - an unspoken covenant at that.
Neither can I.
I am an entrepreneur. I am an investor. I deal with terms and conditions relating to investments all the time. I sign term sheets. I sign Shareholder Agreements. I certainly do not recall having a Hogwarts style, invisible ink, clause in any of our documents. And I actually read, annotate and edit our documents.
If I am, however, mistaken, I welcome our transaction lawyers to please point it out to me. I know they will be reading this.
And while we are doing that, please indicate to me where in the shareholder agreement is a secret switch that turns it from a male founder to a female founder version. Now, imagine that you are Christine and that you have to prepare this list. I know what I would feel. I would feel rage. Unimaginable rage. And even more rage at not being able to demonstrate that rage.
Heaven forbid, while being pregnant, we show any kind of emotion and risk being accused of being 'overly emotional'. An average female does not need to be pregnant to be accused of being that at least once a week, let alone a pregnant female with a board that thinks she can't run the company and have her baby.
We take it for granted that a male CEO will have children and will have a life and will find a way to make it all work and he does not have to report on how he is going to make it all work.
And here is a news flash - women have been making it work for thousands of years. Ever since we lived in caves and men went off to a hunt every now and then and the majority of the diet consisted of plants and seeds and nuts, which women collected, typically with babies strapped to their backs.
Because we are like that.
We find a way.
We get home, we put our kids to bed and we then get back to emails and calls. We build companies and we take them public. And yes, we have kids along the way. Because, as one of our portfolio CEOs put it recently - life happens as we build businesses!