For the last two years, I have thought long and hard about business trauma, including the trauma that comes out of fundraising for one’s business, as I healed and grew in the wake of closing down Her Capital.
I founded Her Capital in 2020 with the mission to bring compassionate capital and partnership to female founders, as a vehicle of systems change. When ~2% of VC funding goes to 50% of the population, year after year, it's overwhelming evidence of a systemic breakdown. Since I began investing with a gender lens and coaching founders in 2017, I have had hundreds of conversations with (mostly female) startup founders and capital allocators of various genders and colours.
These are personal accounts from diverse human beings, distributed across cultures and geographies, of harrowing experiences in business in various fundraising contexts: demo days, incubators, straight-up hit-the-pavement pitching, as well as investment committees and post-investment phases including future capital raises.
The observations I documented surfaced eerily resonant forces and threads, and my recent certification in the Trauma of Money has given me the tools and confidence to recognise them as hallmarks of trauma. Fundraising trauma is undeniably present, and yet, I was surprised to Google it last week and find only 2 relevant hits on this topic (The remaining search results returned fundraising pages of non-profits working on trauma causes). Even those 2 hits were about fundraising trauma in the context of philanthropy by/ for persons of colour, rather than private/ commercial businesses raising external capital.
Defining “fundraising trauma”
So, let’s start by naming “fundraising trauma” - it is real - and proposing some defining parameters.
Dr. Gabor Maté says trauma, from the Greek for “wound”, “is not what happens to you; it is what happens inside you as a result of what happens to you.”
That wound is an unhealed one, and one a person is compelled to defend against by constricting his or her own ability to feel, to be present, and to respond flexibly to situations.
In my words: someone impacted by trauma cannot operate or show up as their full, whole self. And it’s worth underlining: just because trauma takes place within a person does not make it their fault or character weakness, or incumbent upon them alone to toughen up/ grow a thick skin/ assimilate.
Fundraising trauma then, is trauma that occurs in the context of raising external capital for a business (which may include an investment fund).
What does trauma have to do with fundraising? How does it even happen?
Pitching and closing external capital is rife with technicalities and it’s easy to see fundraising as a transaction.
Make no mistake though: it’s relational. Investing in early-stage companies or funds is largely founded upon investors’ belief in the founder (being the right person, in the right place, at the right time). So negotiating “terms” - valuation, preference rights, strike prices, market size, etc. - is an incredibly personal affair. One way or another, and however we couch it, any of these factors impact human beings significantly. When the relational aspects of a fundraising engagement are ignored, the conditions are ripe for fundraising trauma to arise.
In our present-day capitalist system, those who hold the purse strings also hold the power. There is a wide spectrum of investors who know this, and they range from
sharing power with others,
grappling with the power dynamic, to
enjoying wielding their power over others.
Trauma results from interactions with individuals incentivised by an extractive system.
Consequently, the common experience of those asking for money for their business is one of being on the margin, on the outside, in the cold, and looking into the window. To tell all the stories I have witnessed is near impossible, but Christina Poindexter eloquently captures a vivid slice in her viral post.
Somehow, in business, or where power hierarchies exist, bad behaviour is apparently normal - suck it up or let it slide (like “water off a swan’s back,” as I’ve heard several female founders share their coping strategies).
Bad behaviour comes in all shapes and sizes - when an investor:
Never looks you in the eye and only addresses your male co-founder/ employee…
Says, after their first 20 minutes with you, “I don’t think this business has any chance. You’ll never make it as a female founder”...
Insists on having the last word in every Q&A exchange about the business you built for years that they have only seen for the first time…
Asks for repeat meetings, knowing that your runway is shortening, and insists they are in, but never writes the check or refuses to be first money…
Who’s “saved” you by giving you their money decides they own you…
Decides it’s ok to be an a**hole to you because they have something you need…
Just a sampling of interactions around fundraising that spark trauma.
Why does it matter?
One might say that a founder has a choice whether to fundraise (and subject themselves to such behaviour). Sure, I know more founders than most who have mindfully said “no” and design their business to be independent of external capital… and their decisions often factor in the cost of enduring such trauma. But this is more the exception than the norm, no thanks to the financial system and media glamourizing venture capital as a success metric of a company.
Those who step into the game nowadays know what they’re signing up for, cognitively at least. They even expect to be gut-punched, or shape-shift, in the process and are willing to pay the price.
“To win in this world (read: to survive), we feel we need to fundamentally alter the way we show up. The changes start benign, but become so much more. We tweak our hobbies, our tone, our instinctual style of relationship building in order to FIT IN, REASSURE, and ultimately NOT SCARE OFF the people we are dependent on to help us.”
But I have been asking for some time now:
When did this become OK, much less an expectation?
Why is this necessary at all?
We don’t say to our kids, “it’s not personal, just business” and shrug our shoulders when they encounter a bully, liar, or anyone who diminishes their right to take up space in the world.
When fundraising is the lifeline for a business’/ fund’s survival, how can its founder realistically operate unimpeded as a whole person? To pitch 5x a day on the receiving end of such behaviour, then “walk in the door at home, carrying all that with you”, without tending to the wounds that play out emotionally, spiritually, or psychologically? We love stories of founders who hustle with relentlessly disruptive spirit, but god forbid that they ever feel small, not/ never enough, unworthy, and actually register trauma in their being.
“many of us are beaten into a submissive state of having to crawl away only to find some dark space to sit in until we can find our way back into the light again”
Our interactions with money impact our sense of self/ belonging in this world. Our experiences of wounding keep us small, trapped in the past.
“I know my current business is getting to the point where external capital makes sense, but just thinking about how I tried to raise for my first business makes me want to crawl under the rock.”
It’s not uncommon too that the oppressed with unhealed trauma become unintentional oppressors, perpetrators of a trauma-inflicting financial system.
“It’s just part of the game. If I had to jump through those hoops to get to where I am, why can’t you?”
Indeed, even if we have done our self-work, there is always another person in a financial relationship.
“I can’t control others’ relationships with money. It’s the most powerful thing ever - people behave badly because of it.”
But actively healing our trauma teaches us the gift of boundaries and recognition - we learn to meet sources of impending trauma with clarity and move ourselves to safety.
And we can also recognise when we are in positions of power, and how to consciously use that power in a system that - by design - demands we abandon our humanity.
Two intentions, not mutually exclusive
I wrote this with two calls to action in mind:
A wake-up call for investors or capital matchmakers to ultimately be trauma-informed in their processes and interactions with capital-seekers.
We’ve had data around inequitable funding for female founders and first-time/ diverse fund managers for years now; impact frameworks and certifications are starting to reflect quantitative measures of representation. Yet, the dimension of trauma which shapes the “how” might defy measurement, even if we recognise - at the level of the heart and spirit - that fundraising trauma both exists and is simply unacceptable.
“When this happens to someone you have hugged, it hits home: my money is causing harm.”
If you are a forward-thinking regenerative/impact investor interested in building a world that works for all, please reach out to explore the first steps to transitioning towards being trauma-informed.
An invitation for all who carry wounds from business and fundraising to heal.
If you’ve survived toxic organisations or cultures that didn’t allow you to fully be yourself, or have been wounded by narcissistic business partners/ investors - regardless of how you made out financially - that’s a reliable indicator of possible trauma that could hold you back or repeat in the present and future.
I’ve held the hands and caught the tears, of those recovering from various forms of business trauma over the last 2 decades with deep compassion, and healed my own trauma multiple times over. To me, there is no act of service and love greater than supporting a wounded human to feel seen, heard and valued… and to walk through the fire of pain, shame and fear to be whole, powerful and alive. I have seen that there is a way, and healing is part of the greater solution. I’d be happy to listen, share and midwife such healing towards a better way of business.
Schedule a chat with me here.
The good news
I’m ending this on a hopeful note - because it is vitally essential to ground in a belief of a better future in such a conversation of real and raw pain.
As I said to the disillusioned repeat founder who acknowledged her decade-long unresolved fundraising trauma, there are now pockets of fresh air that are carving a new way forward. Trauma-informed capital providers, supporting intentional growth with alternative working models to the entrenched, trauma-inflicting financial system and VC-funded hyper-growth.
“The best capital comes from people I don't need to hide from or shapeshift for.”
There is plenty of work to be done, and yet, there has never been a better time to find such capital partners.
This is an emergent space of innovation, and what I’m continually learning about as an individual, curious participant, and advocate. Below are a few inspirational jump-off points that give me hope, wisdom and awakening.
I’m in a giving circle with women on the other side of the globe, facilitated by Nafasi Ferrell. Monthly, we give money and more to each other and continually transform the transactional into relational, by simply remembering that there's a human being on the other end.
As a 5x activator in Coralus, I give and vote annually in a flow of capital built on relationships and systems change. Our process is full of mutual exchange and uplifting "gives". Those in North America can find other examples of alternative funding in founding activator Vicki Saunders’ recent post.
I was excited to listen to Najaah Daniels, CEO of Inclusive Capital Collective, in American Sustainable Business Network’s webinar on Restorative Capital Innovators talk about creating “trauma-informed finance tools”.
Laina Greene - an exited, woman of colour tech founder - has shown me how it could be done in Southeast Asia, through her pioneering restorative investing work at Angels of Impact, in women and indigenous-led community-based enterprises.
Their common DNA:
recognising trauma in finance, and honouring these experiences in the design of their work and approach.
our currency is as much trust, hugs and tears, as well as dollars and social capital.
practices such as showing up in our skin, saying what we need, welcoming in and surrendering to receiving form powerful corollaries to trauma healing.
If you have exhausted the touchpoints above, have more to add, or would like to learn more, get in touch or leave a comment below!
In writing this, I must acknowledge the founders (with permission), investors and systems change-makers who have shared a piece of their heart with me and (knowingly or unknowingly; directly or indirectly) contributed to these observations. I see you and your pain, and collectively it has catalysed me. I hope this serves as a vehicle to catalyse the much-needed change so capital can flow to serve all on this planet.
Deep gratitude to (in alphabetical order):
Anastasia Mourogova Millin, Brandi DeCarli, Cherilyn Tan, Delilah Panio, Denise Hearn, Dorothy Yiu, Hedda Pahlson-Moller, Hilary Kilgour, Ian Choo, Jacqui Hocking, Jeremy Tan, Joy Anderson, Julie Trell, Lisa Brincat ,Maria Calibo-Sales (Calmar Corps), Mary-Anne Anderson, Meriel Chamberlin, Miah Shull Olmsted, Rob Kaplan, Sam Jockel, Sagar Tandon, Servane Mouazan ICF PCC, Shelin David CA, Simone Givney, Susie Pan, Suzanne Biegel, Tania Jolley, Tania Lo
(and others who have chosen to remain anonymous)