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Female-led startups face a funding hurdle

Marie-Philip Simard left corporate law to found her startup Chic Marie in 2015.

Marie-Philip Simard of Montreal tried a little experiment to test the barriers faced by female entrepreneurs. The result was shocking, even if not wholly unexpected.

Ms. Simard had stepped into the entrepreneurial community with strong credentials: a previous career in corporate law, graduate work at McGill University in applied finance, and a track record in a business accelerator program for entrepreneurs.

But when approaching investors to pitch her fashion startup, that's when gender issues arose, she says.

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After pitching 10 investors whom she knew, she only received a response from one. "It was really weird, because our metrics are really good," she says. In other words, the measures for making the business a success were sound.

So, she and a male colleague then tried their experiment. The colleague sent exactly the same e-mail with the same pitch to the same 10 investors, and six responded, Ms. Simard said.

"I'm in a couple of groups of women entrepreneurs, and this is something we discuss a lot," she said, referring to their difficulties faced in the tech sector.

Ms. Simard had left corporate law to found her startup Chic Marie in 2015. "When I was a lawyer, about two-thirds of the people [legal colleagues] were women," she says. "So, I never felt a problem." Yet, people warned her that things would be different in the startup world.

Ms. Simard's new company offers women a different way to enlarge their wardrobe, an idea that arose from having to spend too much money on clothing to meet the dress code of the corporate world.

Chic Marie customers buy memberships online to receive boxes of sample clothing that arrive throughout the month. (Monthly memberships range from $55 to $95 for up to three boxes of items per month.) Customers can then wear the clothes they like around for a while, effectively renting an extended wardrobe. They then return the items, and new selections of clothing are sent. They arrive like new, and the company later drycleans them for the next customer. Any item that a customer wants to keep, though, can also be purchased.

Chic Marie, a company of eight employees, is now in expansion mode, with a media launch in Toronto planned for next month and in the United States in September, to take the company beyond its Montreal base. Ms. Simard is also working with Concordia University on an algorithm to strengthen the selection of casual and business wear items that customers receive.

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Yet, with her early encounter with investors, she feels two factors may have been at play. "First, there are not a lot of women investors. So for me, in the women's consumer business, in fashion, it is easier to sell the idea to a woman [investor] because she will understand the market and the product," Ms. Simard says.

She also believes that because there are comparatively fewer big-name female entrepreneurs who have made major splashes in the tech sector, investors are typically looking for a certain type of stereotypical male entrepreneur.

"I think that the more women succeed in growing a big company and raising a lot of capital, and doing IPOs [initial public offerings], it will become easier to raise money for women," she says. "There is still a lot of work to do."

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About the Author

Guy Dixon is a feature writer for The Globe and Mail. More

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