How Female Investors Saved M.M. LaFleur in a Financial Crisis
Welcome to #259 weekly newsletter from The Purse.
We will be testing a few formats and layouts over the next few weeks and we’d love to know what you think! Please complete the brief survey at the end of newsletter or send me an email: jana@jointhepurse.com.
The Big Picture
How Female Investors Saved M.M. LaFleur in a Financial Crisis
Image source: Canva
Word count: 546 words. Read in 2-3mins.
Quick take..
M.M. LaFleur, a women’s fashion brand, was on the verge of financial collapse until a group of female investors stepped in to provide the capital and support needed to save the company, as reported by Fast Company.
This story highlights the growing role of women-led investments in driving startups and business turnarounds.
CEO Sarah LaFleur was able to secure $3m within three weeks through a female investor event, with the help of her friend, Bay Hudner who was working in a family office.
What you need to know..
For women investors and founders, this case demonstrates the power of female-led investments. And the importance of building networks that align with values for long-term growth. It also shows how mission-driven investing can deliver financial and strategic results in industries.
How it happened..
M.M. LaFleur was struggling to survive during a tough economic period and couldn’t secure traditional funding.
The company’s founder, Sarah LaFleur, pivoted and organised a ‘special situation meeting’ targeted specifically at female investors, which led to the formation of a group who collectively decided to back the brand.
Dozens of women investors and supportive M.M. LaFleur customers were invited. And instead of a high-pressure pitch, LaFleur focused on sharing industry knowledge and offering solutions.
Twenty-five women said yes. And they agreed to invest through a Simple Agreement for Future Equity (SAFE) structure. When M.M. LaFleur raises funding again, investors will receive a return on their investment based on the company’s new valuation.
LaFleur said: “…There was this unwritten rule that women don’t talk about money, while men always do. But I think the culture is finally shifting and it could make a huge difference to female founders.”
Keep in mind..
46.7% of U.S. angel investors are now women, a significant increase from 39.5% in 2022, reflecting rising female participation in angel investing.
UK female angel investors represent 14%. To address this, the Women Backing Women campaign, supported by the UK Business Angels Association (UKBAA) and linked to the Rose Review of Female Entrepreneurship, aims to raise female representation in angel investment to 30% by 2030.
The number of female VCs in Europe has surged to over 350, up from only a dozen in 2010, highlighting a growing presence of women in venture capital.
Female investors back female founders at twice the rate of men. As more women engage in the startup ecosystem, the rate at which women get funded, and how much funding they receive is set to rise.
The flip side..
Despite progress, female founders have to contend with the gender funding gap. And can face difficulty connecting with the right female investors. Hudner pointed to this as a “market design problem around connecting the right capital to the right projects,” which has been a barrier in female-focused investment.
But times are changing.
Key takeaway..
For female founders, women-led investment groups can offer strategic alignment and essential capital. And especially at a critical time. Crafting a collaborative, values-focused pitch can engage like-minded investors who are bought in for the long-term.
In summary..
M.M. LaFleur’s story illustrates the transformative power of women investing in women, and via a ‘special situation meeting’ approach.
CVS CEO Karen Lynch’s Exit Highlights Leadership Challenges for Women
Image source: Canva
Quick take: Female CEOs like Karen Lynch face unique challenges, with research showing women leaders are 45% more likely to be fired than their male counterparts, as per Morningstar.
What you need to know: Women in leadership roles still face gender-based scrutiny, even when delivering results.
Check this out:
Women CEOs are held to higher standards, often with less support.
The lack of gender diversity at the board level exacerbates these issues.
Key takeaway: Companies are slowly starting to recognise these biases, but progress is slow.
In summary: Structural change is needed at the top levels of corporate leadership to retain and support women executives.
We’d love to hear from you. Please share your feedback & tell us what you think. Thank you.
We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and janicka. We do no provide investment advice. Please do your own research or speak to a financial adviser.
The Purse Ltd. Copyright 2024 & All Rights Reserved.