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The single most important and intimate relationship a founder needs to cultivate is with her investors. This relationship is akin to a marriage and, similarly, the term sheet — a contract outlining the terms of the investment — is akin to a prenup. In this series of posts I’ll explore how the term sheet becomes a crucial predictor of the fate of this relationship, beginning with the caveat referred to as a “clawback”.

A clawback is a provision that essentially says, “Founder, if you don’t achieve X milestones by Y timeframe, we have the right to adjust your business’s valuation and take a larger share of your company.” In a marriage, a clawback allows a soon-to-be spouse to say something like, “I’d like to marry you but, if you don’t produce a baby by our first anniversary, I have the right to trade in your wedding ring for something cheaper.” The truth is that, while rare, a clawback is not an unheard of provision today. Investors use them for a variety of reasons, mainly as a precaution to protect their investments.

Timing is Everything

The key issue with a clawback is its timing. At the early stages of a new business, both partners would be wise to expect the unexpected. A startup’s ability to pivot in response to market conditions and changing consumer behaviors, especially in a rapidly evolving tech landscape, is its lifeline. When expectations are defined in a manner that is too confining (without consideration for the real-life ebb and flow of a burgeoning business), it can hinder both parties’ ability to reach and possibly exceed their collective goals. Such conditions can signal mistrust and even worse, apply undue pressure that is counterproductive and even destructive to shared goals. This is not an ideal way to begin a relationship.

Don’t Fall in Love Too Soon

While founders are sometimes overly eager to go with the most immediate funding opportunity, and getting a term sheet can be a dream come true, it’s wise not to fall in love at first sight and lose your objectivity about what makes or breaks a lasting relationship. Do not be so enamored with having someone willing to “put a ring on it” that you become disempowered in the process. Negotiating terms is best done with discernment and a sense of assuredness that the terms and conditions of your relationship don’t compromise what’s in the best interest of your business.

It’s Okay to Question Motives

Understand your investor’s motives and the underlying reason for including any terms that are not standard. First, you’ll want to know if this is standard for all their investments and, if so, why? Then, determine if you can meet those motivations with less restrictive terms. Have a conversation, a negotiation. If you still aren’t satisfied, then it may be wise to walk away. Do your due diligence, talk to other portfolio companies and investors, negotiate wisely, and don’t neglect to question clauses that are nonstandard and potentially harmful to your business interests.

Know When to Say ‘No’

Remember that negotiating investment terms involves clarity, confidence and the art of finesse — this is especially important for minority-owned businesses. While gratitude and humility are honorable traits, never let a sense of indebtedness dictate business decisions or impact how you relate to investors. Remember that they have a choice to invest in you or go elsewhere, but they chose you. Conversely, you are also in the process of choosing them, or not. This is business, not charity, and you don’t have to say “yes” if/when the wisest decision is to say “no”.

Keep in mind that the presence or absence of a clawback in isolation doesn’t give a complete picture of the viability of the relationship. So, while I wouldn’t advise a founder to sign a term sheet with a clawback, I would encourage that you speak with an attorney and weigh all the pros and cons. What else might your potential investor have to offer that could make the relationship worthwhile?



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Last year, while on a panel at AWS re: Invent, I got one of the most honest and troubling questions I have ever received. A young woman asked, “How can I capitalize on being different and being the only woman on my team?” She admitted that while more diversity was needed, there were definite perks to being the “only one”.

She’s not alone. I’ve also been guilty of basking in the joys of being “The One”.  At one point or another, I’ve been the only black, the only woman, only Muslim, first generation American, and most recently, one of the only black women to raise $1 million or more in VC. Friends, family, colleagues and the media touted these firsts as badges of honor that set me apart from others; and with enough repetition, I believed them.

Mind you, the accolades and lifetime opportunities are generally well-served and oftentimes hard won.  Most of us have been through the gauntlet and paid more than our share of dues. So, it’s understandable to be proud, perhaps even protective, of our coveted places in the sun.  The challenge, though, is that in the midst of reaching those top slots, we often fail to consider the other 99% who remain unrepresented. 

One of the many downsides to being a “Corporate Unicorn” is that many of us may feel threatened when another person within our minority group is on board. Since the coveted “diversity seat” at the next level is usually reserved for only one of us, we become painfully aware that we are being compared to and pitted against one another. Even with the best intentioned people, the pressure to vie for space in this rarified air is real. 

But, imagine if there was a more empowered alternative to “The One” experience. 

I was reminded recently, as I watched the runaway hit movie Black Panther, that success increases exponentially when it is approached as a shared experience of group excellence. As I sat in a crowded theater, I was delighted to watch powerful black and female characters “killing it” in a technologically advanced society. While this may have appeared unusual to mainstream western audiences, it was quite natural, as a Nigerian, to see women and men who looked like me portraying captains of industry in the sciences, academia, law and government. I’ve always known professional excellence to be a cultural norm; not an exception. 

So, it was a reminder that the perspective of “success scarcity” is not a given. This limited belief is a learned behavior. When a few are elevated at the expense of the many, it has detrimental effects for the chosen and the forgotten. It subconsciously puts people in one of two camps. They are marginalized and undervalued or accepted but alienated. 

What was so powerful about Black Panther is the important subtext of collective elevation. It modeled both the antagonist’s experience of an aspiration born out of alienation and the protagonist’s strength in leading from a place of tribal inclusion. While, practically-speaking, we are far from the fantasy of a utopian society, we can borrow from this idea of an inclusive leadership style that has both collective value and personal benefits.

As Unicorns, we will always be faced with having to educate others. Our very presence represents a departure from the norm in many environments. So, there is value in fully owning our positions and letting others see that our presence isn’t just an anomaly. We are representatives of a “new normal”.  But in addition to representing our own empowered positions, we can also serve as change agents within our spheres of influence. The best way to diffuse unhealthy competitive environments is to change them, hire more diverse teams. In spaces where there are only two of us, we’re likely to feel more competitive. It’s human nature.  At higher numbers, however, we are apt to feel happier and are more collaborative in welcoming and inclusive spaces. 

Workplaces that are diverse by design allow us to be our authentic selves. This might sound like nothing more than a popular buzz phrase; but authenticity matters! Personally, my authentic self is my most liberated self. It means not thinking twice about wearing a hijab or my natural hair to work. It’s bringing a different perspective that may shake things up a little or a lot. It’s about a safe space in which all the ills of society may not be resolved, but they are acknowledged. It’s a far more creative, innovative and progressive professional space.

When people’s authenticity is valued and they are surrounded by others of the same gender, race, cultural background, religion, sexual orientation, etc., workplaces are healthier and more productive. Inclusivity makes good business sense. It leads to increased productivity. Studies show that racially diverse teams outperform non-diverse ones by 35 ( A cognitive intelligence study done by MIT engineers showed that successful teams had three things in common: they gave one another roughly equal time to talk, they were sensitive towards each other (even in awkward situations), and they included more women - making them the most diverse.

Given these insights about the downsides of being the “The One”, my response to the young lady’s question was perhaps not what she expected; but hopefully it provided food for thought. I encouraged her not to fall into the Unicorn mind trap. None of us, alone, is enough of a representation of an entire group of people. The view from the top is beautiful, but it doesn’t last long if there’s no one there but you. The attention we receive for being “The One” is exciting in the short run. But long term, our careers, our successes and our everyday experiences at work are so much richer and more fulfilling when we cultivate a diverse, supportive and collectively empowered tribe. I encouraged her to try it.

Women tech entrepreneurs need to become 'visible figures'

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Commentary: As a woman of color, I hid my identity to get VC meetings. But I learned instead that embracing my true self would lead to the right meetings.

It's no surprise that my experience with VCs has been interesting, to say the least.

When I walked into a room of investors, the faces staring back at me not only looked different from mine, the first few minutes often felt like "Guess Who's Coming to Dinner." The time and mental adjustment it took to make sense of me, a black woman, had me at a disadvantage from the get-go. Imagine psyching yourself up to give the best pitch of your life when the people across the table have no genuine connection with you.

After dozens of interactions like that, I decided there must be a better way. My solution? I let my resume precede me. I highlighted my grades, 20 years after I graduated college. (Who does that?) I removed my LinkedIn profile picture. I didn't use gendered pronouns. I removed affiliations that revealed my race. I refrained from referencing up front that my audience was primarily women of color. 

Essentially, I took away part of my identity. And it worked. Briefly.

"By unapologetically being my authentic self, I met with fewer investors but they were the right investors." 

With these changes, my investor meetings increased immediately. But do you know what didn't? My confidence. Even though I made it to the pitch, the reaction was the same, except this time, they were also surprised. And through their surprise, they could barely comprehend my business model, scalability plan, audience segments, marketing strategy and leadership.

I realized that hiding my identity only delayed the rejection. This certainly wasn't worth my identity crisis and all the emotional baggage (guilt) that came with the feeling of "selling out." So I reposted my profile picture, added back my affiliations and changed my executive summary to show women of color.

Did I get fewer meetings? 


Was it worth it? 


By unapologetically being my authentic self, I met with fewer investors but they were the right investors. They were VCs who were genuinely interested in the potential of my business.

I used to not tell this story freely. I used to be embarrassed by it, afraid that I would be judged for hiding who I was. Then I shared it recently with a group of developers, designers and entrepreneurs -- predominantly women with some male allies -- at Women in Tech Demo Day in New York.

I knew that afternoon that I had to continue to tell this story, because of what the women and men there told me: The nodding of heads each time I referenced a micro-aggression. The questions about my decisions and what I would do differently. Most important, the wonder about the future of diversity in our industry.

I do believe there's hope. As a black woman, there is no escaping the difficult realities of the current landscape. But there is also huge opportunity. Being a woman, and being a black woman, can be an asset if you focus on the right forums, the right partnerships and -- I cannot emphasize enough -- the importance of building community. Here are reflections based on my own experience as an entrepreneur and engineer:

To VC or not to VC. The ability to scale is on every founder's mind. Black women founders struggle to raise enough money even to test their products. For black women, the average amount of VC funding is $36,000. I'd ask you to question when and whether you even need to raise money. Too many startups use VC funding as a measure of success and focus on raising dollars rather than the business. Timing is critical. Pursue funding when it makes sense, but don't let dollars cloud your vision.

Choose wisely. As a woman founder, it's critical to choose investors the same way you choose your partner. You must ask yourself: Are these people willing to stick with you through thick and thin -- understanding you may have more "thins" than others? Do they understand the challenges you may face? What's their reputation in the investor community? Do you have the same values? How will you handle disagreements? Once you've had a measure of success yourself, you can be that same kind of investor.

Board diversity is a business imperative. A lot of decisions are made at the board level. As a startup founder, once you have raised funds, you'll be reporting to a board,  which comes with a new level of responsibilities and issues. Just as studies have shown that diverse teams drive innovation and improve business outcomes, so do diverse boards. Be an advocate for boards in which the unique challenges we face as black founders isn't taboo and can be talked about freely and genuinely.

Raise up the volume with a broad and bold network. I believe that it is a duty for every woman in technology to pull another woman up, identify another brilliant entrepreneur who is doing something great, or an engineer with visionary skills, and help her get the platform she needs to thrive. Without building community and amplifying our voices, we are not going to get anywhere. The reality of the tech and VC world is that there are more men than women of any background. We have to work with the men in our lives to make sure they become allies. As a founder, that means extending your own network to include men who are invested in your success. Inside a big company, it means developing and nurturing the ally environment.

I'm part of a small but growing networking group we call Visible Figures. It started with a handful of us and we are growing quickly. In some ways, it's our call to the future.

My 3-year-old daughter's generation should enter the workforce ready to make a difference on a massive scale -- not worrying that others don't see themselves in their faces during a business pitch or on their social media profile.

There's no reason in 2017 that we shouldn't be visible.

As an entrepreneur, Asmau Ahmed is one of only 12 black women to have raised more than $1 million in venture funding in the US. In 2010, she founded Plum Perfect, a visual search engine, in which one application is a mobile app that analyzes a shopper's selfie to recommend her makeup shades. As a member of Capital One's Digital Product Management team, she focuses on designing products and experiences that change the way people interact with their money.

This article was originally published on Cnet