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Three hundred meetings with young men in gilets and chinos who “laughed in my face” – how Anne Boden founded Starling Bank

Madeline Bennett Profile picture for user Madeline Bennett May 17, 2024
Summary:
Getting investment as an older woman is no easy task, and not one Boden would do over again.

Starling

Starling Bank has been one of the big digital challenger success stories. As the bank approaches its 10th birthday in June, it does so with 3.6 million customers, revenue that  more than doubled year on year, and a six-fold increase in pre-tax profits.

Despite its current success, Starling Bank didn’t have the smoothest path to launch. Its founder Anne Boden, who stepped down as Starling Bank CEO last June, but is still a Non-Executive Director, spoke to 300 investors before getting the necessary funding. 

This came as something of a shock to Boden, who initially was expecting a much easier ride:

I’d had a long, successful career in banking and technology, I did a computer science degree back in 1981, so my whole career was in tech and science. I thought I could simply knock on a door and say, 'I'm Anne Boden, I'm going to start a bank now like no other, it’s going to have all this new technology, which is going to transform the industry. Customers are going to love it. You’ve just got to give me money'.”

The older woman

But investors weren’t convinced - as a woman in her fifties, Boden didn't look like the typical tech entrepreneur, and people questioned her tech credentials. Time and time again, her request for funding was rejected: 

They laughed in my face and it took me a long, long time to get people to take me seriously. I didn't have contacts in the industry. I didn't know how it really worked. But every time I gave a pitch, it got better.

This was back in 2014. But fast forward a decade, and not much has changed. Only two percent of venture capital goes to female-only founded firms, rising to 18% for startups with at least one woman on the team. Even in mixed teams, they're not exactly balanced, noted Boden:

You tend to have a woman that has a secondary role and she tends not to have significant equity or decision-making power. As female founders or a mixed team with a woman on the team, we are still not getting the finance.

Practise makes perfect

Boden - the first woman to found a British bank - has advice for other women tackling the VC funding challenge: top tip - get lots and lots of practice. When she came up with the idea for Starling, Boden envisaged sitting in her bedroom for a month or two, studying all the details and then emerging with an outstanding pitch. She explained:

It's not like that because your initial pitch is going to be so, so wrong. My advice is get meetings, start having meetings, feel what it's like to go into the room.

That room, whether it's in the US or the UK, will normally consist of five or six men sitting on the other side of the table, and they won’t be senior, partner-level, Boden warned:

You'll be talking to people in their twenties and thirties, probably mostly in their twenties, in chinos and some of them will have beards. All of them will wear gilets. You’re sitting there on the other side of the table as they're thinking, 'This woman is not like me'.

This is one of the reasons why women are not getting funding, because investors are investing in people that look and sound like themselves. It took Boden a very long time to get investment, and as well as her perseverance, this was down to having honed her pitch and being able to answer all the various negative questions. She added:

You are having to build that resilience, and not just if you're a woman, but if you don't look and sound like the people on the other side of the table, it is going to be tough. That's why you have to get really practised and be really confident.

Changing the conversation

Having more women in senior investment positions would improve the situation, as this should lead to a shift in the tone of conversations during the pitching process, Boden explained:

If you've been interviewed for a job, there are employment regulations that prevent investors asking inappropriate questions. If you’re pitching, they can ask whatever they want because it's not regulated by that sort of law.

This could change as a result of a review into women-led, high-growth businesses that Boden chaired and has recently published its findings. One of the recommendations that Boden said has been accepted by the British Private Equity & Venture Capital Association is to have voluntary targets for more women in senior positions in investment firms. Boden added:

That's one of the things we need to do to get more women in the investment community. Over time, that should improve the experience of female founders.

The AI revolution could lead to a further opening up of opportunities for women in tech, and women must be ready to snatch these. Boden is very enthusiastic about the future and believes that we’ll be living in a very different world within the next 10 years:

We are going into Industry 5.0. The previous revolutions - one to four - women started out at the beginning and then were swept aside as it got interesting. We now have a situation where this particular technology revolution must be ours. We have the capability, it's all about societal changes rather than economy.

No coding? No problem

Boden predicts that in this particular technology revolution, women won’t be shut out by not having a coding background:

The AI will do the coding for us. It's a big reset in what really matters and what the entry criteria really are for this age of technology. I’m hoping this is Industry 5.0, women will play an equal part, and we will all together change the economy and lead the way in the UK.

Despite her eventual success and passion for encouraging other women to embrace the next tech revolution, Boden wouldn’t risk trying to start a new bank now: 

I probably know too much now. At the time, I was full of enthusiasm and thought that I could raise the money quickly and build something incredibly powerful. We’re bigger and more influential than I ever thought, but it took longer.

The big banks are now responding by buying technology to compete with the Starlings and the Monzos of the world, and Boden believes the FinTech battle has already been won:

You've got these new banks fighting and winning customer share, with huge followings. I don't think that many banks are going to follow us into that. This new era is all about doing different things in different industries.

My take

Boden’s comment that she wouldn’t take the risk of starting a new bank now highlights the absolute urgency of removing barriers for female founders, and indeed anyone who doesn’t fit the standard young/bearded/chinos/gilet-wearing template. The next big thing might not have a similarly tenacious champion to get the funding required to succeed, if they don’t happen to be a ‘tech bro’.

If Boden hadn’t persevered through those 300 pitches, Starling Bank wouldn’t exist, meaning the big banks wouldn’t have felt such pressure to embrace digital. Bad news for the British economy and the millions of us who prefer to bank online.

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