The Candor Clause Is My Solution To Sexual Harassment In Fundraising


One hundred and seventeen times, that's the number of times I've been rejected for funding while pitching my business, soona, to banks, angel investors and venture capitalists.

When you start a company, one of the most ubiquitous pieces of advice you'll receive is "learn how to have thick skin." It's common advice, because it's true. Every successful entrepreneur learns to grow comfortable in a suit of armor the way most millennials have embraced athleisure as the new business casual. It's the only way to put up with the inevitable deluge of rejection that comes in service to the pursuit of a dream.

And yet, being rejected 117 times barely registers an emotional reaction for me compared to the handful of times my gender played a role in raising money for my business.

When my cofounder, Hayley Anderson, and I first dreamed up our business, we thought about the potential of our shared dreams. Soona studios in every major city! Brands being able to get professional video the same day they shot it! The internet being eradicated of stock content! Every day, we suit up to pursue our mission to make professional photo and video affordable for all with our $39 photos and $93 video clips. We opened our first studio store in Denver in the spring of 2019 and launched our second in Minneapolis that summer. Our online-only product, soona anytime, gives brands access to our services through our real-time, remote platform.

And while building soona has been one of the most amazing journeys in my career, there are lots of things that can go wrong in a startup.

Pictured: Elizabeth Giorgi on set

In the winter of 2019 as we were preparing to launch and in the thick of early fundraising conversations, I found myself crying on the floor of our AirBnB between fundraising meetings. The cause? I was being harassed and had just received a lewd text from a potential investor.

I wish I could tell you this was the first and only instance of sexual harassment in my entrepreneurial career, but it wasn't. However, it was the catalyzing event that inspired me to think differently about the ways in which we could advance feminism while pursuing our startup. And one of those became the Candor Clause.

The Candor Clause is an open-source legal disclosure that is to be included in the Representations and Warranties portion of a financing agreement. It's a simple two paragraphs, not much longer than a tweet. But it is a powerful 150 words. The clause outlines that all parties are required to disclose any instances of sexual harassment, sexual assault or otherwise gender-based discrimination. Failure to disclose provides the business the ability to buy the other party out of the company at the price they paid during the initial financing.

This is important for two reasons:

1. It Generates Radical Conversations Between Founders and Investors

With this disclosure requirement, we can have an open, candid dialogue as founders and investors about how we want to do business at the very earliest stage of the relationship. In introducing the clause to our lead investors, we were able to share very clearly what we value as founders and our shared expectations about diversity, equality and general fairness. It also provides a clear opportunity to create advocates and champions out of investors, the vast majority of whom are men. Each of these conversations is an invitation to do better, be better and treat each other better.

2. It Makes it Clear to Perpetrators That There Will be Consequences

When someone is a victim in these types of situations, the onus is often on the victim to take on the legal, financial and personal strain of resolving it. By requiring a disclosure at the very earliest part of a business relationship, we are creating a clear standard. This is critical for removing barriers to a possible resolution in the future. By including the Candor Clause, it also sets a tone for how we will approach any future issues.

This year, of the companies that receive venture capital backing, only 2% of those companies will have a female founder. This is a statistic that has held strong for 13 years. Meanwhile, women are founding companies at record rates. The math doesn't add up, and it's critical that we start taking action from all sides.

Modern feminism is a commercial opportunity. Hashtag enamel pins and sloganed t-shirts targeted to women on Instagram are a step toward advancing the cause. But let's get real: we aren't going to get anywhere real with feminism as a fashion statement. It's my belief that making meaningful progress is the necessary though unglamorous work that no one pays attention to.

The opportunities to change the world are in the innocuous moments during the transactions of modern life and business. To paint a picture: the fight for equality might just be about getting the right words in the fine print.

The day I received a term sheet from our first venture investors, I remember feeling validated in a way that erased all the rejections that came before it. Much of the journey of building your business is surviving the process.

But what I recall even more clearly about that day was the way my stomach turned when the fund partner and I sat down for a chat to discuss the terms. I knew I had to bring up the Candor Clause. It was non-standard legal language. It was going to come up with the attorneys—might as well get ahead of it.

"Yeah, no duh. It's a great idea. We can include it. Now, onto timeline," he said.

It was, and still is, the only time in my life when being told "no duh," felt so good.

Great business ideas eventually find the right backers. Great founders eventually find their circle of cheerleaders. And it's now my firm conviction that great investors are realizing that the best investments are in people of character and bravery.

Today, when people ask me what impact the Candor Clause has had on my ability to raise funding, I am proud to say that it 100% has not impacted my ability to attract investment interest. And what it has prevented has been well worth it. I haven't been harassed or treated improperly as a woman during this round of financing.

The Candor Clause is open source and available for download at candorclause.com. Those interested in using it should visit our website for step-by-step instructions on how to navigate the inclusion of the clause with investors and legal advisors.

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How This CEO Is Using Your Period To Prevent Chronic Diseases

With so many groundbreaking medical advances being revealed to the world every single day, you would imagine there would be some advancement on the plethora of many female-prevalent diseases (think female cancers, Alzheimer's, depression, heart conditions etc.) that women are fighting every single day.

For Anna Villarreal and her team, there frankly wasn't enough being done. In turn, she developed a method that diagnoses these diseases earlier than traditional methods, using a pretty untraditional method in itself: through your menstrual blood.

Getting from point A to point B wasn't so easy though. Villarreal was battling a disease herself and through that experience. “I wondered if there was a way to test menstrual blood for female specific diseases," she says. "Perhaps my situation could have been prevented or at least better managed. This led me to begin researching menstrual blood as a diagnostic source. For reasons the scientific and medical community do not fully understand, certain diseases impact women differently than men. The research shows that clinical trials have a disproportionate focus on male research subjects despite clear evidence that many diseases impact more women than men."

There's also no denying that gap in women's healthcare in clinical research involving female subjects - which is exactly what inspired Villarreal to launch her company, LifeStory Health. She says that, “with my personal experience everything was brought full circle."

“There is a challenge and a need in the medical community for more sex-specific research. I believe the omission of females as research subjects is putting women's health at risk and we need to fuel a conversation that will improve women's healthcare.,"

-Anna Villarreal

Her brand new biotech company is committed to changing the women's healthcare market through technology, innovation and vocalization and through extensive research and testing. She is working to develop the first ever, non-invasive, menstrual blood diagnostic and has partnered with a top Boston-area University on research and has won awards from The International Society for Pharmaceutical Engineering and Northeastern University's RISE.

How does it work exactly? Proteins are discovered in menstrual blood that can quickly and easily detect, manage and track diseases in women, resulting in diseases that can be earlier detected, treated and even prevented in the first place. The menstrual blood is easy to collect and since it's a relatively unexplored diagnostic it's honestly a really revolutionary concept, too.

So far, the reactions of this innovative research has been nothing but excitement. “The reactions have been incredibly positive." she shares with SWAAY. “Currently, menstrual blood is discarded as bio waste, but it could carry the potential for new breakthroughs in diagnosis. When I educate women on the lack of female subjects used in research and clinical trials, they are surprised and very excited at the prospect that LifeStory Health may provide a solution and the key to early detection."

To give a doctor's input, and a little bit more of an explanation as to why this really works, Dr. Pat Salber, MD, and Founder of The Doctor Weighs In comments: “researchers have been studying stem cells derived from menstrual blood for more than a decade. Stem cells are cells that have the capability of differentiating into different types of tissues. There are two major types of stem cells, embryonic and adult. Adult stem cells have a more limited differentiation potential, but avoid the ethical issues that have surrounded research with embryonic stem cells. Stem cells from menstrual blood are adult stem cells."

These stem cells are so important when it comes to new findings. “Stem cells serve as the backbone of research in the field of regenerative medicine – the focus which is to grow tissues, such as skin, to repair burn and other types of serious skin wounds.

A certain type of stem cell, known as mesenchymal stem cells (MenSCs) derived from menstrual blood has been found to both grow well in the lab and have the capability to differentiate in various cell types, including skin. In addition to being used to grow tissues, their properties can be studied that will elucidate many different aspects of cell function," Dr. Salber explains.

To show the outpour of support for her efforts and this major girl power research, Villarreal remarks, “women are volunteering their samples happily report the arrival of their periods by giving samples to our lab announcing “de-identified sample number XXX arrived today!" It's a far cry from the stereotype of when “it's that time of the month."

How are these collections being done? “Although it might sound odd to collect menstrual blood, plastic cups have been developed to use in the collection process. This is similar to menstrual products, called menstrual cups, that have been on the market for many years," Dr. Salber says.

Equally shocking and innovative, this might be something that becomes more common practice in the future. And according to Dr. Salber, women may be able to not only use the menstrual blood for early detection, but be able to store the stem cells from it to help treat future diseases. “Companies are working to commercialize the use of menstrual blood stem cells. One company, for example, is offering a patented service to store menstrual blood stem cells for use in tissue generation if the need arises."