From fundraising to operations, here’s how Topknot stayed true to their values while raising a $650k pre-seed
A micro-case study for Founders from the Startups & Society Initiative.
Too many founders think of equity and social responsibility as a set of issues to address later in their company’s life cycle. The truth is, it’s never too early, but it can definitely be too late.
“You can’t retrofit equity” — Claire Shorall.
Claire Shorall and her founding team at Topknot recently raised a pre-seed round from prominent investors like Backstage Capital, Homebrew, and Aston Motes, among others — while also doubling down on their commitment to making Topknot an equity-driven company.
We believe the status quo will only change with an emboldened and activated collective of diverse women. We create with and for BIPOC and LGBTQ+ women. We are actively antiracist and inclusive in our words and deeds.”
— Topknot’s Belief Statement
Here are 5 ways Topknot operationalized equity into their DNA as an early-stage company:
- Prioritize building a diverse cap table: The Topknot team focussed on authentically sourcing a racially and gender diverse group of investors. They fundamentally believe that finding diverse mission and values-aligned investors would put Topknot in the best position for long-term success. The intentionality paid off — and Topknot enjoys a very diverse cap table and track and publicize not only percent of headcount but percent of dollars.
- Bring your values into every process. Topknot built a framework to ask themselves how they are addressing race, equity, diversity, and inclusion before, during, and after projects are done. The result has been process and accountability structure that has imbued everything from job descriptions to user personas with these values, to content marketing decisions.
- Leverage advisors. Topknot recruited a diverse group of talented advisors that could help them bring an equity lens into their work in ways that both big and small. For example, as Topknot considered “what it looked like to authentically celebrate Black History Month?,” they leaned on the perspective of their advisors. Claire noted that “It’s not just that people are in the room, but the frequency and gravity with which they can use their voice. We’ve made our team bigger through authentic inclusion.”
- Develop accessible pricing models. Topknot developed a sliding price scale. They ask brief series questions to gauge a user’s ability to pay, and subsequently offer full, reduced, and “solidarity” pricing schemes. For users with limited ability to pay, their service is effectively free, and Topknot makes a point to not make users jump through hoops to demonstrate need. “True accessibility means it needs to be straightforward for people to get what they need,” Claire argues.
- “You’re either about it, or you’re not.” When Claire agreed to give one of their male advisors an equity figure greater than what one of their impactful qualified womxn advisors has asked for, she realized that the womxn deserved the same amount, and so she increased her equity grant. While the disparity was unlikely to have surfaced, Claire knew that bumping the womxn advisor’s equity was the right thing to do from an equity and integrity perspective.
While Claire and her team are committed, they know equity is as much a process as an outcome. While asking these questions may seem to some as “introducing friction,” Claire thinks thats the point — and that it is what will set Topknot up for long-term success:
We have structures that force conversations on these issues. When we embark on any structure or product or initiative, this is part of the check in, any post mortem includes it too. Who was able to contribute effectively and who wasn’t?
We spent a significant amount of time developing and honing our pillars such that they would be steadfast and guide our long term success.
The investment of time was worth it.