It has been very interesting to read the many recent articles of prominent venture capitalists speaking out about the mistreatment of women in venture. Here we are in 2017, just 45 years after Congress passed Equal Rights for Women that outlined employers could no longer discriminate base on a person’s sex, and it is still a topic of conversation. Sigh…
In the course of American history, 45 years isn’t really that long ago considering the United States of America became a sovereign nation in 1776. However, I would guess that in the last 15 years, with the advent of technology and social media, the level of awareness surrounding the injustices women have historically dealt with has more rapidly come to light much moreso than it did in the prior 30 years. I’m extremely thankful for technology and social media because it has given women (and others) a voice to more easily and rapidly discuss issues that historically would have been left undiscussed.
Today I was talking to a woman entrepreneur who has created a novel way to use technology to customize women’s undergarments according to their exact skin tone. She said one of the more difficult aspects of raising capital is pitching to all male investors who can’t relate to the problem she’s addressing. Without much further analysis of her company and fundraising dilemma, there are two immediate thoughts that come to mind: 1). Maybe there are fundamental problems with her business model, and no matter whether the investor is male or female, she will continue to have trouble raising capital because of that, or 2). Maybe if there were more women in VC she would have a better chance at finding an investor who sees the broader opportunity because they would more quickly understand the market she’s addressing. I don’t know, maybe it’s both #1 and #2, or something else. But, in general, I think it’s safe to assume that if there were more women in venture there would probably be a lot more women led startup companies.
According to Gompers & Wang in Diversity in Innovation (January 2017), “Certain industries have substantially more women founders. In particular, women represent 19.7% of founders in Consumer Goods industry and 13.6% of founders in Consumer Sciences. Additionally, women represent 9.8% of Healthcare entrepreneurs. On the other hand, women entrepreneurs are only 6% of Information Technology entrepreneurs, the smallest percentage in what is the largest venture capital-backed industry.” These statistics suggest that given the small percentage of women in technology in general, the number of women who receive funding will likely be smaller.
The research paper goes on to discuss the small quantity of women who conduct VC deals and sit on VC boards. Without conducting any research, I think one could deduce that if there are less women-funded companies, there are less successful women-led exits, and ultimately this leads to less women-founded VC firms that can invest in other women-led startups. It’s a vicious cyle. However,there are some extremely talented women VCs out there already like Kirsten Green, Founder at Forerunner Ventures and Mary Meeker at Kleiner Perkins. These women are leaders in the industry and we need more women like them!
Albeit slow, the number of women (and other underrepresented groups) in venture is increasing and it’s encouraging to hear people like Chris Sacca, Brad Feld, Ellen Pao, Reid Hoffman, Fred Wilson, and many others speak out on this topic. I say we keep the conversation at the forefront of people’s minds and continue to drive progress forward. Cheers – KM