Dear Ms. Venture Capital
This is a man’s world…but it would be nothing without a woman or a girl - James Brown
For as long as we can remember, women have always been placed in subservient roles in society which history can prove with evidence that we all have been exposed to. Let’s fast forward to 2020 - what we are seeing here is an extraordinary adaption to feminist culture and women empowerment. Females are stepping up to take their well-deserved pedestal seats in society after many patient battles later.
In 2017, AIileen Li, the founder of Cowboy ventures sent out an email to some of the top women in venture capital. This group of women were on a secret mission to change the “boys club” industry from the inside. This group of women created an organization called “All Rise” where prominent women in the industry come together to brainstorm and implement inclusion strategies where female VCs and founders can thrive. A few women on this ambitious list were:
Jess Lee - Partner, Sequoia Capital
Kara Nortman - Partner, Upfront Ventures
Rebecca Kaden - Partner, Union Square Ventures
Emily Melton - Partner, DFJ
Jenny Lefcourt - Partner, Freestyle Capital
This may be obvious but change starts from the INSIDE. Industry leaders should never be okay with the status quo. The same taste they have for change in the continuously evolving technology and startup world, should be mirrored in the culture of the funding side/financial industry as well. VCs see change and industry disruption as lucrative, but if they applied these same principles to not just the products they invest in, but the CULTURE as well, we will see much greater advancements in diversity efforts. These changes include adding bright women and minorities on their board and team of partners.
In today’s world, the best leaders not only lead in logical ways, but empathetically. In past practices this was looked down upon, and it still can be, if exercised in extreme doses. However it has proven to unleash a new perspective when integrated correctly. By nature and historically, women tend to hold more of a nurturing characteristic, which can bring a fresh outlook to the table when deal sourcing, analyzing pitches, and making decisions on investments. Numbers and data matter of course, but it’s also so important to learn how to view a startup with a human perspective and not just as a machine processing all these logistics on whether an investment is correct for the firm. Seeing ideas in this lense will allow VCs to make a broader decision on investment potential and viability. It may not always be the service or product component of the startup which is the winner, but the founders and their team. Connecting and building empathetic relationships in business can be more of a strength than a weakness. However, it’s important to not only rely on empathy and logistics, but also make it RELATABLE to the client or partner. One can only reach a state of being relatable once they have enabled their empathetic side. This opens us up to so many opportunities for connection right off the bat, because relatability serves as a steady foundation in a client-investor, or client-consumer relationship. Women bring diversity to the table, and diversity is about embracing the differences, which can bring upon a wide range of beneficial intellectual styles. The power, success and lessons lie in differences.
The new age of VC firms should view their human resources just as their capital resources. If a firm decides it would hold a portfolio full of only aviation investments, what happens when the aviation industry takes a fall? The portfolio stoops low and risks failure. However, if they had diversified their portfolio, they would have a safe cushion in times of downward trends. Parallel to this train of thought, if women and minorities take roles as partners and board members of a firm, there’s a monumental amount of value that the firm can gain.
Although there are so many negative setbacks that women experience, such as workplace harassment, patriarchal comments, “mansplaining”, problems with blending in or “being one of the guys”, or trouble getting high profile projects - as these should never be tolerated, at the end of the day I see it as a positive learning experience that come with takeaways. Since, women have dealt with these issues, they are intrinsic strategists, problem solvers, and careful thinkers because of the numerous scenarios which they have unwillingly been dropped into. Women have already been through a maze of difficulties, which make them exceedingly resilient and armored. This personality trait is achieved only by going through these obstacles head-on, and it molds females into characters that will be ready to face any adversity in business.
Another idea to understand is the female economy. Women now drive the world’s economy. According to Harvard Business Review, globally, females control about $20 trillion in annual consumer spending, and that figure could climb as high as $28 trillion in the next five years. Their $13 trillion in total yearly earnings could reach $18 trillion in the same period. In aggregate, women represent a growth market bigger than China and India combined—more than twice as big, in fact. Given those numbers, it would be foolish to ignore or underestimate the female consumer. And who better understands the female consumer than herself? Having women VC partners welcomes knowledge that could benefit the firm when it comes to startup sourcing and estimating the value of a startup, which can facilitate a clear point of view that may just lead to the next unicorn within the female economy, whereas the male majority counterparts might fail to see opportunity in. This unique judgement is so pivotal for a well-balanced investment or product recommendation.
From the founder point of view, being a female entrepreneur is grabbing the spotlight more than ever. According to recent data by Crunchbase, 2018 set an all-time high for investment dollars into female-founded startups, where female entrepreneurs are receiving more attention and money than ever before. As Crunchbase News reported earlier this year, “Nearly $40 billion was invested in companies with at least one female founder, representing 17 percent of invested dollars in the year.” And the women who are receiving funding perform 63% better than investments with all-male founding teams, according to a study by First Round Capital.
While these women entrepreneurs are working to close the Venture Capital gap, there still remains much work to do to establish industry ties and crack the male-dominated venture capital world. According to a recent Forbes study, women VCs only make up 8% of the total VC population:
In my opinion, I see this as an opportunity for women to make their mark. Since there is such a low female population in the industry, it allows space for awareness. The scarcity may just amplify the demand for bright female VCs. I see it more as an opportunity than a setback. In this day and age, I believe these numbers work more in a woman’s favor than against her. It’s a compelling time to be a working woman, and especially in male-dominated industries where a female footprint is desired more than ever, and that need is being noticed by everyone. Less % means more chances for us to increase it! It’s all about seeing the glass half full, rather half empty. The more women we see enter this notoriously male-dominated industry, the better we can leverage the connections from the outside to within - and we suddenly will see a chain effect as diversity prevails. That is POWERFUL.
According to the data in the graphic above, you can see that women provide undoubtful value to companies and startups when placed in leadership positions.
The data and statistics are all there. As females, the market is ours. We lead the spending economy, and our decisions are what keeps the marketplaces booming. As avid spenders, we know what we want to see reach our market. We know the innovation we hope to see our future families grow around, we understand empathy, and how to use it to build meaningful relationships, and we are smart, ambitious, and devoted beings. As the financial firms, along with all firms in various industries across America realize this, there is so much upcoming growth. Although history has shown otherwise, women are beyond capable of everything a man can do, and we’ve come to take our well-deserved place on our throne. Opportunities are endless, and we hold the power within ourselves to create the future we envision. It’s an exciting time to be a woman!