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October 05, 2009

The VC Gender Gap - Are VCs Sexist?

I find the preponderance of males in VC an annoying and stubborn phenomenon.  When I first entered the start-up game as an entrepreneur in the mid 1990s, I didn't think much of the "VC gender gap" as there were plenty of women executives around.  In fact, between one third and one half of the executive teams at my two start-ups (Open Market and Upromise) were women.

As the father of a capable, ambitious daughter, perhaps I'm over-sensitive to the issue, but since becoming a VC seven years ago, I find it amazing that only 5-10% of the VC industry is made up of women.  Only 25% of all VC partnerships have a single women partner and only 7-8% have more than one women partner.  Anecdotally, even fewer women are "management company GPs" as opposed to "employee GPs" - in other words, true owners of VC funds as opposed to deal partners.  What other major industry remains 90-95% male-dominated?  What's the deal?

An outstanding Kauffman Institute study, “Gateways of Venture Growth”, analyzes this issue and comes up with some thoughtful but unsurprising conclusions.  They point out that the industry remains very clubby, and the lack of female role models creates a self-perpetuating cycle. Professor Myra Hart of Harvard Business School writes, “Women trying to launch or further careers as VCs have fewer first-degree connections with those (men) in positions to hire or promote them.”

Another issue that holds women VCs back is the fact that the academic backgrounds of VCs tend to be in technical areas, such as computer science, engineering and biotechnology where, again, females are in the minority.

In talking to my women VC friends, they reinforced these two major issues, but held out some cause for optimism going forward.  Irena Goldenberg of Highland Capital in Europe (an formerly an associate with us at Flybridge Capital before she went to HBS and then Geneva), believes there are more female VCs in life sciences as the medical field has a higher ratio of women to men then, say, engineering.  Our senior associate, Robin Lockwood, told me she thinks VC profiles simply lags entrepreneur's profiles.  As more women entrepreneurs emerge, more women will become VCs.

Here's a thought-provoking observation that an anonymous woman pointed out to me (and please do not accuse me of channeling Larry Summers on this - I'm just passing along what I heard):  she believes the VC industry is male-dominated because men are more wired to take risks than women.  Gambling, she points out, is more popular amongst men than women.  Thus, risk-taking with capital is more likely to be comfortable for men than women.

Some women have been able to break out as strong investors and industry leaders.  In my informal survey, a few experienced women VCs stood out as strong role models:  Venetia Kontogouris at Trident Capital, Annie Lamont at Oak, Patricia Nakache at Trinity and Nancy Schoendorf from Mohr Davidow.

I guess when you have a clubby, tightly-woven, self-perpetuating network, it's hard for women to break in.  It's a stubborn phenomenon, but I hope we can figure out how to correct it.  Otherwise, our industry is tragically losing out on 50% of the world's best talent!

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As the CEO of a startup and a woman, my reaction to this is: Fine by me, I'll hire them!

It does lead to many fine moments of high comedy. Just this week I was interviewing a (male) candidate for an internship at our company. When the interview was over, I escorted him down to the lobby to point out the nearest transit station. Someone in the elevator, overhearing our conversation, added a few comments, and when we got to the lobby, he said to the prospective intern, "Good luck with your startup," and went on to make some comments that made it clear that he thought the 20-something intern, not the 40-something woman, was the CEO. I'd seen it coming, because it happens to me routinely, but the young intern at least had the good grace to look appalled, and corrected the man, who looked embarrassed and scuttled out of the elevator.

The intern said: "I had no idea he thought that!" And I thought, but didn't say, "Of course you didn't -- even at your age, you're accustomed to being treated with respect."

Being underestimated can be a big advantage; in fact, when I spot it happening, I often get that gleeful, "your lunch, me eating it" feeling. Even when it isn't, it's often very funny.

Excellent post and excellent questions/discussion. I attended an event a few years back, featuring women in VC, and it's struck me that since that time, I have not seen or heard much about women in VC. Of course, I haven't gone out looking for them, but maybe that's part of the problem -- visibility.

I hate to gender-typecast anyone, but it strikes me that I hear and see a lot more from men in VC than women. Maybe VC women ARE blogging and tweeting and being public and involved in wider discussions, but I haven't heard/seen much of that. Most of the women in tech I know aren't avid bloggers and social networkers. It's about the last thing some of them want to do. They've got other things to do, than sit in front of the computer long into the night. (I seem to be an exception in my own circle.) Again, I don't want to make gross generalizations. These are just my observations.

Nobody's going to give women visibility out of the kindness of their hearts. It's there if we want it -- we just need to make ourselves seen and heard and not take "No" for an answer.

Yes Jeff -- all true.

So how many women-VCs have you mentored into the business and how many women-founded companies have you funded?

Every time one brings up the issue, some VC will appoint a token extremely decorative young woman, who isn't threatening and couldnt less about greater women's rights. They hand her some fancy sounding title and pat themselves on the back about being equal-opportunity before moving back to the fratroom.

This is about the total numbers of women not a single woman....50% of the population gets less than 5% of VC investment and forms less than 10% of sitting VCs....

So what are YOU doing about it?

I can tell through very specific experiences that finding funding as a women entrepreneur is a million times harder -- just ask the folks at Zipcar.

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It’s a fair challenge.  Although we have
no women partners, out of 6 associates in Flybridge’s history, 3 have been
women.  As for start-ups, we have funded a number of women founders/CEOs,
including Marsha Moses (Predictive BioSciences), Miriam Tuerck (Infobright), Margolein
Brugman (LighterLiving) and Laura Fitton (oneforty).  We work hard to be
unbiased in this regard, although we are by no means perfect.



lets get to some specifics. How many women entrepreneurs have you funded? How many women VCs have you mentored? Have you ever hired an ugly as sin woman? Have you ever hired an ugly as sin man?

Eventually its about what we do to change the situation. A token bimbette with no interest in womens rights in a fancy title doesn't do it -- we need to change the fact that 50% of the population gets less than 5% of VC funding....

Which means
1. Consistently hiring larger PERCENTAGES of women
2. Consistently funding larger PERCENTAGES of women
2. Hiring women who care about women's rights and don't see gender as a means of getting ahead personally while refuting their feminity -- hello Carly...

Cisco was founded by a woman, so was Staples. Give us a chance to show you what we can do and we'll create a better world for your daughter to walk/work in.


I took you up and I've run a small experiment to test this problem.

I approached a VC (whom I do not know) directly. I spoke to the gentleman in question and was impressed by his approachability. Unfortunately when it came down to decision-time at the end of the meeting, risk in his mind was only mitigated when he knew the person...Therein lies the catch-22.

Alas, we women entrepreneurs dont hang out with you -- play golf, grab a beer or whatever. In fact it looks rather wierd when if we approach you that way especially if we have 2 kids...

So at the end the VC decision gets driven by his comfort with a purely male ecosystem...

So I ask myself in the experiment, what could I do to convince the said VC gentleman that women too are low risk, high return bets, even though we don't hang out as part of your golf buddy network...

Jeff, you want to fix the system, fix it here. Don't just blog about it.

Jeff, on this subject, I wonder if there are a few Boston area Venture Capitalists -- particularly those who are biking enthusiasts or who own a yacht -- who might be hiding today's NY Times business section from their wives. http://nyti.ms/WhySoFewWomen

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Des – I have only one word. Ouch. I’m
embarrassed for our industry.

From: TypePad

Hi Jeff
Sometimes I find it hard to believe that we haven't made as much progress since we launched Springboard 10 years ago. We also thought if there were more women VCs there would be more funding going to women-led ventures. Which comes first the chicken or the egg? I guess we just have to keep on filling the pipeline at both ends.

I really appreciate this blog entry and moreover this attitude. I am a 20-something woman who has an MS in Cancer Biology and an MBA from a top 10 B-school. I am part of a start-up bio-tech/ pharmaceutical company. When networking or fund-raising, despite my technical background and being the leader of this company,I am rarely treated with the same respect as my male partners. While at times this discourages me, I know my expertise, my passion, and my vision will eventually prevail. I hope more people, men and women, take your stance so that good businesses succeed despite the prejudice.

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