Data works
There was a great article in Fast Company called When Data – Not Humans – Guide VC Funding, More Women Win. I can’t help but say “no shit”.
On crowdfunding sites such as Circle Up, Kickstarter or SeedInvest where businesses post their businesses and plans to raise capital nobody is looking at the person behind the ask. If is different when a woman walks into a room of men to pitch them on her company. I see it every single day. I could point to too many businesses that are founded by women and have a hard time getting funding…and it isn’t the business. These particular businesses would get funded sooner and easier if the founders were men.
The good news is that the data is positive on these sites but the data is also becoming clearer around the ROI in women led companies. Women led companies perform three times better than their male counterparts. Of venture backed companies, women-led start-ups have a 35% higher ROI and 12% higher revenues than their male counterparts. That is data.
More women will begin to pull out of the box and become known for what they are doing. Women who were funded 4-5 years ago will eventually rise to the top to become either publicly traded companies, have fantastic exits or perhaps become households names. Then, regardless of only 6% of VC’s are women partners, we will see a shift because data speakers louder than words.
Comments (Archived):
I don’t understand who is making the decision not to fund based on gender. In all my years of working with startups I have never seen it. I hear anecdotes, but personally have never seen it. Nor have I ever thought of not investing because a startup is women led. The data is nice, but as we know people don’t always make decisions based on data-see the 4 leading Presidential candidates as evidence! : )The angel group I co-founded, Hyde Park Angels has always been inclusive not by conscious choice-but because women were the most interested and qualified to join/lead. Ironically, the attorney that did our paperwork was female too.I am wondering if this is less a discrimination problem, and more of a throughput problem. I see more women coming to the entrepreneurship table, but they are still a minority. They also are making different choices-meaning instead of doing scalable startups they are choosing to do agency businesses because of lifestyle choice.Yesterday I was at the University of Illinois speaking and doing office hours. In one class, 30% of it was female. In a lecture I gave, it was probably 20-30%. Thinking if I would have done the same thing five years ago the numbers would have been less. I would love for it to be 50/50, but the needle is moving in the right direction.Shameless plug, I supported this Kickstarter and hope you can too: https://www.kickstarter.com…
the needle is definitely moving in the right direction.
Mike Moritz said this on national TV and was lambasted for blaming the “throughput” issue.As a founder, I see female founders being discriminated against (not actively, but subtly, unconsciously) – with raise terms, valuations, metrics, male assholes trying to cop a feel, founder salaries, mansplaining in the boardroom, and arbitrary personal life questions that have nothing to do with the business.I also see awesome organizations like 500 Startups and people like Joanne consciously doing NO FAVORS to the founders that pitch them, but selecting amazing female founders because they are *good businesses* and deserve to get funded for their hustle alone.So the bias may not be visible, but it is DEFINITELY there.
Interesting. I am in Chicago, so I am in a bit of a bubble since we have more female lead startups than the rest of the world. I just cannot imagine in this day and age a person using their power to try and get in someone’s pants but I have heard it enough that I am sure it happens.
I have heard confidential first hand accounts that make me shiver.Thats also a reason why these data driven investing platforms are a godsend. Angellist syndicates still depend on the Syndicate Lead to initiate the deal so its not that disruptive.
it definitely is there.
If you have never seen bias against women, does that mean it is not there?According to Mahzarin Rustum Banaji, a social psychologist at Harvard University, “…everyone carries with them implicit biases that may change how people perceive or interact with others.”Unconscious bias is a tricky beast. We all have blind spots.Article on her work: http://archive.boston.com/n…Link to her harvard page: http://www.people.fas.harva…
Interesting
I haven’t personally seen the explicit and crass anecdotes that I’ve heard of but in my gut I do believe that there are a lot of liberal-minded, diversity intended VC’s who have tremendous unconscious bias – the whole pattern recognition mindset they use reinforces it.
I have seen the explicit anecdotes first-hand (among others, someone had reservations because I “didn’t look like a CEO.”) That said, I also got a lot of really great feedback on what *actions* I would need to take to succeed, or what results I would need to demonstrate to prove the idea could scale—and the ability to incorporate that advice into my overall vision was often game-changing. Reacting to good advice with results-driven actions has always been a more effective strategy for me than reacting negatively to sexism and bias. However, I really appreciate when it is called out on a societal level and people work to create positive change.
I love that you are writing about this! There is so little analysis of this invisible issue – it is the elephant in the room that I smell all the time but it is hard to name. Keep it up! Data is hard to refute.
While I believe that women-led companies are superior :), there is a bias in the current data around women-led companies performing better. As the barrier to entry is much higher for women, there is most likely a selection bias for women-led companies that receive VC funding.
There is no doubt that numbers are fungible. Less more qualified women equal better returns.