Business

How VCs can help us solve tech’s problem with women

Image Credit: http://www.flickr.com/photos/georgholzer/878963694

Everyone in tech seems to be talking loudly about the industry’s problem with women. Google and other Internet giants are self-reporting the grim gender gap in their companies, and making some laudable efforts to address it.

Tech media sites are covering the issue on a regular basis, if only because of the incessant news of sexist and otherwise bad behavior of tech executives. Women in tech, of course, are discussing the topic, and amplifying the conversation as never before (for reasons I’ll discuss more below).

However, apart from some notable exceptions, there’s one group who’s mostly staying quiet on the subject: Venture capitalists. Their silence is a mystery to me, because they have the most to lose from industry sexism — and the most to gain from demanding we improve.

Throwing good money after bad men

The thought occurred to me after reading about the latest example of juvenile offensiveness from a top executive at a hot startup: Aren’t the VCs who gave him so much money furious? Tens of millions of their dollars put in jeopardy not through a sudden shift in the market or change in business strategy, but bad personal behavior from grown men.

During the pitch session, did these VCs not do due diligence on the moral character of the founders — or at minimum, ask them if they have any skeletons in Google’s eternally searchable closet?

It’s stranger when founding executives are revealed to be sexist even though they’re leading startups utterly dependent on finding and keeping female customers. Venture capitalists pride themselves on maximizing profit, but their repeated backing of sexist founders threatens to disrupt their own investments.

How social media makes the problem better — and worse

Also notable is how many times tech exec sexism has been exposed not through Valley news sites, but through these execs’ own personal use of technology — via crude Tweets, Facebook updates, Instagram comments, e-mail, smartphone texts, etc. — revealing a profound misunderstanding of how the technology they’re supposed to be innovating on actually works. (This should be yet another red flag for their venture funders.)

On the other side of the ledger, social media also empowers women to stand up for themselves, call out bad actors, and amplify their grievances, as never before. #yesallwomen is not an anomaly, but the latest example of a trend that will only grow and expand. Thanks to tech, women have the tools they need to push back against tech’s problem with women — insuring the issue won’t be sidelined anytime soon.

Putting women in the business plan

Venture capitalist Natalia Oberti Noguera has a requirement that startups pitching her angel investing bootcamp include a female co-founder, and while it’s a great idea for her firm, which specializes in women-led startups, it’s probably not scalable into the Valley’s main line VC community, at least not for the short term.

Instead, the change that must happen first needs to be public-facing and pervasive, with VCs clearly conveying, via their websites, their social media channels, and speeches they make at incubators, hackathons, and other venues, the simple fact that adding women and attention to women to their business plan isn’t just a political nicety, but in a startups’ naked self-interest.

But it must go beyond that. To maximize their profit, VCs could even impose expectations on startups in business now, demanding that they not only make revenue and user growth targets, but hit milestones on the number of female executives they’ve at least attempted to recruit. (Companies with more female executives perform better, as do venture-backed companies with senior female executives.)

This also means creating and fostering an overall work environment that encourages both men and women to behave appropriately – not just to avoid lawsuits, but to better insure long-term profit.

Earlier this year, influential VC Hunter Walk proposed a system to track diversity in their investments, which I hope becomes an industry standard.

Another actionable step is to require that HR become a significant part of a startup very early on, to help establish a positive company culture — and, frankly, to train young founders in the basic standards of good character that many of them evidently didn’t learn from their parents.

And just imagine if, during any pitch session, a venture capitalist politely but firmly asked every budding young male entrepreneur: “Explain to me in detail how your business plan will earn revenue from women. And if you can’t, explain why I should give any money to a startup which ignores half the market.”

Alternatively, VCs could remain silent, and hope the problem goes away. Which essentially means gambling that the next PR disaster around this topic doesn’t risk their money — though the odds are, it inevitably will.

Vanessa Camones is the founder and CEO of theMix agency, a full-service marketing and communications boutique.


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12 comments
Robyn Cohen
Robyn Cohen

This essentially proves the point of the article - http://womenonit.com/2014/07/30/techs-gender-problem/. Although, one thing that gets under my skin is the incessant focus on all the issues that face women in tech. It's not just in tech and quite frankly, never has been. Obviously due to tech being in every aspect of our lives, it's natural to focus on it, but it's important to share and discuss what's happening in every industry. 

Alastair Goldfisher
Alastair Goldfisher

Thanks for the column, Vanessa. I’m not sure some of the people here read the same thing I did. But here goes. I often relate the bad behavior that we're seeing at various tech companies to a lack of women in VC and tech. Not that women don’t behave badly, but having more female GPs and board members would certainly help remove the frat boy atmosphere so prevalent at many companies and firms today. There’s no denying the numbers of women in VC is low. And I’ve heard horror stories about sexism taking place within various venture firms and against the female entrepreneurs who pitch the firms. That’s sad, considering there are top-notch female VCs making investments. But it’s always surprising to see how few get noticed in various rankings, like the Midas list, for example. However, I disagree that the VC industry is ignoring this. I hear from male and female VCs about the issue of the declining number of female investors. The discussion about diversity, in regards to ethnic and gender, was front-and-center at the NVCA’s annual meeting in May in San Francisco. One VC at the conference told me she’d like to see more study of the numbers and see if we can trace the trends. Perhaps that’s something akin to what Hunter Walk suggests. I’m not so sure creating a mandate, like what Natalia Oberti Noguera suggests, would work, since the VC industry is notoriously against compulsory rules and regulations. Meanwhile, Maria Cirino of .406 Ventures is taking up the issue of gender equality, and others, includingRebecca Lynn from Canvas, Maha Ibrahim from Canaan, Katherine Barr at MDV and Sharon Weinbar at Scale Venture Partners have spoken at our conference about gender issues, helping to inform a wider audience. Plus, what should give you hope is that we’re seeing more female GPs launch firms in recent years like Cindy Padnos of Illuminate Ventures, Eileen Lee at Cowboy, Kirsten Green of Forerunner, and Jennifer Fonstad and Theresia Gouw have kicked off Aspect Ventures. On top of that, firms that have launched in the last decade, like 500 Startups, SoftTech VC and Felicis Ventures, among others, tend to back a diverse range of entrepreneurs and are they themselves composed of diverse teams. Look, these are small gains when it comes to the big picture. I get what you’re saying. But I’m more hopeful that the tide is turning.

Ank 123
Ank 123

Amazing article! It is like women almost have a right to be hired in start ups. And Vanessa wants the VCs to enforce that 'right'!

Bonnie Foley-Wong
Bonnie Foley-Wong

I agree, Vanessa - in my opinion, investors hold a key to leadership diversity in our economies and societies. There are structural and systemic barriers to women having equal voice, power, and influence in venture and business, barriers that some people cannot see if they themselves have not experienced them.

Fortunately, I did have the opportunity to learn how to code at an early age - not because I was a girl, there were no codecamps for girls back then, but because there was a new computer at my elementary school called PET and we had the opportunity to learn BASIC. I had the opportunity to get a Mathematics degree (in the process I learned more programming, however rather than choosing a path in Computer Science, I chose a path in Finance). An interest in investment decision-making led me into the world of investment banking in London. In 2009, I finally acted upon a persistent niggle to do something more impactful and purposeful in my life and transitioned into impact investing.

I am now closing the first tranche of an early-stage impact venture fund investing in leadership diversity and building a venture fund management company, Pique Ventures, alongside it. In the last 3 years, I have become more exposed to the challenges that women face in business, entrepreneurship, and the investment industry. It's not that suddenly these challenges have appeared in the last 3 years, but rather I've become more aware of the subtle, embedded barriers that I too was exposed to in my career, but did not take notice because my head was down, doing deals. I am also now in a position to do something about it.

I invite you to read a series I wrote for Social Finance last year:

Part 1: http://socialfinance.ca/2013/08/08/from-scratch-the-story-of-one-womans-quest-to-create-an-investment-firm-wit/

Part 2: http://socialfinance.ca/2013/08/27/gender-and-investing-where-are-the-women/

Part 3: http://socialfinance.ca/2013/10/09/putting-it-in-practice-enabling-diversity-in-impact-investing/

I applaud some of the changes you suggest in your article. We still have a long way to go, but just letting you know you're not alone on that journey.


Park Clayton
Park Clayton

let's flip this script... how about the industries dominated by women? there aren't barriers of entry into the tech field for women, it's more so that women don't have interest/want to be in these type of industries so let's just let that be and not force the subject onto others - it's not like they are preventing women from joining the field, as a matter of fact i'ms rue they would applaud qualified women into joining the tech/any other industry where women participation is low - standards/minimal obligations are just factors that are set up to ensure that there is at the least a minimum amount of "goodwill" passed onto others from businesses, corporations, entities, organizations, etc

Paul Vance
Paul Vance

..there's not police in anti-riot gear pushing back any female within a 50 meter radius from getting into to a VC office. If anything Women are more appreciated and get special attention because its such a sausage fest already and its nice to have some women around, VentureBeat theres no "Problem"

Andrei TheGiant
Andrei TheGiant

i propose tech journalists should castrate themselves.

Nadav Ben-Haim
Nadav Ben-Haim

the tech journalists won't be happy until there is an exact equal number of men, and women, (actually they'd be happy if it was 100% women), an among them an equal ratio of blacks, latinos, whites, asians, indians etc, even though it makes no logical sense. They are nonetheless obsessed with it

Josh Poulain
Josh Poulain

Everyone in tech meaning all the tech publications that don't seem to get that it's a simple matter of math... more men enter Computer Science programs than women, therefore men will make up a higher percentage of the workforce. It has little to do with the tech-industry, but more the PRE-tech industry. The path to more women in tech has to do with getting girls and women interested in tech as children and encouraging them to pursue STEM subjects in post-secondary.

Vanessa Camones
Vanessa Camones

Nadav, I am NOT a tech journalist. So I am not sure how your comment is relevant. 

Vanessa Camones
Vanessa Camones

Josh, the tech industry does not just need women engineers. Please expand your horizons and educate yourself as to ALL the roles that women can fulfill without needing to be engineers.