Discrimination: The way women are treated

Some commentators argue that women simply aren’t choosing to be in tech and aren’t treated poorly at all.

Wadhwa has conducted years of research on this topic. He vehemently disagrees. “Women in the tech industry aren’t treated right, and that’s a fact,” he told me.

His team at Stanford, in conjunction with the Kauffman Foundation and Women 2.0, recently completed a survey of 500 women tech entrepreneurs.

The preliminary results found that 18 percent of women in tech had experienced discrimination. According to the research, which will be publicly released in a few months, the average tech workplace is a less-than-inviting environment for women and minorities, who deal with negative workplace experiences at much higher rates than do their white male counterparts.

One potential issue is that human resources is typically lacking at early-stage tech startups. Jokes and wisecrack comments might appear harmless to some, but women and minority groups may perceive them as offensive.

A friend who recently relocated to Silicon Valley to join a cloud computing startup’s marketing team, admitted that she often feels uncomfortable by off-hand remarks and comments. For instance, a manager will joke in front of her male colleagues that she should clearly be the one to present to potential customers. By his tone, it is clear to the team that this has nothing to do with her knowledge or intelligence.

Women will often reveal how they’re really treated by their bosses, colleagues, and potential investors in private, but will rarely agree to be quoted. Take a look at the media frenzy around the Kleiner Perkins sexism scandal to understand why women might be reluctant to speak up.

Obstacles in the fundraising process

When Anda Gansca and Stephanie Volftsun first met, they had a gut instinct about starting a company together. For one thing, they were both sick of being the only women in the room.

“I told her [Gansca] I would never work for a man again,” Volftsun half-joked, referring to her recent stint as a data aggregation engineer at a Silicon Valley startup. Little did they know that in a few short months, the cofounders would be leaving meetings with investors who simply couldn’t get past the “woman thing.”

“Our gender is almost always the strongest thing they remember,” she said.

“According to most investors, an entrepreneur looks like Mark Zuckerberg: a white guy dropping out of Stanford or Harvard,” said Wadwha, who argues that investors too often “shun” women.

About 38 percent of U.S. businesses are owned by women, yet just 2 percent of the money invested by venture capital firms goes to women-owned firms, according to a survey by the National Foundation for Women Business Owners and Wells Fargo & Co.

Indeed, groups of investors typically fund hackers fresh from male-dominated tech accelerator or incubator programs.

“There is a bias toward technical founders in the Valley, and that contributes because there are far fewer women techies than there are guys,” said Jon Soberg, an investor at Blumberg Capital. “Networking is very important in VC, and given the industry has always been male-dominated, most VCs’ networks are male-dominated, and hiring often comes from the network,” he explained.

“I can tell you that a large swath of male investors who made money from Google or PayPal will never look at a female-led business,” Richardson agreed.

Many entrepreneurs tell me that fundraising is a difficult process for anyone. For women and other minorities, it’s darn near impossible to tell if they are denied funding because the product isn’t good enough or for a more sinister reason.

The Knotch team was successful in securing $500,000 for their app, but it was an ordeal. Gansca said they were consistently told by angel investors to consider pivoting to a “social network for women” (the founders are building a sentiment analysis tool, and 60 percent of its users are men).

More concerning is that Gansca was approached by investors who feigned interest in her startup but were more interested in her. “I can recognize now if it’s about Knotch or not — if not, I’ll instantly cut it off,” she said.

Padnos believes that women entrepreneurs would benefit from the opportunity to meet female partners like herself. Before she moved into venture capital and was fundraising for her startup Vivant, there were less than a handful of female investors.

However, Padnos is encouraged that more women are choosing to pursue angel investing and venture capital — or start their own firms. Her own Illuminate Ventures, Aileen Lee’s Cowboy Ventures, and Kristen Green’s Forerunner Ventures all have women leaders. Entrepreneurs can now access support from angel investor networks Golden Seeds and Astia.