Combating Sexism and Creating Opportunity
– By Anu Duggal
This past week’s disturbing revelations of sexism and sexual harassment in the venture capital industry sent shockwaves through Silicon Valley. At Female Founders Fund, the only thing we were shocked about was how long it took for these disgusting incidents to become public. Over the past three and a half years, we have spoken with thousands of female founders and heard these stories and worse. We encounter countless women who, in the face of incidents like these, either tolerate the indignities because they believe in their ideas, or understandably become disillusioned by the industry and choose to put their passions elsewhere.
Being a woman doesn’t need to be a lose / lose equation — and that’s why we started Female Founders Fund. By capitalizing on the systemic blindness towards female entrepreneurs, we are both creating a powerful ecosystem for these women to succeed, while also addressing one of the biggest market discontinuities — and one of the biggest opportunities — of our time.
Let’s start with the numbers. Only 7% of venture capitalists are female, and since early stage investing is very much betting on founders you think can build billion dollar businesses, it’s not entirely surprising that VC’s end up backing individuals that look like the venture capitalists themselves, or are part of their network. Last year, $58B of venture funding went to male entrepreneurs, compared to $1.5B to female entrepreneurs. However, the reality is that not only do women overwhelmingly dominate consumption, but they also are uniquely positioned to build businesses that capitalize on their own insights as customers.
“… we are both creating a powerful ecosystem for these women to succeed, while also addressing one of the biggest market discontinuities — and one of the biggest opportunities — of our time.”
We believe that funding a strong pipeline of female founders at the early stages, and making it possible for them to succeed within the venture ecosystem, is fundamental to the growth and evolution of the industry. As part of the Female Founders Fund ecosystem, these founders get access to a peer network of female founders who are facing or have faced similar issues in scaling their businesses. Creating a community and space for female founders to share experiences and get advice from their founder peers is invaluable, and this collectively shared knowledge has been an incredible asset for the women in our portfolio.
In addition, we help these founders get plugged into the larger VC ecosystem and prepare them for the fundraising process. An HBR study that was published just last week found that investors judge female founders more harshly than their male counterparts, which results in male-led companies raising over 5x more capital than female-led companies. We work with founders to address this issue head on. How do you pitch to an audience of primarily all-male investors? Who are the VC’s to avoid who have a reputation for not respecting women? How do you illustrate the size of these market opportunities that often target the massive female consumer base and can be easily overlooked by more traditional male venture capitalists?
In order for the industry to change, we need to bring these women’s stories out of the shadows. In the past few days, the media has accomplished that. Now is the opportunity for the rest of the VC world to see what we have always seen — the power of these female founders and the power of their ideas. We need to see more women investors bringing in differentiated deal flow and perspectives. We need to see more women build and scale successful tech companies, bringing female insights to female markets. As more female founders raise capital and go on to build successful technology businesses, investors will recognize that they are truly missing out on massive opportunities by dismissing these female founders and ignoring their potential to create financial gains. This is our mission at F3 — and this is the challenge we offer to the venture capital industry.
