In regards to the article Playing by the rules article in the Globe magazine section on Sunday 11/4/13 I am appalled; as a women entrepreneur, the CEO of WomenLEAD, Inc, a 2013 Mass Challenge Finalist and one of 10 Education Category finalist in the Verizon Powerful Answers competition; a member of the Boston Club (14 years); a member of the She-E-O’s and 85 Broads.
I agree with the premise that women entrepreneurs receive only a small percentage of VC money, but Fiona Murray does not have her numbers right and her suggestions of how to solve the problem are insulting to women.
Recent statistics that relate to women in the venture capital industry come from The Diana Project, Illuminate Ventures and several other organizations that aim to expose gender inequality. The data raises huge questions: Why do big-named venture firms appear to be discriminating against women? Are the firms “old boys clubs”? Do founders struggle to trust women on their boards? Are females passed up for venture jobs?
Homophily, or “the principle that people naturally favor others like them” and networking issues apply when male venture capitalists choose to invest in certain companies.
Female-founded companies make up only 10% of venture-funded startups, and only 3-5% of female-owned businesses receive venture money.
These numbers are even more confounding when it is considered that women-operated, venture-backed companies have 12% higher revenues than those of men.
The solutions to the problem that Fiona Murray proposes in this article are insulting to women and lack a systemic perspective of the problem.
Her solutions of Wear a uniform; Speak confidently and assertively; Network ; and Watch sports does not address the issue .
The root cause of the problem is that men have a bias about women entrepreneurs, they are not aware of their biases and the VC industry has been an “all boys club”.
I was recently at a meeting with Steve Case speaking (former AOL CEO and on Obama’s team for entrepreneurial policy). He addressed this issue at the meeting offering that crowd funding would help to level the playing field for women and in fact he suggested that the “all boy’s club” needs to shift to include women.
Another man at the meeting chimed in with “well after all women start up knitting stores and catering business so they do not need VC’s they can cover all of their costs with 20K”. I was amazed that this gentleman could not see how insulting his biases were, I was also embarrassed for him. This bias and way of viewing women entrepreneurs demonstrates the same thinking that has caused such a chasm in VC funding of women owned business.
Jules Pieri; CEO of the Grommet said this in her 9/1/13 post on Huffington post;
“Starting high stakes companies depends on having access to capital. Like sports, you can’t train, compete, or win without meaningful infrastructure. With only 4-9 percent of venture funding going to women, the damning lack of infrastructure is obvious.
The good news is women stand ready with legions of investment-worthy companies. The track record of female founders even shows superior investment returns compared to male founders.
Jules Pieri’s suggestion is that the government role could be simple: remove the lucrative carried interest tax loophole from any venture firms that do not fund women’s businesses proportionate to men’s”.
This well thought out systemic perspective will surely get to the root cause of the issue and will mandate a solution. There are also Angel investing groups focused on supporting women owned companies like Golden Seeds, Astia and Pipeline Fellowship all committed to making an impact on this issue.
WomenLEAD, Inc is out to make a global impact by developing women as leaders with our online personal advisory board platform. We are committed to having women entrepreneurs get the resources they need through Angel and VC funding so that they can turn their big dreams into reality.
Ilene Fischer CEO WomenLEAD, Inc