The Trillion Dollar Case for Gender Lens Investing
“More than 50 years ago, Gloria Steinem said, "We will never solve the feminization of power until we solve the masculinity of wealth.”
Today, both the equation of "Wealth = Power" and the masculinity of the control of wealth remains firmly in place. We may not like that equation, but we'd better deal with it or suffer the consequences at our own peril.
The language and action around female tech entrepreneurs remains drenched with the assumption of masculine superiority and the assumption of feminine inferiority. Female tech startup founding teams receive merely 2% of all venture capital while all-male teams receive over 80% of VC funds. Mixed gender teams led by men receive 98% of the balance. Founding teams that consistently provide the highest ROI to investors – women-led, mixed-gender leadership teams – receive 2% of that balance. At Series A, women command 18% of the valuations enjoyed by their all-male team colleagues. And upon exit, women consistently return an average of 35% higher ROI to their funds. I am hard pressed not to use an exclamation mark at the end of every one of these stunning statistics.
Women do not need more university degrees, mentors, advisors, courses,
classes, incubators, accelerators, or peer groups that offer coffee and a shoulder to cry on. They need capital!
Why is the money not following the money?
The answers lie in several areas. Most often noted is pattern matching: 96% of decision makers in venture capital are men and there are an insufficient number of women who have built and run multinational technology corporations to ‘comfort’ the subconscious brain of those men.
Just as culpable is the lack of acceptance of data.
Nearly eight in ten investors say that multicultural and female entrepreneurs
receive the right amount, or more, of capital than their business models deserve,
yet these same investors dramatically underinvest in this population1
At the same time, men are 45% more likely to receive funding when pitching the exact same business idea as the women who ideated those ideas. In other words, when pitching to a male VC, hire a male to make the pitch to increase your odds of obtaining funding. A sorry state of affairs.
According to the World Economic Forum’s most recent Global Gender Gap Report, this trend is could continue for years and the United States, “land of the free and home of the Grand Experiment in democracy” is a miserably low place holder in this snail’s race to equity.
At current rates of progress toward gender parity, the gender gap will close in:
- 61 years in Western Europe
- 70 years in South Asia
- 171 years in East Asia and the Pacific
- 165 years in North America
ACTION AND SOLUTIONS
Fortunately, there is hope on the horizon. The Seattle based gender lens MastersFund™ is joined by more nearly a dozen other new venture funds chartered to source, fund, and support female founders in the technology sector.
Until the money comes from people that look like us, we will not be funded.
– Nathalie Molina, author of Leapfrog
The MastersFund is joined by more than a dozen gender lens funds that are either growing out of angel groups or newly launching around the United States today. We are seeking qualified women and making our case to have them join the effort to end the massive imbalance of access to capital and change, once and for all, the equation that confines women to subjugation in the global market. Isolation keeps us small; collaboration among these senior women in venture capital, regardless of how or where they fund, will raise all ships.