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Strong Female Lead

What It's Really Like For Female Venture Capitalists In A Man's World

Faced with rampant sexism and ageism, female venture capitalists only comprise about 4% of the industry. Here's how women can rise above.

[Arguing couple: conrado via Shutterstock]

If you haven’t been hiding under a rock, you know the tech industry has a huge gender problem. A recent study shows how difficult it can be for women trying to make it in bro-centric Silicon Valley. Not to mention downright disturbing stories of women who have been put in compromising positions—all because they’re working in a man’s world.

Kathryn Minshew, cofounder of career advice site The Muse, was forced to fight off an investor’s advances during what she thought was a business meeting, and he thought was a late-night date. Or Gesche Haas, who recently came forward to Silicon Valley blog Valleywag about the time European angel investor Pavel Curda emailed her with a very direct message after their meeting at a tech conference: "Hey G. I will not leave Berlin without having sex with you. Deal?"

When the gender scale is that imbalanced, men don’t have to think about what’s inappropriate. Men make up the rules, and the women who want to play ball are forced to abide by it—or get out of the game. If it’s hard for women entrepreneurs, then it may be even tougher for female venture capitalists who make up just 4.4% of the industry, according to analysts at PitchBook. Hollie Slade at Forbes points out that the number of women financing startups is comparable to women coal miners and firefighters.

Sexism in Silicon Valley

Since entering the venture capital world in the early 1990s, early-stage investor Christine Herron has dealt with her fair share of sexism. She remembers one particular meeting while working as an associate for Geocapital Partner when the entrepreneur, right after shaking her hand, turned to her colleague and said: "Holy shit, Larry, you didn't say her legs were like that. We could have gotten this deal done a long time ago."

"Bias was very upfront then," says Herron. "On the one hand, I had great legs. I was 23. On the other hand, it was inappropriate." Herron says she's been to meetings where she was prepared to discuss her supply chain when, in actuality, she was asked about her dating status. Then she recalled a time when "an investor literally did 'the hand on the thigh' gesture during a meeting." Herron was so shaken up, she froze.

But Herron never came forward with these incidents because she didn't want to be labeled as a difficult person. "I choose very carefully what I complain about," Herron says. "I am always consciously choosing to not be labeled as a bitch. I'm choosing to avoid the negative because once you have that, it's very difficult to have the positive."

It's not just sexual advances that she's had to battle. In an industry where most think of a white man as the definition of success, Herron was once turned down for a promotion that later went to someone younger, had less experience, and hadn't demonstrated the work ethics needed to get the job. What he did have was that he wasn’t a woman.

Women in the Boys Club

Herron isn’t the first—and won’t be the last—female venture capitalist who knows that she has to work twice as hard as a man to get the same level of respect.

Kathryn Gould, who was once the founding vice president of marketing at Oracle and worked alongside Larry Ellison, found herself unemployed for far longer than she was comfortable with after the fall of her employer at the time, Merrill, Pickard, Anderson & Eyre. This might not seem so shocking, except Gould was one of the top performing venture capitalists in the early 1990s.

"I do think a man would have been snapped up immediately and I was not," she says. "But it’s okay because I started my own firm instead of waiting around for one of these ‘male firms’ to snap me up. In the end, it was probably better for me."

Despite being on numerous boards, Lisa Suennen, managing partner at Venture Valkyrie Consulting LLC, stepped down as chairwoman of a board two years ago because "as the dynamics of the board changed, it was obvious the old boys club was coming . . . and I didn’t feel like playing that game," she tells Fast Company. She writes that "there are definitely times when men want to be there for your first time, but when it comes to board membership that rule doesn’t apply."

"I think there are just certain groups of people—investors especially—who are less comfortable with women," she says. "It’s certainly not 100%, but it’s more than you’d like to admit."

More female women investors are needed in the cutthroat venture capitalist world. Below are three very important arguments why we need to change the ratio between men and women now:

1. Unfair "Pattern Recognition"

Tech investor Theresia Gouw, formerly at Accel Partners and recent cofounder of Aspect Ventures, writes in the Wall Street Journal that after 16 years of working with entrepreneurs and sitting on tech boards, she’s witnessed what’s called "pattern recognition," which is basically where investors decide to fund startups that match a pattern they’ve seen before in successful businesses or founders.

It doesn’t matter that data shows venture-backed companies with female founders or leaders are more profitable than those run by men, people like to stick with what they know. And what they know often comes in the form of a young, white man.

Venture capitalist John Doerr of Kleiner Perkins Caufield & Byers admits to using pattern recognition when he told Dow Jones VentureWire that he invests when founders share similar characteristics to established entrepreneurs Jeff Bezos, Marc Andreessen, and David Filo: ". . . they all seem to be white, male nerds who’ve dropped out of Harvard or Stanford, and they absolutely have no social life. So when I see that pattern coming in . . . it was very easy to decide to invest."

Paul Graham, who runs startup accelerator Y Combinator, says he can be tricked into investing any time someone looks like Mark Zuckerberg.

2. Male Entrepreneurs Must Be Accustomed To Working Side-By-Side With Women

More women investors would mean male entrepreneurs have more opportunities to work with various women in key roles. If male entrepreneurs become comfortable working alongside the opposite gender, then more women would potentially work in tech. Like all things that connect, these techie women may find themselves working as investors one day since this is how most people become venture capitalists.

"I think we need more women investors, women entrepreneurs, and women technologists," says Shereen Shermak, currently chief executive of early-stage venture capital firm Launch Angels. "The broader the group of people, the better the ideas are going to be."

Shermak is no stranger to being the lone female wolf of the pack. She started engineering school in 1985 where she was often the only woman in the classroom, and has worked in finance and technology her entire career. However, she knows how difficult it can be to be the only female around, so she pulled her daughter out of computer camp once because she was the only girl in the class.

"I didn’t want her to be alone," she says. Shermak’s daughter was later enrolled in a more gender-balanced computer camp.

3. Male Chauvinism Needs To End

To stop the gender bias stories above from becoming the norm, we need to have more women represented.

"It goes back to familiarity. To feel more balanced, you just have to have that representation," says Herron. "I know that if I host a party and I have 30% of women attend, it then changes the dynamic drastically."

"You make different decisions if you have diversity," she adds. "Everyone is going to have a different opinion because of their experience and your gender is definitely your experience. If you want better decisions, you need diversity, and being a VC is all about making better decisions."

We’ve heard the stories before, and some of us are even tired of hearing them. The numbers aren’t anything to brag about now, but they’re getting better, so why not sit back and relax? Why do we need to constantly talk about women in tech? Simple. Because if we don’t continue the conversation, it will die. Progress is never a guaranteed thing.

Only by having the conversation—no matter how tiring it sounds—can we put an end to gender bias, and women can finally have a fair piece of their hard-earned pie.

Join Leadership editor Kathleen Davis with Anu Duggal, the founder of FCubed (Female Founders Fund) and Kathryn Tucker, CEO and founder of RedRover, on Friday, March 6th at 11 a.m. ET for a discussion about the state of funding women-led startups.

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