How Two Female Investors are Using Resilience to Innovate the Venture Capital World

In this article, I teamed up with writer and researcher Jasmine Eskenzi to look at some amazing women using resilience to innovate in the field of venture capital. Jasmine and I share a passion for more inclusive investing; me as an angel investor and Jasmine as a Co-Founder of Health Tech Hive and the Women in Health Tech Supper Club. 

In honor of the start of the annual All Raise VC Summit, the event that brings together over 600 female investors in California, we'd love to hear your suggestions in the comments for great female investors to follow! (And, hopefully, to add to the ever-expanding list of 99 Female Innovators Forbes Forgot!)

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This year, the World Economic Forum announced that it will take 208 years to achieve gender equality in the US alone. That means that the next six generations will not live to experience gender equality, despite the fact that (more than) half of the world population is women. When we look at this from the perspective of specific industries such as investment, we can see the sheer extent of gender inequality, with Fortune Magazine reporting that only 2% of Venture Capital funding goes to female founders, which comes as no surprise when women hold only 6.6 percent of Fortune 500 CEO roles. (And let’s not forget the recent dumpster when Forbes Magazine published a list of 100 innovators with only 1 woman on it! See my “corrected” list here.)

So what do you do to fix reality?

You innovate. With resilience. (I call this resilience innovation.)

Inbal Polak and Orit Alperovitz, Co-Founders of NEOME, a women’s angel investing network, are two women who have used their own stories of resilience in the face of discrimination in the investing world to innovate and make things better for all female investors going forward. 

The Catalyst for NEOME

After years of working as Fund Analysts and Lawyers at some of the biggest investment banks in the world, Inbal and Orit, decided that they were fed up with being a minority in the room and decided to dedicate their time to developing an Investment Club and community to change that. 

Orit says, “From working in heavily male-led corporates for many years, I began to notice the existence of exclusive men’s clubs, where the biggest decisions were made. It quickly became evident that despite having women in the boardrooms, they were not part of the most impactful conversations, which were happening over lunches, dinners, sports meetups or drinks. It became clear that we needed far more women in the room to create a balanced, more inclusive dynamic. After conducting extensive market research, we found a considerable number of women who expressed their wish to do investments and to be more involved in the investment decision process. But we understood that to turn this into reality we needed to establish the right environment. With the lack of confidence and financial illiteracy shown, it became clear that a female investment club was hugely needed, and that was when our club began, and we never looked back.”

The Stats

While many articles have postulated that women are ‘less likely’ to invest in stock than men, several recent studies have shown that women who do take the plunge actually outperform men when it comes to investment returns. 

A recent study by investment platform Hargreaves Lansdown, proved that their female investors returned on average 0.81 percent more than men over a three-year period, which would translate into a 25 percent increase over 30 years. 

Why?

Statistically, women tend to look more towards the long term. Orit notes, “in investment it is easy to be impulsive, men commonly take more risks, whereas women are seemingly more considered and if you are patient you can enjoy the cycles and have better long term returns.” However, Inbal mentions that women are often far more risk-averse, with a more cautious approach to investment. In order to combat this obstacle, NEOME conducts due diligence on each of their start ups, taking their investors through the screening process. Also, through diversifying their portfolio and investing into companies as a group, the risk becomes more manageable and the long term return more secure. “Through women taking ownership of their investments and educating themselves on the entire investment process, we can change the narrative and society’s perspective. More women can then be encouraged to enter the space, as you often can’t be what you can’t see. Therefore we hope our members will inspire their daughters and friends to develop confidence in their investment abilities”.

Making Lasting Impact with Money

We live in a world where change is driven by three main catalysts, policy, media and money, argues Inbal, “From our background working in the capital markets, we have found that if you want to make a sustainable impact, you have to back it up with investments. With the media, it can be here today, gone tomorrow. With policy, it can take years to come to fruition. With investments you can act now and it can have lasting impacts to build foundations for the future.” 

In order to reduce the gender gap, every company that NEOME invests in, must adopt their Gender Equality Memorandum, which includes one fixed salary to every role, regardless of gender, to avoid payment inequalities. “In order to reduce the gender gap, we need women to be in the shareholder positions. Once women are shareholders, they have a position to establish the companies’ DNA, to ensure that the pots of money are evenly distributed to all areas of society. We want societal change and as an investor, you have the opportunity to make that change.” 

How Will We Know When Equality is Actually Achieved?

It’s clear we need equality in the financial world, but how do we know when we have actually achieved it? Orit says, “A few years ago I heard a powerful woman saying that true equality will occur when mediocre women will take over senior positions. Back then this statement was very difficult for me to accept. Today, I see her point, as I have met so many mediocre males in senior positions but the women you see in those same senior positions are not less than brilliant.” 

NEOME, they believe that through impacting and empowering the women in their club, they will create a greater ripple effect of change for the generations around them. Especially for their daughters.

For Orit and Inbal, a huge driving factor for the future is to strive towards a world where our daughters are given autonomy over their financial decisions, they feel confident to enter all currently male-dominated industries and where they can expect equal pay, and where they are not a minority on investor boards (I call these “moards” (moard = all-male boards). See some choice ones here!). 

While asking for equality seems like a fair and rational demand, we still have a long way to go until this is achieved. Through giving women the tools and opportunities to achieve high-level success, shifting the social narrative and welcoming even more inspiring female role models into all industries, we can hope to move forward quicker than 208 years to achieving equality in the investment space and in society as a whole. As Inbal says, “These are our goals and our targets, we will keep on pushing until they are achieved.”

Thanks again to Jasmine Eskenzi, Head of Partnerships and Content at Collider Health, for the research on this story. 

In honor of the start of the annual All Raise VC Summit, the event that brings together over 600 female investors in California, we'd love to hear your suggestions in the comments for great female investors to follow! (And, hopefully, to add to the ever-expanding list of 99 Female Innovators Forbes Forgot!)