Less than 5% of our LPs are women, and here's why.

Written by Isabel Fox.

This journey has been a long one and not an easy one. I think the easier option would have been joining a more established venture fund but I decided to go it alone mostly because I didn’t come from a traditional background for most VC firms and had received negative comments over the years that had put me off.?

But it’s my diverse path to venture capital that gives me the network and connections. It also gives me access to a very powerful group - women - female entrepreneurs and VCs. And that diversity of relationships formed over decades is what gives women-led funds an edge and increases the likelihood of a better society for us all with products and services targeting underserved markets.?

Yet, there’s always been one group that has remained challenging for me - Limited Partners (LPs). Fundraising is all about connections. It remains challenging for female led funds to receive the funding they deserve as our contacts are rarely the ones making the decisions. Over 90% of the industry is controlled by men. It is an insular business where networks matter, where a lot of deals are done based on people you know, people you trust, people you went to school with, and currently these networks are predominantly filled by men.?

Some of my learnings from our fundraising:

• We still have a lot of work to do to address the unconscious beliefs, attitudes and stereotypes from LPs to female led funds.
• LPs need to get comfortable investing in “non-traditional” fund managers that may not have a track record. It takes years to build a portfolio, demonstrate performance, and get big exits to establish the brand.
• Supporting women GPs is a step towards overcoming the wealth gap and changing society for the better – it’s a cycle - more female founders receiving investment – more women invest in funds – and so it continues.
• While well intentioned, diversity initiatives within an LP group are limited and the larger capital opportunities remain with the “core” fund investments which just sits uncomfortably for me.?
• Institutions often have minimum check sizes and ownership stipulations that make it difficult to invest in funds under ￡100m and not helping the 90% of female led funds that are categorized as emerging managers.?
• Although colleagues looking to be helpful make introductions with the diversity angle, it would be more helpful to open up neutral capital opportunities. This unconscious bias is a challenge.?

Thank you to all the incredible women who have made introductions and gone the extra mile to help. It is much appreciated.?

If I can help you - just message me.?

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This?blog post?was originally posted on?Outsized Ventures' website.