Women in Tech – why even bother?

Almost a year ago, I was giving an opening speech at the “Women in Tech” startup acceleration program Demo Day. The first row was occupied by the VC representatives – 80% of them were obviously guys. And I decided to run this mental experiment.

I told them: “Now we are going to play a game. Close your eyes and listen to me. Image the startup founder you would like to invest in. Professional, strong, with exceptional communication and social skills, someone that you would consider to be an ideal iconic startup founder. Now open your eyes. And please, raise your hand if you have pictured a woman.”

Guess, how many hands were raised? 

"One study from 2014 used identical slides and scripts, voiced by men and women, with or without photos of the ‘presenter’, and then asked study participants to rate the investment. Pitches voiced by men significantly outperformed those with a woman narrator, and pitches, where the narrator’s picture was a good-looking man, performed best of all."

Cognitive biases are a part of our life, sometimes we recognize them when we dig deeper, sometimes we don’t even think there might be any. And when I mention gender bias in my venture community, the male investors tend to tell me that there aren’t any. It’s just that the number of female founders is naturally significantly lower than male ones, that’s why male teams have better chances to succeed. 

Naturally? Let’s have a look at it.

So we are born women in a pretty privileged part of the world – in Europe. Thank God we don’t have to get married at 12 or have 3 kids till twenty. We can graduate from university, we can have careers, we can even fly to the moon.

For some reason, it’s called gender equality. Okay, let’s figure out how it works.

An American study showed that the public has very different views about what society values most in men and what it values in women. While many say that society values honesty, morality and professional success in men, the top qualities for women are physical attractiveness and being nurturing and empathetic.

Women can pretend that they don’t give a damn. We can actually not give a damn. But how many people do you know that couldn’t care less about the expectations of society? Do you care?

Moving further. 44% of women founders said they have been harassed. Now some readers will roll their eyes and say “Oh, yeah, another Hollywood-style allegation”. But there is a thing. Harassment happens when someone in a power position abuses someone less powerful. Statistics tell us that investment businesses including investment management, mutual, hedge, private equity, and venture capital funds have about 4% of women in top management. So it’s pretty clear who has the power. Even if men and women would have been equal and would behave the same way, statistically the abuse towards women would still happen often. 

Another unpleasant news about women – most of them have kids. Okay, everyone has kids. But can you imagine one male investor during the conference coffee break asking another: "Oh, you seem to work a lot. Do you have kids?" and concluding his phrase after hearing your answer: "Well, that's what I thought. Everything will change when you'll have kids." I always wonder what exactly should change? Is it carved in stone: "Startup or kids – you can only choose one"? Actually, experience with kids helps a lot. During the first years, a mother chooses her kid over everything. Over her life. And that's what successful founders do as well. And then kids grow older. So do the startups.

So if you are a female founder and you pitch to the investors and don’t get the funding is it because your startup isn't good enough it or because you are not a part of the investor’s ideal picture?

“56% of investors believe that as long as you have a good product idea with a solid business plan and some traction, the tech sector provides the same opportunities for funding regardless of who the founders are.

They said that lack of funding for underrepresented founders really isn’t an issue.”

Of course, they say so. You can’t actually believe in something that you hardly ever experienced in your life, right?

However, the studies show us the opposite picture. "Investments in companies founded or co-founded by women averaged $935,000, which is less than half the average $2.1 million invested in companies founded by male entrepreneurs. Despite this disparity, startups founded and cofounded by women actually performed better over time, generating 10% more in cumulative revenue over a five-year period: $730,000 compared with $662,000."

Are we still talking about purely economical reasoning here?

I’m not here to blame, I'm here to ask a question. What if after reading this piece a guy from the VC hears another pitch from the female founders and instead of asking them questions will ask one himself. “Am I biased?”

Links to the studies: 1, 2, 3, 4, 5, 6.