At my one-year business school reunion in May, I pitched at the startup showcase. Of the 20 pitches, 3 were women founders. This is not a new situation. At entrepreneur events, I’m frequently one of a handful of women. Our first incubator was 85% male (I counted one day while on a Red Bull break). Again and again, these numbers make me think: where are all the women?
A recent piece cited the number of technology companies founded by women at 3%. This is despite the fact that women-led private technology companies get 35% higher return on investment, that the venture-backed ones have 12% higher revenue, and that women-owned companies with 10M in revenue have 47% higher growth than the average 10M in revenue company. Sadly, however, 98% of women-owned companies never make it over 1M in annual revenue.
I asked other (male and female, seasoned and new) entrepreneurs for potential explanations. Here’s the three general buckets of potential explanations. Differences in women’s abilities and / or natural inclinations.
Entrepreneurship interferes, even more than the average career, with work-life balance. “Dismissive attitudes” towards women.
Women’s natural abilities: People often say women are less risk-taking or confident in themselves. I’m not sure if this is true. However, one thing is clear: many attributes of successful entrepreneurs are not considered feminine. A recent Inc. article on leadership found that decisiveness, confidence and resilience are the most desirable qualities in a leader. Yet they are all viewed as male traits. The same article says that stereotypically female traits – empathy, vulnerability, inclusiveness, generosity, balance, humility and patience – are what make great leaders today. Yet having just gone through the fundraising process, I can tell you that humility and vulnerability aren’t going to help you raise venture money. Watching VCs interact (no offense guys, and it is mostly guys) is sometimes like watching a caricature of the alpha male world.
Work-life balance: I was asked to speak at the Forte Foundation Women Leadership Conference on a panel on entrepreneurship. One topic I was asked to cover was balancing career and family. It so happened that on the morning of the panel, I had Ele, my daughter, and no babysitter so I took her with me. I felt self-conscious as we walked into the Sky Lobby of the Goldman Sachs building, the only mother-daughter pair there. However, both on the day of the event and afterwards, the responses were overwhelmingly positive. A Tuck student wrote: “Towards the end of the panel, Frida’s young daughter got antsy in the audience and came to join her at the front of the room. I was impressed with how Frida naturally and comfortably continued the conversation and was not at all distracted by her daughter’s presence”. Uh.. that would be more like Frida pretended not to be distracted as she continued to answer questions…
Dismissive attitudes, namely sexism, still exists. An admired advisor of mine told me once that as an attractive woman, it would be easy to get investor meetings. No doubt he meant it only to be helpful and I didn't take it badly but, it was, sexist. And this is a man who spent hours on the phone with me discussing funding and term sheet terms and strategies while on his vacation; he is truly dedicated to helping me and other entrepreneurs. I just don't think he even registered his comment as sexist because, in his generation, it probably wasn't. In a lecture to a group of business students, a well-known entrepreneurial figure said that women can only get funded if they marry successful (male) entrepreneurs. Patently false and intended to provoke but nonetheless, to be publicly stated in 2012 was shocking.
An Inc article written last week exhorts women to dream up big companies: “Women either do not like or not feel comfortable spinning a big vision”. Hmmm. Our company’s vision – to reinvent human capital assessment and analytics using neuroscience – is pretty darn big. But the response we frequently got was “awww… what a cute idea by those two science girls”. A business school competition judge told us we were a “social project” despite being the only company in the room with 6 figure revenue from top tier clients. Potential investors told us we were a consulting firm with no product despite offering no consulting services and having the product available for anyone to use on our site. Did we get these reactions because we were women? Did we get these reactions because other women before us failed to dream up big companies, or because people can be condescending towards women even when they do have big ideas? I would argue the latter.
In any event, this episode ends well. Julie and I just signed a term sheet with a top VC firm that got the big idea. We are super psyched! We are now one step closer to becoming part of the 3%. All I would say to any person, male or female, reading this article is that launching a company / fundraising is exhausting, and whatever sex your are, naysayers will far outnumber your backers. As a somewhat overly-emotional female, I was lucky that Julie let me cry in front of her routinely (after the umpteenth round of rejection) and that for me, crying is usually followed by renewed determination. That, and running is very therapeutic!