As the calls for more women to be involved in technology development continue across the industry and into the wider community, this also carries the need for greater gender diversity in all areas of the technology ecosystem, including venture capital. Just two years ago, 65% of US Venture Capital firms still did not have any female partners. With the clear divide in diversity and representation, it’s time to take greater action to increase the number of women in American and Canadian VCs.
While a few reputable studies and reports show that there have been steps taken to add more female partners to investment firms, there is still much more work to be done. When it comes to female representation in North American venture capital, most VC firms are controlled by teams with all-male managing partners. In 2019, 13.2% and 15.2% of partners at American and Canadian venture firms were women, respectively. While this increase of more than a full percent from the year prior is a small celebration, there is much more work to be done to reach the balanced 50% mark in Canada and the US.
Laurie Dmytryshyn, the Chief of Equity Investment at PIC Investment Group Inc. mentions, “I was recently pitched by a US-based female entrepreneur. We got along well during the pitch, and at the end of the conversation, the founder shared that I was the first female that they had pitched. It’s a problem.”
Tracy Chadwell, a founding partner of 1843 Capital adds clarity to the issue: “I think that having more women VC investors will change the breadth and the type of companies that are being invested in today. There is a lot of capital piling into the same kinds of companies, however, women see interesting opportunities outside of traditional investments. The result is that future companies will be more diverse, and more problems will be solved that are outside of traditional issues.”
After listening and learning from female venture capitalists and technology CEOs from around North America, here are some of the recommendations for the industry as we move forward:
Men need to be stronger advocates for women in investment and tech: It’s our job—for investors like myself, angel investors, VC firms, and other key players in the investment space—to set the bar high and demand more encouragement and support for women in the VC field. Jesse Draper from Halogen Ventures said it best, “I have a lot of hope for the next generation of men—they are asking how to champion women because they are raised in this era. We need the partners of existing firms to open their doors for more women to be in leadership roles on their teams.”
More women need to know that venture capital is a viable career choice: As Wanda Hunchak, Executive Vice-President of Westcap Mgt Ltd shares, “I think it’s an issue that needs to be addressed at the educational level since many women might not consider venture capital as a potential career path. A lot of VCs have their CFA and financial degrees, so we need to do better in clarifying to women that this is a strong possibility for their careers.”
Traditional VC firms need to see the business advantages: “Our thesis is that women are the dominant consumers—they drive 85% of buying decisions across all areas of life. Women are also the power-user of nearly every platform on the internet. If consumers look like this, shouldn’t founders who look like the consumer have the business advantage?” muses Nisha Dua, General Partner of BBG Ventures.
Acknowledge that technology investments involving women see greater success: It’s a fact that diversity within firms leads to a broader range of networks and experience that allows them to build differentiated deal flow and make smarter investments. Alice Reimer, Founder of The51 shared that, “Women often don’t get invited to invest, so we are trying to change that narrative. There is a misconception that women are more risk-averse than men. It’s really about being more risk-aware and more thoughtful about the companies they invest in.”
Recognize that diversity is happening on either side of the table: VCs need to acknowledge that entrepreneurs are making decisions based on diversity on their end, too. “One thing that investors may not realize is that while they are critiquing our businesses, we are critiquing their firms and what they hold dear. I’m looking at your company as hard as you are looking at mine to see if you provide value, including race and gender representation. I may not even respond to your email because there is not one woman or person of color on your investment team. You could be missing out on my company that just 10x ARR because no one on your team looks like me,” adds Katherine Regnier, CEO at CoconutSoftware.com.
We need to publicly celebrate the success of women who have raised VC funds: “I think a solution is to start telling the stories of these founders. We can all celebrate the success and normalize women successfully raising funds,” shares Michelle McBane of Standup Ventures.
Exclusive boys’ clubs are a thing of the past, and rightfully so, considering the innovation and successful deals that have come from diverse firms. Changing today’s VC landscape is a win-win all around; everyone will benefit from recognizing the success of hardworking females and inviting their perspectives to make newer and smarter investments. As Alicia Soulier from Salon Scale concludes, “The only thing that women want is to be seen and heard as equal.” Being aware of the issue leads to change. It takes collective action to invest in more women in venture capital, so let’s make it happen.
