Women Entrepreneurs Take The Stage

It’s already well known that adding a few “moonshot” investments to your portfolio can go a long way in the long run. But did you know that the principle of diversification goes well beyond which assets or industries you invest in? You are probably undervaluing one key measure of diversification: gender.

The sobering reality is that less than 3% of VC dollars went to women-led startups in 2017, and only 0.2% went to women of color. That’s unfortunate not only for the brilliance that goes unfunded, but also for the investors missing out on hidden returns. With all the negativity that came with 2017, one trend that got lost in the fray is the rise of women entrepreneurs in tech.

Here’s what just happened this week:

NewTV is the brainchild of a former DreamWorks Animation co-founder, Meg Whitman, and the venture is aimed to bring professional quality 2–10 minute videos to mobile platforms. Think bite-sized TV shows with Hollywood budgets designed for Snapchat and Instagram. This seasoned Silicon Valley vet led eBay from 30 employees to 15,000 and was Uber’s first choice for CEO before she turned them down. She then resigned as head honcho of Hewlett Packard in order to lead a company with little more than a business plan. To be fair, they have some cool things going for them. Plus, they’re locking up a couple billion to fund the cause.

Front, led by Mathilde Collin raised $66 million in five days. What’s even cooler than that? This quote: “I decided that I wanted to raise money, I scheduled 11 partner meetings over a single week. At the end of the week, I had term sheets from all investors but one.” Front is taking Microsoft Outlook head on by being the cool version of corporate email. The company already has 2,500 corporate clients, 60 employees, two Paris offices, and runway for nine years.

Melinda Gates led a $181 million backing of Aspect Ventures, a women-founded VC fund. Aspect is 50/50 male-female in both employees and companies funded, while the rest of the industry is more like 90/10. Aspect’s eye for investing in companies founded by women and POC is turning out to be a competitive advantage. The fund’s exit performance has been top notch, and it is starting to attract serious investor money in a world increasingly valuing diversity with dollars. As Gates puts it, “The venture and startup ecosystem is still a boys’ club — one that all too often excludes, disadvantages, and mistreats talented women who want to contribute to it. The data tells us that’s harmful to society and bad for business.” You should diversify your investments by gender because it’s smart. As the Harvard Business Review shows, female-led firms have higher rates of return on average than male-led firms. As First Round Capital corroborates, their female-founded portfolio companies have outperformed their male counterparts by 63%.

Investing in women-led firms has proven time and again to reap substantial rewards. However, women still face an uphill battle. There are still barriers for women in accessing capital in the male-dominated VC world. Knowing what we know about diversification, it’s up to us to make a difference in that trend and our portfolios.

Some other reads about cool women doing cool things:

• “When women want change, they get it.” These 10 women of VC are reshaping the industry. “I think we’re going to see a completely new way of VC and funding entrepreneurs in the next two years.” We agree.
• Kaya Thomas casually getting praise from Michelle Obama. This decorated Silicon Valley up and comer is doing right and doing well.
• Katrina Lake was the only woman to lead a tech IPO in 2017 with her company, Stitch Fix. Her story there was one of persistence.

Disclaimer: This article does not intend to provide investment advice. The companies mentioned are not currently or planning to raise funds via Slice Capital’s funding portal. Slice Capital does not view the companies mentioned as direct competitors to any of the issuers currently raising on Slice’s funding portal.