My Portfolio Company CEO Had a Baby (OMG)
My portfolio company CEO had a baby.
(Other VC: “Damn. So sorry for you, bro.”)
She’s been out for weeks on maternity leave. Not sleeping so well. Really focused on herself and that little guy.
(“Stop it, man. You’re making me sad. I feel awful for you. But didn’t you guys have a conversation about that before you invested? Did you know she planned to have more kids, and so quickly?”)
There’s been a lot of talk about women in tech, and I think it’s terrible.
(“Yeah, me too. I think it’s terrible too. How are they supposed to balance families and startups…”)
No, I mean it’s terrible that we even have to talk about it. I think there should be many more women leading startups while having babies and raising families. And we should fund them. I’ve already funded a few.
(“Hey…. um, great to see you again… I just remembered I gotta jump on a call or post a Snapstorm or something…”)
Yes, Adi, the CEO of one of my portfolio companies had a baby — not the first CEO in the portfolio to do so. And no, I don’t believe the above (fictitious) conversation reflects the open biases of most male investors. But I do think we need to adjust the conversation about female founders a bit.
The Self-Selection Argument
I’ve heard the arguments for “self-selection” many times. “I’d love to invest in more women founders but I just don’t see many of them.” That’s an issue — my dealflow is consistently around 10% female / 90% male (making it more remarkable perhaps that my portfolio is 30% female-led). But a) data suggests that a lower percentage of women seeking VC funding get funding relative to men, and b) the deeper issue is that perhaps many potential female founders are self-selecting out in advance, because they are not stupid and know or have heard that their chances are slim — creating a self-perpetuating cycle, because…..
Most Investors Would Be Horrified If You Called Them Sexist, But They Are
I believe many investors have at least subconscious concerns when evaluating female-led startups that they don’t have when it comes to startups led by men. It’s a double-standard mindset that I think forms the undercurrent of subconscious biases among investors who are otherwise extremely liberal and would be horrified and indignant if anyone suggested that they were in any way sexist. The same way that large companies do “gender-equality” audits and are stunned to find wage discrepancies between men and women for similar jobs within their organizations. Yet in one study 65% of females seeking VC funding reported perceived bias during the fundraising process. If we tell ourselves enough times that we are liberal and not sexist, and even generally act accordingly, it allows us to gloss over the cases where we deviate. Again, these deviations may be conscious or subconscious, and I think one of those areas of deviation is startup investment.
I’m not ranting about overt sexism like Sarah Nadav’s horrifying experience with an unnamed VC or when one of my own female founders was asked by multiple investors (male and female, I should point out) if she planned to have more children while running the startup — those extreme examples of bias are beyond the pale. I’m focused instead on the indisputable result, intentional or unintentional, that female founders are under-represented in startup leadership, however it happens.
Women Win
Speaking of results, thanks to our awesome friends at First Round Capital we now have data that supports a thesis that female founders are actually great for The Only Thing That Matters in VC — returning gobs and gobs of money to our LPs.
So yeah, while it may be hard for us male VCs to get our arms around a pregnant CEO (couldn’t resist, sorry), we have to make a concerted effort to: a) treat female founders fairly (duh), b) seek out and encourage more females to make the jump into startups (thereby cancelling out any self-selection bias) and perhaps most importantly c) dig deep into our subconsciouses to make sure we’re not being influenced by any subliminal biases.
At Jumpspeed Ventures I’m putting my (LPs’) money where my mouth is. Of ten Jumpspeed portfolio companies to date three (so far) have been female-led. I wouldn’t be shocked if we hire a women to run another one of these ten, one of our young “venture-built” startups that doesn’t yet have a CEO, which would get us to 40%. None of these startups’ products are women-focused. I’m not hiring or backing these female CEOs because I’m a feminist or an idealist, or because I want to right wrongs (though all may be true), but rather because I want to return a lot of money to my LPs and I think these amazing, driven, talented women have been and are perfectly positioned to get their businesses to their hoped-for financial results. Yes, Adi had a baby but the funny thing about babies is that you usually have plenty of advance notice; her team was perfectly prepared and has been rocketing forward in this brief period while little Dror is rocking on her lap.
Maybe I’m further biased because I’m a father of a bunch of crazy, amazing kids who are my pride and joy, and because I’m married to an amazing superwoman. And I’m in no way blind to the combined challenges of juggling childbirth, child-raising and running a startup. I’ve just seen many more men crater startups doing stupid s%&t that no investor noticed, asked or cared about, than women mess up companies because they had a child or children to worry about.
What I’d Love to See
I’d love to see more of the ink spilled about women in tech, focused on the positives rather than the negatives— more material like Deborah Jackson’s numerous articles on female entrepreneurship — see this one for example, excerpt below:
The female brain is at work with both women CEOs in big business and also CEO/founders of new companies. Research has shown that the “hardware and software” of the female brain gives women the ability to fast forward each scenario and envision likely outcomes. The female brain allows women to process information in a unique way–by connecting the dots and understanding human emotions at the same time. It is a talent that women use in running their families and raising children. The functioning of the female brain is of the highest order and is truly a gift.
Or more accounts of how having babies actually makes for more successful, well-rounded CEOs. Nothing teaches someone to multitask and triage better than giving birth to and caring for a baby. Here’s a great anecdotal account of how becoming a parent helped an entrepreneur catapult her business to growth; I’d love to see many more of these stories told. (Heck, having a baby can even make the dad a better entrepreneur according to this guy’s account.)
Conclusion
There are so many arguments to be made on both the “nature” and “nurture” sides in support of women and mothers being at least equally if not better-suited for the roller-coaster ride of startup leadership. Fuse these arguments with First Round’s data above and IMHO you have a very compelling case for actively seeking out and backing female-led startups, and recruiting females to lead startups.
And for being super-excited — not super-stressed — when they have babies.
The babies will come with the scenery. And personally, I like the scenery.
[End of Rant.]
