Dear Mitch, Reid, Brad, Josh, Hunter, Mark, Chris, and all other investors who want to help/change,
As you can guess, last week’s events have been really disappointing to us female founders. While I am grateful for all the women speaking out and who will continue to speak out, I am also worried about the potential backlash to our community. Even with everyone saying right things at the moment, a natural, conservative reaction for male VCs would be to enact some version of the “Mike Pence rule” — to avoid running into any potential problems by simply avoiding female founders altogether. And with VC funding to women already at dismal levels, this could be a disaster.
To state the obvious, the solution is more women investors. Specifically, more women-led funds. Some women VCs who have joined existing funds have told me that they worry that their investments in female founders are watched more carefully, and any missteps made by them appear magnified. This hyper-vigilance leads to increased cautiousness to invest in female founders by even the women investors. A way to address this is having more women investors who run their own funds.
But clearly, it’s not that simple. LPs generally only back new fund managers who have experience with previous large funds. With a shortage of women VCs right now, it will take years (decades?) before there are enough “spinoff” women-led funds. We need a more innovative solution to accelerate the process.
My proposal to you is this — create a version of Sequoia’s Scout Program for emerging women managers who are successful operators but don’t have specific large VC experience.
For years, Sequoia has been funneling capital to operators/founders to invest, on their behalf, in early stage companies. It’s a win-win-win for all involved — Sequoia gets more deal exposure, operators are able shift to investors without having to have their own capital, and founders get funding. This program brought many successful companies, such as Thumbtack and Uber, into Sequoia’s orbit and successfully created several new investors out of operators. However, the gender ratio of these new investors reflect the disparate gender breakdown in the VC world — there were only 5 women “scouts” and 73 men. [7/3 update: Sequoia reached out to tell me that this stat has improved to 25% female scouts since the article. “There’s much more to be done, but we’re making progress.”]
So for this new program, start by committing $ or allocating a certain percentage of your fund to back those of us operators/budding women investors frothing to fund and support female founders with great ideas and companies. There are so many of us (Tamra, Kara, Lizzie, Jennifer…) who have been putting our own limited personal capital into play to try to do our part, but we need access to more capital to make a real and lasting impact.
We see deals that you don’t, and we are able to identify reasons why a certain founder/deal would make a great investment in ways you may not. We can support our founders in ways that only women can do for other women, which will only increase your support for them. There is already evidence out there that female founders outperform their male counterparts. After a short amount of time, more female founders will be funded, more women investors will have track records to raise their own proper standalone funds, and globally, there will be enough data points to prove once and for all that “funding women in tech” can be a solid thesis on its own.
Empowered, resourced women can provide impact and returns in ways we have not yet imagined. Let’s unleash the power of women networking for other women.
I look forward to creating a great #womenbackingwomen ecosystem with you.
Saujin
