Recognizing the industries posed for disruption: Since more than 70 percent of purchases are driven by women, having female representation within CPG company leadership can be a significant advantage. Some high-potential female-centric product sub-categories (such as feminine care) have remained relatively underfunded and underdeveloped simply because male entrepreneurs and investors haven’t naturally been inclined to focus on them, creating the white space for innovative feminine care brands like Cora to thrive.
I had the pleasure of interviewing Megan Bent. Megan Bent is the Founder and Managing Partner at Harbinger Ventures. A lifelong investor and entrepreneur with deep expertise in consumer brands, Megan has spent the past decade working to identify and scale high-growth, early-stage companies in the consumer sector. In launching Harbinger in 2016, Megan began leveraging a model that emphasizes female leadership and fosters close collaboration among entrepreneurs and investors to accelerate value creation. Prior to founding Harbinger in 2016, Megan served as Managing Director of Revelry Brands.
Thank you so much for joining us, let’s jump right in. According to this article in Fortune, only 2.2% of VC dollars went to women in 2018. Can you share with our readers what you or your firm is doing to help close the VC gender gap?
I spent 10 years investing in consumer brands before founding Harbinger Ventures, and one thing I noticed was that without gender diverse leadership, you often missed out on the opportunity for authentic innovation and disruption. At Harbinger Ventures, we solely invest in consumer companies with female or mixed-gender founders that are positioned to deliver upper-quartile returns.
Historically, the structure of investing has been “for men by men,” and has been primarily about giving capital rather than supporting entrepreneurs. In this environment, many talented female entrepreneurs have opted out. That’s really a missed opportunity, because women-led and gender-diverse companies perform at least as well as male-led companies, and are particularly well suited to identify and address unmet needs in the consumer space.
Every element of Harbinger’s strategy is designed to help foster a diverse community in which its entrepreneurs can grow, succeed and breed natural synergies among companies. Harbinger’s approach helps excellent female entrepreneurs gain the market share they deserve while also directly creating value for investors. For investors, Harbinger’s model for investing in women is not a compromise or a tradeoff — it’s simply smart investing.
Can you recommend 5 things that need to be done on a broader societal level to close the VC gender gap, and explain?
On a micro-level, there is grassroots progress being made — but on a macro-level, progress is still stagnant. Forty percent of new entrepreneurs in the U.S. are now women, yet female founders receive only about 2% of venture capital.
From a capital-raising perspective, gender diversity is becoming increasingly top-of-mind, and given the success of the grassroots progress, we are well positioned to increase the percent of funding for female founders — but there is still work to be done, including:
1. Understanding the power of diversity: Women-led and gender diverse companies perform at least as well as male-led companies. Neither men nor women are necessarily better at innovating, but more diverse teams will inherently identify more diverse opportunities for disruption.
2. Recognizing the industries posed for disruption: Since more than 70 percent of purchases are driven by women, having female representation within CPG company leadership can be a significant advantage. Some high-potential female-centric product sub-categories (such as feminine care) have remained relatively underfunded and underdeveloped simply because male entrepreneurs and investors haven’t naturally been inclined to focus on them, creating the white space for innovative feminine care brands like Cora to thrive.
3. Continuing micro-funded acceleration: A database of VC firms for female founders recently published by Inc. represents almost $1 billion in capital across 55 firms, which is huge progress — and shows that firms are building a foundation of different strategies, indicating more effort and participation.
4. Rewarding investments: The broader investment community still undervalues women-founded companies, and that presents a unique opportunity to forward-thinking investors — investors who are willing to put capital toward closing the VC gender gap will have an opportunity to work with highly valuable companies in a less competitive environment, allowing for attractive return potential.
5. Increasing accountability and enforcement: The startup community needs to purposefully and proactively work to remove addressable forms of bias, and hold people accountable for doing so. For example, both startups and VCs should increase transparency when it comes to releasing diversity metrics and/or pay practices, as well as include “Candor Clauses” in funding documents.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
I think that climate change is one of the most urgent issues of our time, and will almost certainly impact the lives of our children in ways we have not even begun to fathom. However, climate change will also disproportionally impact certain demographic groups, such as women, furthering already alarming income inequality.
I would love to craft a movement that inspires people to break through the cognitive dissonance that characterizes this issue, encouraging members of society to prioritize the long-term health of the planet over short-term convenience. We need to inspire immediate and significant action to change the way we live today and overcome the “bystander syndrome” that is preventing so many people from changing their lifestyles to benefit the planet.
Who’s a female entrepreneur/ VC you respect and why?
Heidi Zak, Co-Founder and Co-CEO of ThirdLove, is someone who I respect tremendously. Not only has Heidi been successful in a male-dominated industry, she has also redefined a consumer category that has been, at best, singular and dated — and at worst, offensive — for decades.
She has found her voice in the intimate wear industry, and has the courage to use it to differentiate from her competitors and make the industry a more accepting place. Her business and leadership styles are illustrative of the exceptional values that I admire and work towards — ambition, inclusivity, empowerment, transparency and conviction.
What do you think is the purpose and real impact of VC funds who focalize their work in women and minorities?
Given the scale of today’s venture capital funds, the realistic purpose and impact of VC is about setting a precedent and building groundswell. While there are more dollars being allocated and deployed specifically for women- and minority-founded companies, these deals are still too small to make a significant impact in closing the funding gap.
However, we are making progress on increasing the percentage of deals that are going towards women- and minority-founded startups. Even more exciting are the successful outcomes we are seeing from these deals. If VCs are willing to talk about the role that gender and diversity plays in successful investment outcomes, we will accelerate change from:
1. Keeping the discussion top of mind for a broad audience, from entrepreneurs to investors to the media.
2. Supporting a new generation of role models, success stories and case studies that can help change biases.
3. Increasing the population of self-made, high-net-worth women that have an appetite to invest, since female investors are more likely to fund other women.
Can you share with us an anecdote about the real impact you’ve had in this field?
I founded Harbinger Ventures to create a model for a more diverse entrepreneurial base. I didn’t want Harbinger to only be about funding women — creating scalability and true impact is going to require buy in from men, so I wanted to focus on the benefits of gender diversity and have the male perspective at the table as we try to rebuild venture capital to be more inclusive. As a result, I brought in a male partner, Seth Beers, and raised money from both men and women to build a balanced investment community.
Beyond just working with diverse teams, we used data, experience and intuition to reinvent parts of the VC model that under-utilized some of the best attributes of female leadership and capabilities, such as collaboration and resourcefulness. My hope is that the Harbinger model can be used a prototype for how VC can and should evolve to be better positioned to support an increasingly diverse Founder base.
Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might see this, especially if we tag them. :-)
My number one choice would be Ruth Bader Ginsburg. The “Notorious RBG” is arguably one of — if not the most — influential women in the world. She has spent her career as an advocate and defender of women’s rights, while also upholding critical democratic pillars. Her life’s work, fiery style and leadership have allowed her to become an iconic inspiration across many generations.
Thank you for all of these great insights!
About The Author:
Tyler Gallagher is the CEO and Founder of Regal Assets, a “Bitcoin IRA” company. Regal Assets is an international alternative assets firm with offices in the United States, Canada, London and Dubai focused on helping private and institutional wealth procure alternative assets for their investment portfolios. Regal Assets is an Inc. 500 company and has been featured in many publications such as Forbes, Bloomberg, Market Watch and Reuters. With offices in multiple countries, Regal Assets is uniquely positioned as an international leader in the alternative assets industry and was awarded the first ever crypto-commodities license by the DMCC in late 2017. Regal Assets is currently the only firm in the world that holds a license to legally buy and sell cryptos within the Middle East and works closely with the DMCC to help evolve and grow the understanding and application of blockchain technology. In addition to his role with Regal Assets, Tyler is a regular contributor to Forbes, Arianna Huffington’s Thrive Global and Authority Magazine. Tyler has also been featured in many news publications and has been a guest expert on “The News with Ed Shultz”. Tyler is a proud member of the Forbes Finance Council a private invite only-group of hand-selected industry leaders.