Statistics show, teams with female founders tend to perform better.
As part of my series about “the five things we need to do to close the VC gender gap” I had the pleasure of interviewing Mathias Ruch. As a serial entrepreneur and investor Mathias Ruch has been involved in the digital startup scene for 20 years. Founder and CEO at CV VC (previously Lakeside Partners), a next generation investment company, where cutting-edge blockchain technology meets traditional venture capital. Co-Initiator of CV Competition, Europe’s largest Blockchain startup contest and Co-Founder of CV Labs, a co-working space and Blockchain incubator. Before turning his focus to blockchain, he built and exited several successful online and media companies such as FaroTV and Europe’s crowdsourcing pioneer Atizo. Mathias has co-founded the Swiss Blockchain Taskforce. He is a driving force behind the development of the global blockchain startup ecosystem.
Thank you so much for joining us! Can you tell us the “backstory” that brought you to this career path?
I have been an entrepreneur and investor in the digital startup scene for 20 years. In the first ten years I founded over 10 companies myself, including complete failures and successful exits, which led me to Angel Investments in the last ten years. When I started to expand my activities with two new partners, something called Crypto Valley happened in front of our doors. Two years later CV VC (Crypto Valley Venture Capital) was born, a dedicated blockchain VC and ecosystem builder.
Can you share a story of your most successful Angel or VC investment? In your opinion, what was its main lesson?
By definition, early stage investment are successful if you can multiply your invested funds. The earlier you invest, the lower the valuation of the company (and the higher the risk). The evaluation of the product, the market and the team in these early phases is the real challenge as there is little market traction to see. The main lesson: work with the team, get to know to founders very well and see if they have what it takes to pivot and make difficult decisions.
Can you share a story of an Angel or VC funding “failure” of yours? Is there a lesson or take away that you took out of that that our readers can learn from?
In retrospect, there was an Angel investment that was too strongly driven by passion. As a result, important market conditions were misjudged and the venture had to be discontinued. The lesson learned: Find the right people, diverse your skillset, be open to input from outside your network. Secondly, it is very important that you test your idea from the beginning, even if you think that your product is far from ready for the market.
Was there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that?
Crypto Valley was right in the middle of the so called ICO craze in 2017, when hundreds of millions where invested to buy tokens of blockchain projects in exchange for crypto currencies. We got to see most of these projects, but decided not to invest. Instead, we started to build our own ecosystem with a co-working space, events and conferences, startup competitions, an advisory and an incubator. Some of these projects we’ve passed on are today Unicorns and very successful and we maintain partnerships with them as they are important key players in the development of a global blockchain startup ecosystem. The lesson learned? Know your mission.
Ok let’s jump to the main focus of our interview. According to this article in Fortune, only 2.2% of VC dollars went to women in 2018. Can you share with our readers what your firm is doing to help close the VC gender gap?
Statistics show, teams with female founders tend to perform better. “A 2018 McKinsey & Company report found that companies in the top quartile for gender diversity on their executive teams were 21% more likely to experience above-average profits.” Therefore it is in our own interest to improve the status quo of the industry.
The first step is to realize the problem and setup a plan on how to improve. Among the 500 startups who applied for our first CV Labs Blockchain Incubation Program, the number of female founders was below 2%. None the less, in the final selection of the best 12 startups, 2 companies had female founders, that’s around 16%. To increase this number, we will give out “fast-track” to female founders for our next incubation batch.
Our Incubation Startups get coaching and mentorship from +80 mentors and experts, with a ratio of 40% female business leaders, entrepreneurs, subject matter experts as well as coaches. The goal is to get a 50% ratio. One of the workshops in our program is focused on the topic of diversity in teams, the gender bias and how to overcome it.
At our meetups and our yearly Blockchain Industry Event, the CV Summit, it’s not always easy to life up to the standard. From a pool of 250 business leaders, that you wanna have on stage, sometimes only 5% are female — it’s challenging to find the right fit.
Can you recommend 5 things that need to be done on a broader societal level to close the VC gender gap. Please share a story or example for each.
First, parents need to encourage their daughter and raise them equally to the opposite gender.
Second, educational facilities need to educate their pupils about the gender gap and how to overcome it.
Third, companies should change how they approach new employees, like creating job adds appealing to women or putting more females in managing position. There are not enough females in decision-making roles.
Examples of male coded vs female coded words in job ads:
- exhaustive = transparent
- aggressive = dedicated
- leadership = mentoring, coaching
Fourth, creating a working environment and culture which suits both genders needs. Implement bi-annual anonymous feedback form to understand if employees both male and female are happy, tackling topics such as management, chain of command, organization and company culture.
Last but not least, payments should be equal to work done, eliminating the salary gap. Same if one has an employee reward program.
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. :-)
Luckily, we are already acting in the middle of a movement: it is called blockchain and it is reflected in our claim: “We invest in Blockchain. Because it is more than Technology.” I was recently speaking at two blockchain events in South Africa with two very different audiences.
What is the common denominator of the two different crowds: the financial experts that know blockchain because of its disruptive potential in their industry and the creative community that is eager to explore new possibilities? I think it is the power of decentralization. People instinctively understand that blockchain is much more than technology. They feel that the use of this technology is beginning to change systems, challenge roles and redistribute power.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“I not only use all the brains that I have, but all that I can borrow.” (Woodrow Wilson). As an Angel Investor I was involved in a crowdsourcing/open innovation startup where I learned about the power of “wisdom of crowds” and how to use it in a business model. It is a common mindset in the open source world and also very popular in the blockchain space. For me and for everyone at CV VC it means that we think in ecosystems and that if we combine the brains and the network of all stakeholders in it, the ecosystem will benefit as a whole.
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. :-)
I would like to invite Bill and Melinda Gates to the Crypto Valley in Switzerland, to discuss how blockchain and other disruptive technologies can impact a nation, its economy and society — all over the world.
This was really meaningful! Thank you so much for your time.