Why aren’t more women getting funded in India — the problem at the moment is literally “all of us”.

This is an article I originally wrote for the Economic Times on March 6, 2016. I’m publishing a longer version of it here since it’s Women’s Day today. I’ve also made a few tweaks to the article now that I had a little more time.

I did two small surveys over the last couple of days — since I was asked to write this article. First, I called a few women entrepreneurs I know and asked them how they felt about the investment community in India. Did they feel they were being judged? Did investors ask inappropriate questions with regard to their sex? I tried to make sure I wasn’t asking leading questions, but honestly, it didn’t matter. Stories poured in. They told me about being asked about work/life balance, getting pregnant, and even how their husband felt about them starting a company. “How much time will you take off if you get pregnant”, one investor had asked. “Are you interested in staying with this company long term or is it a hobby”, asked another investor. “Are you planning on getting married”, asked a third. I’m embarrassed to say I was slightly taken aback. I didn’t see it coming.

At Lightbox, we pride ourselves on looking for the best entrepreneur, nothing more. As I’m sure many other funds do as well. And I’m proud to say that 40% of the start ups in our latest fund have been founded by women and the one pure angel deal the partnership did prior to raising our fund was co-founded by a woman. But this wasn’t by design. I believe we looked for the best opportunities and invested in them. I can’t imagine any of the people I know personally in the industry being any different in evaluating deals than us.

But based on the results of my first survey, I started doing some research on how skewed the market is in India. Unfortunately, Indian data is weak. So I started doing some digging into the American eco-system. CB insights recently released a study which said that only 8% of funded startups in America were founded by women. Over 80% were founded by white men. Babson College’s Diana Report found that 97% of VC backed companies had male CEOs. And that businesses with all-male teams were more than four times as likely to receive VC funding compared to teams with at least one woman. FOUR TIMES more likely! That’s insane!

This only changes when there’s a woman at a partnership level in a fund. The Diana Report also said that 58% of venture capital firm with a female partner, had invested in companies with women as CEOs, as opposed to 15% of firms without women partners.

So, as I see it, here are the two big hurdles women face, in the US, when trying to raise money.

First, there aren’t enough women in venture capital. In fact, as soon as you start looking at the makeup of the VC community in the US, it’s pretty stark. I found three points especially alarming in the Diana Report. First, “the number of women partners in VC firms decreased from 10% in 1999 to 6% in 2014”. Second, “more than 75% of VC firms in the US did not have any female venture capitalists at the time they were surveyed”. And third, “more than 75% of VC firms had never had a woman represent them on the board of one of their portfolio companies”.

Second, men in venture capital don’t seem to appreciate the ability of women to run companies. One example of why this is from an article about Michael Moritz. Mr. Moritz had responded to a question on why there was a lack of women represented in leadership positions in Sequoia sometime late last year. Jessica Nordell wrote a brilliant piece on his response which addresses the larger inherent problem. In it she argues, “The problem is that the idea that women are not as good is so deeply embedded in the mind of so many people in positions of power, that it is not even recognized. It’s a belief system that leads one to automatically and without awareness, connect ‘women’ with ‘lower standards’ and ‘woman as good as a man’ with ‘the exception’.” What’s key for me in Jessica’s quote is that she’s talking about all people in power, not just men.

As a result, we have the following situation in the US: VC community is mostly men. Funded startups are mostly founded by men.

Let’s bring this back to India. This concentrated makeup for the VC community, at a high level, looks quite similar to the current venture eco-system in India. First I looked internally. Unfortunately, I knew that all three points hold true for Lightbox. Although, we’ve made investments in women entrepreneurs, we have no women in the partnership nor any female representation from our side on our Boards. Although, 50% of the people that work at Lightbox are women and everyone contributes when we consider an investment, no woman is involved in the final decision.

I also looked externally. I chose six large home grown funds in india, and 3 large strategics/hedge funds that I know have invested heavily in India and I started adding men and women. Let me stop here for a moment. This wasn’t done scientifically. I literally went to websites, clicked on teams and started counting. But, even so, what I found wasn’t pretty. I’m not going to publish the numbers because I could be wrong. But, from my very narrow focus, Indian venture makes US venture look amazingly diverse!

The US scored better on the first two counts from the Diana Report. I wasn’t able to get Board composition for many of the portfolio companies but I’m assuming most of them are represented by the funds employees themselves anyway. And so by all counts, things are even more skewed in India than the US.

And that’s really scary because America is in bad shape! There are horror stories ranging from the SMS conversation of Sarah Nadav (where a VC told her that “mothers have more important things to do”) to the pregnant journey of Nathalie Miller (where she was told to hide the fact that she was pregnant and dress a certain when meeting investors) . And it gets worse. “The Elephant in the Valley”, was a survey of women that had worked in Silicon Valley for at least 10 years. A quarter of them held C-level jobs at the time of the survey. 60% of these women said they’d received unwanted sexual advances; 65% said those advances came from a superior, and one of three women said they were in fear of their personal safety.

If women founders in India are not getting a fair chance, we don’t have to look any further than this mindset. Too many men, not diversified enough culturally, probably thinking in a similar manner to what Ms. Nordell was referring to, without even realizing it.

This brings me to my second survey. I called a few investors (completely randomly other than the fact that I knew all of them). I told them I’m writing this article (full disclosure) and asked them why more women are not funded in India. One common answer was that they get very few deals from women. Sarah Nadav’s response to that in her article — “If there aren’t any women pitching you, it’s not a pipeline problem. The problem is literally you”.