Event Recap: Women in VC With Nimi Katragadda of BoxGroup
Two Steps Forward, One Step…?
On International Women’s Day — Monday March 7th — we celebrated the progress that women have made throughout history. Behind the aesthetically-pleasing Instagram posts, however, lay an altogether less pleasing truth: The fact that in 2020, many leaps and bounds forward towards gender equality had instead turned into 2 steps backward as a result of the disproportionate consequences of Covid-19. With 2.3 million women leaving the labor force in 2020, bringing the women’s labor force participation rate to the lowest it has been since 1988, it has become clear that women, and particularly women of color, have disproportionately suffered from the economic downturn.
This was equally reflected in the Venture Capital industry, where global venture funding to female-founded companies fell significantly in 2020, from an already low 2.8% to 2.3%. Even worse, Black female founders only received 0.64%. In light of these economic setbacks, NYU Stern’s Private Equity & Venture Capital club in partnership with the Entrepreneurship and Start-Up Association were particularly excited to host Nimi Katraggada, a partner at BoxGroup (and one of the only 4.9% of VC partners that are women), for a fireside chat to speak about the future of women in VC.
Reframing Stereotypical Female Traits and Skills
In the business world, women are forced to contend with harmful gender stereotypes that paint female personality traits and leadership styles as less effective, and ultimately limit female progress in the workplace. Our inspiring conversation with Nimi focused instead on reframing these traits and skills as not only productive, but necessary, for VC’s in the board room and founders launching new businesses.
Nimi argues that, in fact, “women have incredibly powerful qualities to contribute in the boardroom. Many qualities that we’re often told don’t translate well to being a CEO or an investor, are actually those that set women apart.” Qualities that have historically been categorized as weaknesses, such as empathy and emotion, speaking less or at lower volumes, or even giving birth, are all unique skills and advantages for being powerful investors, founders, CEOs and beyond, Nimi believes.
Product — Market — *Female* — Founder — Fit
The four most important words in both the VC and start-up worlds are “product-market-founder-fit” — and it is from this concept that both female investors and founders draw their greatest strength. In order to achieve excellent fit, a founder must be able to uniquely identify, and understand, an under-served consumer or need. An investor, in turn, must recognize when a founder has created a product with fit. In this regard, women have a unique superpower.
First and foremost, women influence 85% of consumer decisions. Therefore, Nimi contends, “women creating products for women like them are in a unique position to create incredible products.” Careful not to stereotype all women, Nimi also points to the idea that women “often have a sort of empathy that allows us to understand, and engage with, our consumer in a unique way”, and thereby launch businesses that directly address underserved audiences. She pointed to two female-founded companies in the BoxGroup portfolio: Maven, founded by Katherine Ryder, and Mirror, founded by Brynn Putnam, as excellent examples of female founders who have done just that.
Finally, female founders contribute to successful teams and businesses by setting equitable company cultures from the start. From experience, Nimi knows that the first few hires are incredibly important when building a company, and female founders are more likely to hire other women, which then creates a more sustainable culture as the business grows.
The Ultimate Butterfly Effect
However, this trickle-down effect is not only true of female founders. In fact, while a focus on female founders is a meaningful first step, it is even more important to look upstream to female investors. According to this recent All Raise report, female investors are twice as likely to invest in a startup with one female founder, and three times as likely to invest in a female CEO. It is proof of a truth that Nimi knows well, which is that change is top-down in an industry like VC, and the work towards gender equality must absolutely include female investors.
Much like female CEOs, female investors bring many strengths. Nimi believes that there are many different styles of investors. There are the investors that dominate the board room and ask the hard questions, while there are those who listen more than they speak and add lifetime value later on, for example. “What is key is developing your style as an investor, and determining what your ‘superpower’ is, then bringing that to the table and letting it speak volumes for you.” In addition, female investors are more likely to understand female-founded companies and products, and identify the need for them that might be in the market. This leads to female investors being more lily to support female founders, CEOs and beyond. It is this ripple effect that makes is vital for female investors to be in the room, which often requires two key components: spontaneity, and support from male counterparts.
Nimi contends that much of the loss we saw last year with regards to investment in female founders, occurred as a result of the lack of meet-cute spontaneity that Covid did away with. These spontaneous meetings often allowed women to get in the room, and without it, we suffered. To combat this, Nimi advises “surrounding yourself with other founders. Create ecosystems of founders so that when one gets funding, they can provide a warm introduction to their investors and get you in the door.” For better or worse, warm introduction are key in the venture industry.
Male Allies and The Burden of Change
In the same vein, this speaks to the way that men can be allies. “Still today, 95% of partners in VC are men, so the burden of change ultimately falls on them to hire female investors, bring female investors into deals, mentor young women, and more.” Once we have the female investors in the room is when the ripple effects really begin to strengthen.
Once female investors have made it into the room, however, many suffer from imposter syndrome. We asked Nimi for her take, and in her opinion, “part of the reason we deal with imposter syndrome is because returns are so extended in venture capital, so it takes a long time to see if we’re succeeding and seeing results.” Her advice to combat those feelings is to “focus on the small wins and on our superpowers to celebrate the small things every day and remind ourselves that we are where we are supposed to be.”
Our discussion with Nimi could really be summarized with the age old adage that a rising tide lifts all boats. When one women succeeds, we all do. With Nimi’s advice, we can move forward as investors and founders and begin rising that tide.
