The Pipeline Problem
“I think the issue begins in our high schools, and where women, particularly in America and also in Europe, tend to elect not to study the sciences when they’re 11 or 12. So suddenly the hiring pool is much smaller. In fact, we just hired a young woman from Stanford who is every bit as good as her peers. And if there are more like her, we’ll hire them. What we’re not prepared to do is to lower our standards.” — Michael Moritz
This is a very odd statement coming from the Sequoia Capital Chairman who studied history. Clearly, that requirement isn’t met by all male VCs either, so why is that a determining factor for females? Saying you’re not ready to “lower your standards” by hiring women insinuates there are not enough women who want these roles and also not enough qualified women to take them. Both of which are not true. They’re out there. Perhaps you just never bothered to look.
A lot of venture capital investors like to call the lack of women getting venture capital jobs the “pipeline problem.” They frame it like there’s nothing they can do! These investors don’t have a problem with women there are just fewer women applying to these jobs and even fewer of them who are qualified! There isn’t enough quality female talent coming through the pipeline. Oh, well that’s a pity it’s just the way it is I guess…
Bullshit.
This is a flimsy Band-Aid, doing a poor job of covering the gushing wound we know as extreme gender inequality reflected in venture capital. First of all, the notion that there do not exist enough qualified female candidates is hogwash.
According to the US Department of Commerce: “While nearly as many women hold undergraduate degrees as men overall, they make up only about 30 percent of all STEM degree holders.” Yet, according to Crunchbase, females hold 8 percent of partner roles at the largest venture firms, and women hold 15 percent of the partner roles at accelerators and corporate venture firms.
The reason there is a lack of women in the pipeline is because the pipeline was built to hire men.
Many of the female VCs I interviewed in my book, Women in Venture Capital also agree that the real problem does not take the shape of the “pipeline problem.”
First of all, press around gender equality in venture capital is almost always negative. Even if you had an interest and passion for a field, could you remain unperturbed by the fact that the odds are against you to begin with? There are so few women in venture capital that you’re unlikely to come across someone you feel comfortable approaching to be able to talk about the industry. As a woman, though you may have a potential interest in the field, you are less likely to know about it because you probably won’t have a network that expands into the realm of venture capital. It is much more likely a guy would know another guy who works at X firm than it is for a woman to say she knows another woman who works at X venture capital firm. Your network as a woman in venture capital, one of the most network-driven businesses, is already smaller to begin with.
Second, venture capital is not an industry that actively recruits. If you’re in college, you’ve probably seen companies come to your campus for recruitment events to build relationships with potential hires and guide candidates through the application process. Venture capital firms don’t do that. Andreessen Horowitz doesn’t have a “Now Hiring!” sign. Venture capital is an exclusive club that only grows through a non-systematic yet very selective process. That selectiveness comes from already knowing the people who work there. Not only must you know them, but they must have had enough working experience with you in the past to vet your value for the company. The employee must believe you have some value-add, you are legitimate, and you have a good way of analyzing the potential growth of companies.
Since there is only a 2 percent management fee in a fund, there isn’t enough money or human resources to conduct extensive hiring efforts. Instead of digging to find the best talent, a new hire only joins when someone on the team already knew they’d be a good fit for the firm. Venture investment has had the motto of being extremely risky, and traditional wisdom identifies the risk-taking macho male psyche. However, females are equally able to take calculated risks. Despite that fact and by nature of pattern recognition and homophily, the mostly male network of venture capital ends up hiring out of the same pool.
So, how do you navigate an industry that recruits so stealthily and is more inclined to hire males? You have to stand out and outperform. If everyone goes through the door, jump through the window.
This post is part of a blog series where I share tidbits from my book, Women in Venture Capital and expand upon some of the themes within the book. If you’d like to join me in this discussion, please feel free to email me at kjc83@georgetown.edu or connect with me on LinkedIn. Also, you can find my book on Amazon — here is the link to buy it: https://www.amazon.com/dp/B07KMHC853
