Every day this summer, MBA candidate Erica Swallow walked into the office of the Boston-based venture capital firm where she was interning and scanned the cubicles and conference rooms for someone who looked like her.
The only women she found weren’t deciding where the company should invest its money. Instead, they worked in support roles -- as administrative assistants, in human resources and marketing. When founders came to pitch the company for money, Swallow, the “lowly intern” was the only woman in the room, she said.
"It was just kind of uncomfortable to work in that environment," Swallow said. "I felt like, why am I doing this internship if it appears that the hiring funnel is such that this would never lead to a good job for me?"
Swallow's experience, which made headlines after she wrote about it on a student blog for MIT's Sloan School of Management, jibes with data on gender diversity in venture capital. Women make up just 4 percent of senior partners at VC firms, according to data from Fortune, which attempted to measure the figure in February of this year.
Startup founders need to go out and find investors -- venture capital firms -- to bet on their idea. But a major gender imbalance can lead to a variety of headaches for women entrepreneurs trying to raise capital. Wired reported this year on some founders who said they have been forced to field sexist questions about, and advice on, their love lives. Others described investors telling them they only give money to attractive founders, or being told to wear a wedding ring when pitching.
Experts say these women are subject to "pattern recognition" -- a wonky term that basically means investors are less likely to bet that a woman will be the next Mark Zuckerberg because she doesn't look like Mark Zuckerberg.
“Everyone brings their biases to the table and everyone brings their perceptions of what a founder is and who a founder is," said Kelly Hoey, who co-founded Women Innovate Mobile, an accelerator focused on startups with gender-diverse founding teams. "Change the person, and you change those perceptions -- all of a sudden, what didn’t seem like a good idea seems like a good idea.”
This is a big reason why men -- particularly good-looking men, according to one study -- are more likely to get funding for their ventures than women. Female-founded companies net as little as 7 percent of VC funds, research shows.
This sets up a vicious cycle for women, according to Alaina Percival, the CEO of Women Who Code, a group that pushes for more women in the tech industry: The lack of women atop VC firms makes it harder for female entrepreneurs to get VC funding. But you usually can't get to the top of a VC firm without some successful entrepreneurial experience, which usually takes VC funding, which women can't get because there aren't any women at the top of VC firms. Rinse, repeat, get nowhere.
Making things even more difficult, women tend to flee venture capital, and the tech industry more broadly, because it's hard to convince them to stick around if they don't see any other women rising through the ranks. A recent study of female engineers found that 1 in 4 left the field after age 30, compared to 1 in 10 men.
The VC world has long been an old boys' club. Heidi Roizen, an operating partner at venture capital firm Draper Fisher Jurvetson, wrote earlier this year about seeking funding for her software company several years ago and seeing a reflection of a partner behind her making lewd gestures during her pitch. Other men asked about her ability to be both a CEO and a mom.
The problem is getting more attention these days because more women are seeking VC funding, and more women are coming forward with stories of the sexism they face in the process, according to Hoey. Groups like the Women's Venture Capital Fund are popping up to take advantage of opportunities to invest in startups with gender diverse founders that traditional VC firms may have missed.
And there has lately been a slew of new data on the tiny share of VC dollars going to women, making people take a closer look at what kind of people work at the VC firms that are giving out the money.
“All of a sudden you see the people who are making these decisions are a very niche and close group," based on things like gender, education, race and socioeconomic status, said Hoey, who is also an angel investor and the chief marketing officer at Cuurio, a platform that helps companies and startups connect.
Despite the new attention the gender imbalance is receiving, many women are nervous to attach their name to the issue publicly out of fear it could hurt their chances of getting funding.
"Certainly attaching your name to calling an organization out is going to make you stand out as someone who you don't want to deal with," said Percival, the CEO of Women Who Code. "If that person isn't giving up and they’re going to go out and talk to more VCs and try to get funding elsewhere, they don't want that negative stigma attached."
Roizen published her post later in her career, once she had already established herself. In it, she wrote, “It pains and somewhat embarrasses me that I am not recommending calling out bad behavior and shaming the individual or individuals responsible. ... But as an entrepreneur who spent years in a daily battle for existence, I did not feel like I could afford the hit I’d take in exposing these incidents.”
Last week, Forbes published an anonymous account from the female head of a Silicon Valley startup about what it’s like to seek funding as a woman. Her story included an account of a not-so-thinly veiled business meeting at an investor's home, which ended in attempts at a backrub.
The anonymous entrepreneur wrote that “every person” she told about the incident said she needed to “go with the flow” until she finished raising money. “It seemed that silence was just one of the sacrifices required to get my business off the ground.”
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