November 16, 2017
In the past fifteen years, women have been starting businesses in unprecedented numbers. Utilizing programs offered by the Small Business Administration as well as local Chambers of Commerce, women have been making rapid inroads into the world of business. Their businesses range across the gamut of startup possibilities, from tech to services to small businesses.
Yet women business owners still make up a tiny fraction of the boards, C-suites, and company leadership in the world. While women often enter fields at similar levels to men, they are rarely or never promoted at the same rate. This means that at each level of company hierarchy, there are fewer women.
This division is most stark in Silicon Valley and in tech companies. A tiny fraction of women-owned businesses are able to access venture capital, and the majority of tech companies that do get VC have no women on their leadership teams. Studies have shown that when the exact same business pitch is delivered by a man and a woman, the VC team is more likely to grant the capital to the man, and less likely to grant it to the woman.
Venture capitalists have a key opportunity to begin to level the playing field for women in tech, and in business overall. How can they do so?
Acknowledge the Problems
Silicon Valley has developed a “bro” culture which is heavily influenced by the majority of the successful startup owners being young white men. With several recent high profile examples of these men being involved in sexual harassment, venture capitalists need to step up and acknowledge that the culture that has developed in the world of tech is unhealthy and ultimately unprofitable.
If VC teams don’t acknowledge their own inherent bias, it will be impossible to correct it in the future.
Ask “Where Are the Women?”
When VCs hear pitches from teams that are all white men, they should specifically ask: Where are the women? Why do you feel you can be successful without a diverse perspective on your team? After all, surveys of women customers are no substitute for having women in the room when decisions are being made. Companies that have a dedicated female perspective are less likely to fall into sexist pitfalls that get companies into trouble.
Venture capitalists have a unique opportunity to push startups to expand their vision of who the “best candidate” should be, and they need to use that for the betterment of the overall business field.
Intentionally Hire and Promote Women
Women also make up a tiny fraction of the venture capitalists making funding choices for startups. One way that venture capitalists can begin to correct their own internal biases is to intentionally hire and promote women to make these decisions. This can influence which companies come in front of them with pitches, and can even influence startups to see that they need to have a broader available perspective.
When planning a corporate event, it is an opportunity for them to send a clear message that things are about to change. Companies often say that they are gender-blind and they simply hire the best candidates, but research has regularly shown that being gender-blind (or race-blind, for that matter) enhances internal biases rather than correcting for them.
Demand Non-Discrimination and Transparency
Venture capitalists often have a great deal of persuasive power over the companies in which they invest. Another way they can make a difference for women in the field is to demand that the companies they invest in have policies which create non-discrimination and transparency in the company’s culture. Having these policies, and seeing them enforced from the beginning, can make a big difference in how businesses run over time.
Businesses which have women at the helm and in the C-suites are more nimble and flexible and tend to have better overall performance. This shouldn’t be surprising, many different studies have shown that diverse perspectives allow companies to adapt better to change. When companies make sure that they have women at all levels of the decision making teams, they create this diverse perspective for themselves.
This perspective is only enhanced when companies also make sure that people of color, disabled people, and more, are in the boardroom. Companies need this kind of multifaceted viewpoint in order to make good, productive decisions for the company over time.
Companies will need to work to get women involved at all levels of the playing field. Many women drop out of STEM fields early because of the rampant sexism and difficulty in making promotions and advancement feasible. But the benefits are obvious and important to businesses.
Venture capital firms have the chance to be the leaders of change in this area by hiring and promoting women internally, and then interrogating companies about why they haven’t done the same thing.
Read more about diversity initiatives on TechCo
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