The troubling sexism that persists in tech
Last April, I attended a meeting of Angel investors—individuals who invest personal funds in startups and other early-stage companies—that gathers every couple of months in Portland, Oregon to hear pitches and decide whether to invest. Angel investors are unlike venture capitalists in that they invest their personal funds, but all too similar when it comes to the reality that most are male.
I found this firsthand when, fifteen minutes before the event started, I found I was the only woman in the room—and only two more entered by the time the meeting convened. The men in the room stood around in clumps chatting with each other, trading business cards, and sipping wine while, taken aback, I wondered where all the female investors were. I figured since the meeting didn’t start for a while they must still be on their way, but in total, out of the 25 people in the room, only three of us were women.
I may only be 18, but I’ve been involved in the adult startup world for years now: I co-founded a company at 15, and am now interning for a rapidly growing retail startup and a Portland-based venture capital firm. Because of my past work, I have been well aware that women are dramatically underrepresented in venture capital—in terms of both having the power to fund as well as receiving funding. The first comprehensive study on women in venture capital, completed in 2016 by TechCrunch, found that only 7 percent of venture partners (the people at a VC fund who control where its investment money goes) at the top 100 VC firms in the world are women. There is also an astounding gender gap in who receives the funding itself. Each year, even though women own nearly 40 percent of all businesses in the country, 93 percent of venture capital funding goes to companies with male CEOs. Venture capitalists invested $58.2 billion in companies with all-male founders in 2016, while female founders received just $1.46 billion. I have even met such female entrepreneurs around the country who told me about their struggles to raise funding for their startups from male venture capitalists (VCs) who just “didn’t get it.” Yet until that night, I hadn’t fully comprehended the extent of just how much the people who already have a seat at the table affect who else can join them there.
But it turns out this gendered gap of access to the venture capital pipeline, though horrible in and of itself, is hardly the only concerning gender-related aspect of the VC world. Now, the world is learning that many of the women who do make it in the startup world—and in tech startups especially—face sexual harassment and inappropriate, demeaning comments at the hands of their often white, male financiers. Over the last few weeks, multiple female founders have published their personal testimonies about the discrimination and sexual harassment they’ve faced from the men who invest in their companies. A now-famous New York Times article published the experiences of more than two dozen women who had encountered sexual harassment. The piece included accusations against Dave McClure, who founded the high-profile startup accelerator 500 Startups, and Justin Caldbeck, who ran the $300 million fund Binary Capital until his resignation a couple of weeks ago. Successful tech entrepreneur Cheryl Yeoh also recounted in a blog post how Dave McClure hit on her, then kissed and groped her. Lindsey Meyer, who received a $25,000 angel investment from Caldbeck, called tolerating his harassing text messages, kissing, and groping as “the cost of being a nonwhite female founder.” Another female entrepreneur spoke of how she was rejected for funding after she refused a proposition made by an investor. Yet another founder showed the Times the increasingly suggestive messages she received from a potential investor. And the New York Times piece is hardly the only evidence of this behavior. Earlier this year, Susan Fowler, a site reliability engineer at Uber, wrote a telling personal essay about Uber’s patterns of sexual harassment and discrimination against female engineers which inspired responses of outrage from the media and startup communities that led Uber’s former CEO Travis Kalanick to open an internal investigation into these claims.
There is already an inherent imbalance of power between VCs and entrepreneurs. Entrepreneurs rely on venture capitalists to provide the funding necessary to build their businesses; If VCs don’t invest, then their startups will likely run out of cash and cease to exist. Male venture capitalists’ misuse of this power imbalance, however, has become the norm. As the women who spoke out about their experiences with sexual harassment noted, the problem wasn’t just that they experienced discrimination in the first place, but that Silicon Valley’s culture encouraged them to play down the problem. When they reported their experiences to the investors’ firms, the problems were ignored. Very little action was taken. Women were even warned to keep quiet or risk ostracism.
A venture capital system that tolerates sexual harassment of female founders on the part of male investors means that fundraising is only more precarious and difficult for women entrepreneurs. Fundraising is also already difficult enough as a woman thanks to stereotypes about women in STEM and leadership more generally that encourage VCs to treat males and females differently. For example, while male entrepreneurs are questioned about potential growth, females are asked about potential losses. In boardrooms, men are called “young, promising, and bold,” while females are “young, inexperienced, and risky.” And yet, these gender stereotypes are hardly supported by evidence. In fact, according to First Round Capital, their investments in companies with women in senior leadership positions have delivered 63 percent better returns than investment in men-only leadership. Treating female entrepreneurs as less capable solely because of their gender is therefore not just demeaning, but economically unwise: Investing in women not only creates a more equitable society, it also creates a more prosperous one.
Despite the growing concerns and increasing chorus of outrage surrounding the issue of sexual harassment in startup and venture capital, I’m still hopeful about the future of this industry. I am confident that 24 women speaking to the New York Times about their experiences is just the beginning of massive progress in how this industry approaches sexual harassment and gender discrimination. Many influential figures—from Reid Hoffman, founder of LinkedIn, to Salley Krawcheck, founder of Ellevest, to Katrina Lake, CEO of Stitchfix, to Kathryn Minshew, founder of The Muse—have spoken up in support of the women who came forward or shared their own experiences.
Additionally, more and more female-founded venture capital funds launch every month. When I think of startup founders, I think of my managers and mentors this summer, who left jobs at Nike to found a clothing company for badass women. When I think of venture capital, I think of my Senior Project advisor, who has committed an entire fund to investing in women and minority founders. Despite the culture of inequality that persists, there are also many bold, brilliant leaders—some of whom have spoken up recently and some of whom will continue to fight hard, quietly—who make it seem inevitable that this industry will make change.
The industries of startups and venture capital are founded on principles of rapid change and nimble, graceful pivots in ideas and plans and business models. Today, we have the opportunity to make sure that this problem is no different—so let’s pivot.
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