Why It’s Hard To Be A Female Founder in Silicon Valley
12:50 pm, March 7th | by Meredith Lepore
It’s tough out there for a female founder of a startup. You have this great idea that you know will work, but there’s just one little problem: You need a ton of money to make it happen. But there are many more obstacles for female founders in Silicon Valley, the number one hurdle being that they aren’t “white male nerds.”
According to recent research from The University of New Hampshire Center for Venture Research, only 8.9% of all proposals presented to angel investor organizations were put forth by women. Men and women tend to seek out investors of the same gender which automatically puts women at a disadvantage since most investors are men. According to The Diana Project, only 10% of VCs are female. According to the Center for Women’s Business Research, data shows that while about 41% of private companies in the U.S. are owned by women, only 3-5% of them get venture capital.
So why is this happening? Well part of the problem is though we are seeing more and more female entrepreneurs spring up everyday and women make up 31% of business school students in 2012 (up from 26% a decade ago) and earned 18 percent of all computer and information sciences degrees in 2008. the venture capitalists who are actually investing their money in these companies are still very much a boys’ club. In Noah Davis’s article for The Verge he noted that “Money men look for people who are a younger, better, smarter version of themselves. It’s human nature. The typical funder is an old, straight, white male, hence the typical fund-receiver is a young, straight, white, male.”
Davis pointed out that sometimes it isn’t blatant discrimination, but more psychologically based. Basically, women are from Venus and men are from Mars and they speak a different language. Laurel Touby, founder of MediaBistro, told The Verge, “I don’t want to blame men, but it’s almost like it’s a different language. What they see as confidence in a male, they may see as charm in a female. They may see leadership in a man, but charm in a female. They would fund leadership, but they might not fund charm.”
“Not only are these gals kinder and less defensive than the past decades but they know their stuff in tech. I was interrogated about my startup and with good cause. The questions were well thought out, unique in strategy and challenging in a “c’mon Heddi, you’re onto something big with this company but it’s my job to bust your balls until you get too big” way. And the best part – the questions and meetings were aimed at the intention that these women had my back and were really rooting for me.
I’ve had many meetings with women in Silicon Valley and all are great but there’s an LA Fear element. You know like in LA, its run on fear and paranoia (being a one industry town and all that)? Well the Valley has the same type of nervousness. Women want to strut their stuff and claim Hail Mary’s about their opinions but still shy away from truly being a happy and confident Rottweiler. But the East Coast? They’re knocking out the slam dunking image nonstop and they’re doing it with style, panache (yes, I do still say panache – you should also) and a flurry of intelligence that won’t be undermined by their male colleagues.”
Sometimes it’s just overt sexism. There is a basic fear that when these women have children they will choose their human baby over their startup baby or won’t be able to work to their full potential. Paige Craig, the co-founder of BetterWorks and an angel investor, said he felt horrible for thinking, “A pregnant founder / CEO is going to fail her company.” He had this thought after finding out the co-founder of a company he was considering investing in was pregnant. He wrote in a blog post:
“The founding team, Jessica Jackley and Dana Mauriello, are incredible ladies with exactly the spirit and attitude I’m looking for in founders. We’ve talked extensively, had lunch together and I saw first hand the amazing talent & drive these two bring to the table. And then, a week later I find out Jessica is pregnant…and this dirty little thought pops in my head. I’m thinking how in the hell is this founder going to lead a team, build a company and change the world for these businesses carrying a kid around for the next few months and then caring for the kids after. I can’t say I personally know anything about it but birthing and raising kids seems like the toughest job around. And now I have a founder who has to be a CEO and a mother.”
From The Verge:
“Cheryl Kellond experienced this likely unintentional bias first-hand when she was attempting to launch Bia Sports, which planned to make and market the first GPS sports watch targeted to women. She met with a number of VCs in an effort to secure funding, but they failed to see her perspective, which was that female runners were desperate for a device made specifically for them. “I was talking about sports and running, and everything I said was open to question,” she says. “One time, I stopped and I said, ‘You know what? You’re illustrating the gap in the market right now. Everything you just asked about is what Garmin is doing and it’s exactly why half the market is sitting on the sidelines. You’re proving my point with your questions.’” She continues: “If I had sent my tall, good-looking husband in to talk about the same market specifics, it would have been unquestioned.”"
This thinking needs to change, not least because these female founded companies can do amazingly well. Ramos found more than 125 companies in the high-tech sector with women co-founders or officers that have IPO’d or had $50 million-plus exits in the past decade. Not too shabby. Get on board, Silicon Valley!