Pando

Does a VC’s unconscious hesitation to fund women start at home?

By Sarah Lacy , written on February 11, 2016

From The Gender Wars Desk

Finally, in 2016, the Silicon Valley establishment has agreed that the whole “women in tech issue” isn’t because of education or a pipeline problem or because women just don’t like math.

The powers that be have grudgingly accepted this place isn’t the meritocracy they’ve talked up for years. It’s widely acknowledged (by most of us anyway) that there is a culture problem within startups that makes women want to go elsewhere and that there’s some serious unconscious bias going on.

But untangling that knot of unconscious bias-- even talking about it the wrong way-- is like defusing a gender bomb.

The worst of our gender problem seems to be at the very raw startup level where hiring and firing and funding decisions are based more on feelings than resumes or raw qualifications. VCs refer to hiring a new partner like “entering a marriage.” It just has to feel right. The new partner needs to feel like “one of us.” It needs to be someone with a track record of success and deep connections in the industry. All of those things stack the deck against women. As you’d expect, the number of female GPs has decreased since the late 1990s, with some of the more prominent ones starting their own firms.

It’s hard to imagine the lack of women in partner roles is not part of the reason behind another alarming stat: just 7% of venture-backed startups are founded by women. Particularly given that funding a company is so frequently also a matter of gut feeling and connection with the entrepreneur, not anything quantitative. One would imagine female-only founding teams is even rarer, as are companies founded by women that are not female-oriented in nature like RentTheRunway, Honest, or Birchbox.

There are endless anecdotes about investors directing questions at male co-founders or having to ask their female admins if an investment like Refinery29 or ShoeDazzle is a good idea.

What’s so frustrating about this is the easiest way for women to change the bro’d-out, uncomfortable culture of Silicon Valley is to simply start their own companies. It’s also frustrating because other minority groups have done better. Indian immigrants starting companies for instance have indexed higher than the Indian population in the Valley at times. I don’t believe it’s as simple as all men in the Valley are chauvinists.

Finally, I read something yesterday that finally gave me a clue at what could be behind some of the bias: A far lower percentage of Silicon Valley power families have two working spouses, compared to the national average.

The fact jumped out at me while reading this thought-provoking Medium post by Medium founder Evan Williams on growing companies and families. He mused about his differences founding companies in different stages of life, with kids and not with kids. More interesting: He polled a “large” group of friends in tech about their own work life balance. Given it’s his peer group, it’s a safe guess a lot of these folks are successful founders and investors, and by his own admission most were male.

The most interesting bit:

Help at home is the rule.

  • Exactly half of respondents said both spouses in the household worked.
  • 73 percent had household assistance with the kids (the ones who didn’t, not surprisingly, generally reported that they had older children).
  • And 77 percent of founders, compared to 64 percent of non-founders, reported having household childcare assistance.

Only half of those he surveyed only had one working parent. That’s 50% more single-earner homes than the national average. That was a shock to me, until I really thought about VCs and high level founders and CEOs I know. And then I wondered if the real percentage of dual career households at the top is even lower.

Before I go further, let me say I am not -- not, not, not -- criticizing any woman for staying at home with her children. Many days I envy mothers who do that. One thing that convinced me to start my own company was having kids, and knowing whatever I was going to spend my days on had to compete with spending my days with them. If there isn’t a work passion that matches that, and you don’t have to work through economic necessity, I see nothing wrong with staying home and raising your children full time.

The only reason a mother’s decision to work or stay home is relevant is that it can set unconscious expectations about a woman’s role to those around you. A recent Harvard study showed the impact of working mothers on children. From the New York Times write up of it:

In a new study of 50,000 adults in 25 countries, daughters of working mothers completed more years of education, were more likely to be employed and in supervisory roles and earned higher incomes. Having a working mother didn’t influence the careers of sons, which researchers said was unsurprising because men were generally expected to work — but sons of working mothers did spend more time on child care and housework.

Some of these effects were strong in the United States. Here, daughters of working mothers earned 23 percent more than daughters of stay-at-home mothers, after controlling for demographic factors, and sons spent seven and a half more hours a week on child care and 25 more minutes on housework. 

If a mother sets the tone for children on what a woman’s role in the world is, why wouldn’t a wife set the tone for a husband as well, somewhere back in the part of his brain that causes unconscious bias? It’s a fine line between telling a “momtrepreneur” with young kids you “can’t imagine how she does it” and deciding, “I’m not gonna back her because I don’t know how she’ll do this…” Especially in a market like 2016 where VCs are going to write so many fewer checks and bet on fewer and fewer new companies.

On a personal level, reading Williams piece I had a visceral Proustian flashback to the time I was pregnant and talking to people in the industry about how they balanced the two. Most of the people I spoke with were men, not surprisingly given industry’s gender realities. And most of them didn’t have a lot of advice on debates like nanny vs. au pair because their wives stayed home once they had kids, a luxury most of us don’t have.

A surprising number of people asked if I was going to hire full time childcare at all. What else would they assume I would do with a newborn baby? Run the company during naps?

But there was also an undercurrent to these conversations that it was somehow the wives’ responsibility-- surprisingly for a place supposedly as socially liberal and would be meritocratic as the Valley. I even heard comments like: “We just didn’t want strangers raising our kids.” And if that’s the belief, then, well, one would imagine the founder/CEO/VC wasn’t going to be the one to quit his job.

Point one: If someone is in your home for eight-plus hours a day, they rapidly cease being a stranger. And point two: Williams also found that north of 70% also had regular childcare. (Again, no judgement. But let’s be real. Even a stay at home mom can’t and shouldn’t fulfill every need your child has. The child is going to have to encounter new people at some point...)

These investors aren’t alone. A survey of Harvard Business School grads found that women were stunned to discover there was an assumption in their marriage that their career would just take a backseat. From a write up of the study:

The authors found, definitively, that the “opt-out” explanation is a myth. Among Gen X and baby boomers they surveyed, only 11 percent of women left the workforce to be full-time moms…

But while these women are still working, they are also making more unexpected sacrifices than their male classmates are. When they graduated, more than half of male HBS grads said they expected their careers would take precedence over their partners’. Only 7 percent of Gen X women and 3 percent of baby boomer women said they expected their careers to take precedence. Here’s what they did expect: The majority of women said they assumed they would have egalitarian marriages in which both spouses’ careers were taken equally seriously.

A lot of those women were wrong. About 40 percent of Gen X and boomer women said their spouses’ careers took priority over theirs, while only about 20 percent of them had planned on their careers taking a back seat. Compare that with the men: More than 70 percent of Gen X and boomer men say their careers are more important than their wives’. When you look at child care responsibilities, the numbers are starker. A full 86 percent of Gen X and boomer men said their wives take primary responsibility for child care, and the women agree: 65 percent of Gen X women and 72 percent of boomer women—all HBS grads, most of whom work—say they’re the ones who do most of the child care in their relationships.

A friend who passed this on to me described it as “Kids don’t kill women’s careers, husbands do.”

I’m not saying VCs whose wives stay home consciously believe women-- especially women with children-- can’t be founders. I literally took a baby fundraising with me, and raised an oversubscribed round at excellent terms. I’ve experienced plenty of bias in my life, but the truth is I didn’t during fundraising.

But other women have had very different experiences. Their own lives might help to explain why somewhere back in their unconscious brain, some men in tech find it so hard to imagine how a female founder could “have it all.”