Pando

Wonder Woman Island or the Avengers?

By Sarah Lacy , written on January 18, 2018

From The Gender Wars Desk

Last night, I watched Jessica Valenti -- a feminist advocate and author I respect a great deal-- on Comedy Central’s Alex Jones-parodying show “The Opposition.”

I became a fan of the show, when they were kind enough to have me on during my book tour. One of the gimmicks of the host Jordan Klepper, who parodies an alt-right conspiracy theorist as Stephen Colbert parodied Fox News in an earlier era, is to ask at the end of interviews: “Tell me something I already know.”

I was struck that Valenti and I essentially gave opposite answers to Klepper's question. Mine was: Men got us into this mess and women are going to get us out of it.”

Valenti’s was-- and I’m paraphrasing-- “men need to help us get out of this, it can’t all be up to women.”

The more I thought about it, this is a growing and subtle distinction as the #MeToo movement continues. It isn’t just watching heroes you once had get caught up in disgusting scandals. It isn’t just some terrifying and tone deaf reactions that presumed allies had to those stories. It isn’t just the walk back after the apology, and watching these predators get embraced again by an ecosystem. It isn’t just the feeling of how frighteningly widespread these things are. For a lot of older women like me, it’s the dredging up of painful things that have happened to us in our past that we’ve normalized or buried or talked ourselves into believing never actually happened.

There are those who want to educate men, who want men to be part of the solution, who are worried about going too far that they alienate men from their cause.

And there are those who just want nothing more to do with men. Who want to surround themselves with badass women and forge their own new reality where they don’t have to opt into the whole rigged game to succeed.

Some of this tends to fall on generational lines. Sheryl Sandberg is one of many who have cautioned all this #MeToo-ing can make men less inclined to include women to begin with. Meanwhile one of the hottest startups in New York is a women’s only coworking space with an 8,000 person waiting list.

I’m mostly hewing to the latter camp. In the last year, I’ve spent way more time with senior women than men in the industry-- a massive shift from the past two decades I’ve covered this industry. My career doesn’t appear to have suffered and those relationships have nourished me more personally. Pando had only male investors. Chairman Mom has more female investors than male investors. And, of course, Chairman Mom’s first event is just for women and entails taking over an entire town.

I think there is great power to be found in women being authentic, vulnerable, and real in safe female-only spaces. But when it comes to raising money, it also has limitations.

One of the only things that’s proven to increase the number of female founders a venture capital firm funds is adding a female partner to the firm. (Bloomberg tried to use data to argue the opposite of this, but as I detail at length here, I believe their methodology was fundamentally flawed.)

This is why a lot of younger female founders are primarily pitching, networking with, and aiming to get in front of female VCs. There are a lot of advantages to this beyond just avoiding a Justin Caldbeck situation. If a woman is building a company for women, they avoid the awkward “Let’s get the female admins/assistants in here to ask if they’d use this!” conversation.

And yet, there’s a chicken and an egg problem when it comes to female founders relying solely on female investors to fund their companies. Crunchbase released data yesterday that showed that the percentage of women raising money is stagnant, at 17%. As we’ve argued before, this counts companies with a “female founder on the team.” Founder is an incredibly vague title, so we prefer to track funding that goes to companies with female founder/CEOs. That is less than 3% of all capital dispersed, according to multiple studies and has actually backslid in the last year.

But no matter which metric you track-- the more forgiving one or the one that shows how many women in charge are actually getting funding-- the industry is stuck. So it shouldn’t come as a shock then that Crunchbase also said the number of women investors has increased by just one percentage point over the last 18 months. 

Men still control the bulk of the money, and if women aren’t targeting them, networking with them, and pitching them, they will continue to give more than 80% of the industry’s money to all male founding teams.

The sad truth is, as much as I’d prefer to think we can build a parallel ecosystem where women can support women, I don’t think we are anywhere close to that. And if I were to tell the younger me to avoid those decades of being a cool dude who could hang with the men, I likely wouldn’t have ever gotten funded as a founder to begin with. I certainly wouldn’t have gotten funded at the same levels.

In my experience, it’s always taken longer to raise money from female investors. I think that’s because they are more thoughtful and deliberate and less prone to making “gut” decisions. These may make them better investors (indeed, women outperform men on an apples to apples basis). It may make them better board members. It likely leads to more diversity as “gut decisions” are a proven breeding ground for unconscious bias. But in my experience, getting a large check quickly out of a female investors is much harder. And time and money are the two scarcest resources entrepreneurs have.

In today's Chairman Mom newsletter, I asked the community: Would your advice to the younger you be to spend more time networking and building alliances with women in your industry or with men? I'd love to hear female Pando readers' answer to the same question.