Whatever way you look at it there’s a huge gender imbalance in investments in businesses so should we be celebrating the 2.7% announcement?
It’s to be celebrated that the money flowing into female founded companies has increased nearly 25% from 2018-2019 according to data compiled by Pitchbook. But, at 2.7% of total funds invested through 2019 and a monetary value of $3.54 Billion is it enough? To put that into context Softbank pumped $5 billion into WeWork over the same time period. Money well spent as we all know 😉
Published at the end of the year the Decksender 2019 Gender Diversity in Investment Report provides a detailed analysis of the state of gender diversity in investment and the start-up ecosystem. Check it out it makes for an interesting read.
However, this article is more about a point of view. It’s obvious that not enough is being done to address this issue. Why aren’t there more female founders? Is the old boys club at play, does this stem from a lack of female coders? It would be the obvious answer but investor gender bias is incredibly rare. Simply put the reasons seem to be highly complex.
We don’t have the solution. We’ve tried to create a platform that is truly democratic, gender is simply not a factor. However, the fact remains that we have more male members than we do female, why?
It would be the obvious answer but investor gender bias is actually incredibly rare.
It’s fair to say that if we had the answer then we’d be doing something about it, we’re a pretty pro-active bunch.
So this brings us back to the question, should we be celebrating the 2.7%?Much like the reasons behind why it’s such a small number this is perhaps a complex question. To cry foul and bemoan this as a failure industry wide may be doing the industry a disservice. To celebrate may wash over the fact that clearly not enough is being done. Either way it’s hard to call it a success.
Having spent a significant amount of time compiling our gender diversity in investment report what we have learned is that barriers seem to appear for female founders way before the investment stage. In fact way before female founders probably thought about being female founders.
Generally, girls are taught from an early age to take fewer risks than men. Some of this is nature, biological instincts, but this is then overly reinforced by parents and peers. Research shows that mothers are far more protective of girls than boys in situations that could be perceived as risky and with financial risk-taking being long-associated with testosterone levels, girls may be hard-wired to take fewer risks. Whatever your take it’s a complex situation born with neither view point presenting a clear answer.
What is certainly apparent is that if girls are taught to fear failure the idea of setting ones self up to intentionally fail is unlikely to be appealing. Is this even something their male counterparts consider? Whilst no founder sets out to fail it’s an understood part of the iterative process of finding what works.
Here’s an idea, it might seem simple but maybe we need to stop using the word failure. Language is powerful, “Fail fast” is meaningful, perhaps it’s sending out the wrong signals? I don’t think for one minute that simply changing terminology will redress the huge gender imbalance but what is clear is that every inch of the investment world is very male. Maybe we can change that? It’s out of our control to pass through a sea change in the way girls are raised but what we can influence is the start-up/investment ecosystem. How we talk and how we behave in this world could be a step to making this world more appealing?
What do you think? What can Decksender do to address this imbalance?