I run a high tech company in a fiercely male-dominated industry. And even though I accept it, it can be pretty lonely. So I wondered, is it just my imagination, or is there a serious lack of women in tech? Off to the Internet I went to find out more information, and I was able to uncover a few decent nuggets that supported my thoughts:
- In the 2008 Catalyst Census, women held just 10 percent of corporate office positions and made up only 11 percent of board of directors in Fortune 500 tech companies.
- According to Dice, women account for 11 percent of IT management positions (defined as CEO, CIO, CTO, VP, Director, Strategist, Architect).
- According to Equilar, an executive compensation research company, in a study of 198 public companies with at least $6 billion in revenue, just five chief executives were women. Of the 22 technology companies, none had chief executives who were women.
So there it is, staring me in the face. But why? I found one reason. Venture Capital, which is pretty much the way you raise money in the tech world to start and advance your biz, is typically not given to women. Astonishing? Maybe. A recent Kauffman Foundation survey found that 38.5 percent of women-owned firms relied on personal equity, and 41.1 percent relied on outsider debt to start their businesses. In contrast, 31.6 percent of male-owned firms relied on personal equity, 29.9 percent on outsider debt, and 26.1 percent were provided outside equity. The percentage of outside equity given to women-owned businesses was so negligible it wasn't even published.
Couple this with the fact that renowned VC John Doerr, famous for investing in Google, Amazon and Intuit, publicly provided the following advice to other VC's: "Invest in white male nerds who've dropped out of Harvard or Stanford." That sure ain't going to help our cause.
Are women to blame for getting in their own way? Sometimes. According to a study from the University of New Mexico Anderson School of Management, women managers are three times more likely to underrate their bosses' opinions of themselves. Men slightly overestimated how their bosses viewed them, and women underestimated others' positive opinions. Maybe this is a reason why it's tough for women to get funding. Or is it because:
- We don't think our idea is worthy?
- We don't think we can compete against men?
- We want a work/life balance with a slower growth company, therefore VC's won't give us money?
I don't really know what the reason is. Nine years ago I trekked to the land of VC's on Sand Hill Road in Menlo Park. I visited about 10 VC's and talked to dozens more telling the VerticalResponse story. I spoke with passion about how we were going to change the lives of thousands of small business owners with e-mail marketing.
Like many before me, doors slammed in my face and slammed behind me. "You'll need far more than a few million to get to your target," or "We don't invest in early stage companies," or "What experience do you have in fast-growth companies?" are just a few of the excuses I was given, all by men. Did they really mean that? I'd like to think so. I'd like to think it wasn't because I was a woman, but who really knows. Because I certainly did have experience in high-growth companies and was actually part of an exec team that went public in the dot-com. Anyway, we never did get that funding, but I was lucky to have friends and family that believed in what I wanted to do.
About four years ago we turned profitable and have been growing each year. We've won Fastest-Growing Company Awards from Inc., the Stevie Awards, Deloitte and Biz Journals. And now we get no less than three calls per week from the very door-slamming VCs that initially turned us down. And what do they want? They want a part of something that is in a great spot and growing…after the fact.
The venture capital community itself also lacks women, and follows the pattern of high-tech companies pretty closely when it comes to having women at the top. The last report I read was from the Kauffman Foundation: Gatekeepers of Venture Growth: The Role and Participation of Women in the Venture Capital Industry. It noted that women represent less than 10 percent of high-level venture capitalists. It also notes that female entrepreneurs historically have received a VERY low share of all available venture capital, as little as 4-9 percent. However, it does state that women VCs played a major role in most of the deals that went to female entrepreneurs, regardless of how few they were.
I did a cursory look over 4 popular venture capital firm's websites to see the ratio of men to women they display and it somewhat matched the findings:
- Draper Fischer Jurvetson – Out of 20, 4 were women (20%)
- New Enterprise Associates – Out of 16, 2 were women (12.5%)
- Mohr Davidow Ventures – Out of 23, 7 were women (30%)
- Kleiner Perkins Caufield & Byers – Out of 16, 4 were women (25%)
So if Venture Capital is the chicken and women-owned businesses are the egg, how can we get past this vicious cycle? I'd like to call on the venture capitalist companies that are run by men. Promote more women to senior level and partner roles and you'll be surprised at the new types of exciting businesses women can bring to the table, and the profits you can deliver to your funds.