At a time when there's much discussion of the role of women in venture capital and in entrepreneurship, Anu Duggal is betting that things are going to change, fast. In fact, she's working to make it happen.

Duggal, the founder of Female Founders Fund (F Cubed, for short), is a serial entrepreneur who started  India's first luxury wine bar and an Indian flash sales site, Exclusively.In. Then she decided to become an angel investor, seeing a wide-open opportunity: While an increasing number of women are gaining the skills needed to run a startup, venture capitalists steer only 15 percent of their investments to companies that include a woman founder.

Duggal is hardly alone -- the paucity of women in venture capital, and women in tech, was one of the major themes to emerge from the recently concluded lawsuit by Ellen Pao against venture firm Kleiner Perkins Caufield & Byers. In the closely watched trial, Pao claimed her former employer discriminated against her, and did not promote her, because she is a woman.

At the end of 2013, Duggal began raising money for her Female Founders Fund, to make angel investments solely in women-led companies. Duggal says she met with 700 potential limited partners. Second meetings, she says, hardly ever panned out. Among the people who eventually contributed to the fund, says Duggal, "There was one meeting. They either got it or they didn't."

Duggal's "it" is simple: Things are changing, especially the pattern recognition venture capitalists may rely upon to help guide their investment decisions. Over time, pattern recognition is supposed to help venture capitalists see opportunities that others miss, by helping them tune into subtle traits that help entrepreneurs and their companies succeed.

But pattern recognition has its downsides, all too often justifying what effectively appears to be ageism, sexism, and/or racism. And pattern recognition preserves the seeming sameness of so many venture-backed founders. In an extreme example, if young white male coders in hoodies have made venture capitalists lots of money, it makes sense that venture capitalists will continue to look favorably at young white male coders in hoodies. That's not so great if you're a midcareer woman with a more tailored wardrobe.

"If I were a male investor I would look at what worked before and try to replicate it," says Duggal. "I'm not criticizing them for it. I'm saying that the pattern has changed, we recognize that, and we want to make money on it."

"If you can make a product, that's great," continues Duggal. "If you want to understand how to get it to the right people and get them to use it, that's a whole different skill."

Duggal argues that this particular skill--marketing, really--is becoming ever-more-important, and she says it's women who are the experts. She's backing women who were early employees at consumer-focused companies like Rent the Runway and Quidsi--there are five Quidsi alumnae among F Cubed's entrepreneurs--as well as women with experience at companies such as Facebook and Procter & Gamble. "It's almost like the CMO is the new CTO," says Duggal.

So far, Duggal's instincts seem to be paying off. By the end of 2014, she had raised $5.85 million for her fund. It helped that, while she was fundraising, Bain Capital invested in Manicube, one of her early investments. "That was a great proof point for us," she says.

That same year, a dozen New York-based women entrepreneurs raised A rounds. That's not a lot, but F Cubed had invested in three of them: Manicube, which sends manicurists to offices; Eloquii, an e-commerce site catering to women over size 14; and Lover.ly, a wedding-planning site. In general, the fund's investments run from $75,000 to twice that; Duggal intends to reserve 60 percent of the fund for follow-on capital.

Measure, manage.

Duggal not only invests in her thesis that women are unjustly overlooked by investors, and will soon be running some of the most important startups. She's also intent on demonstrating its power to others.

It was F Cubed that first published the figures about the numbers of New York women who have managed to get A rounds. There'd been research done on the topic, but generally the results were presented as a percentage of women who get venture capital, overall.

Those numbers took on a lot more meaning when Duggal narrowed it down to A rounds, in New York, and then actually named the entrepreneurs who'd managed to do it. Most stats on women and venture capital inspire thoughts, of, "Oh, that's still really bad." Duggal caused a much more visceral: "Holy cow. You could get all these women together in a room. For dinner. At one table."

It was the effort to put together these stats, and a resultant collaboration with CrunchBase, that led CrunchBase to begin including gender information in its company profiles. The goal is to make data collection easier, and less reliant on how stereotypically masculine or feminine a founder's name appears, or what his or her picture looks like.

As any engineer would be happy to tell you, that which gets measured gets done. Duggal is intent on both.

Published on: Apr 3, 2015