Only two percent of venture capital funds went to female founders in 2018. To make that number even more shocking is the fact that companies led by women perform sixty-three percent better than all-male teams. We could continue piling on even more, and point out that in the current venture capital cycles, there is no current trend line that puts women above ten percent representation, ever. How should we feel about the fact that approximately ninety-seven percent of the current overall investor base is male, very network and rolodex driven, and nearly impossible for women to tap into?
To meet those numbers head on, it's important to talk about wealth and the direct correlation to women. Right now in the United States, women hold eighty-six percent of the buying power across all consumer product categories. Women also, for the first time in recorded history, own the majority of personal investable assets- a number floating somewhere around twelve trillion dollars. Lastly, the majority of VC backed companies are actually selling D2C, with women holding that buying power. The reason I am making a case with all of these numbers is to shed light on a conversation every person in business should be having: female founders are not getting funded, regardless of the fact that women:
Launch startups and design products
Hold the buying power, therefore would resonate with a female-designed and female-led product
Hold the wealth and investable assets.
Elevating Female Entrepreneurs
Betsy Bluestone, the commercial discovery leader of P&G Ventures, has run into the same problem, and now works in a space to close this gap. "We just weren't seeing as much innovation from diverse and female led teams as we wanted to but we know the female founders are out there." With a partnership and support from parent company P&G, who spends over one billion dollars annually on woman-owned businesses in the U.S, Bluestone has hit the ground running, hoping to turn the investment world on to a more efficient, more flexible model. The partnership, with The Vinetta Project and Founder Vanessa Dawson, has allowed both P&G and Vinetta to expand their network reach, and bring access to areas it really has never been. As a female founder herself, Dawson found that women often lacked access to capital and high growth networks, and Vinetta Project is the solution she needed as a founder but didn't have.
From A Failure Standpoint
My perspective, having spent decades now (plural) in product design, focuses heavily on the massive failure rate we see in both consumer products and funded startups. Seven out of ten consumer products fail, and in the venture capital world that number could be as high as nine out of ten as a failure rate. These numbers tell us the process is lacking and when we factor in female engagement, it isn't difficult to see why and how this is creating a failure cycle .
It's Time to be Deliberate
Bluestone, a high-level executive within a large corporation, is an outlier. She is using her experience and career with P&G to answer this inequality and imbalance. Another outlier making noise in this space is Trish Costello, CEO of Portfolia. Costello stepped out of the VC world for a few years and when she stepped back in, she made a startling observation. There were three major trends relating to specific aspects of wealth, but the venture world wasn't shifting to meet those trends. Those trends, we touched on above, had everything to do with the wealth shifting to women, while the funding... didn't. Costello also noticed that the model of what VC's were looking for, and the model those startups had to step into were also both lacking.
Expanding the Investment Scope
These issues are limiting the playing field by attempting to put all those who seek funding into a one-size-fits-all box; and that box was seemingly designed for a twenty-something male with no obligations and the ability to move to Silicon Valley for three-months. Portfolia is a venture fund that brings women to the investment side of the table. Their inclusive model is designed for women, with the highest percentage of women investors than any online equity platform in the world.
Looking Forward with Women
What we're seeing with Vinetta Project, P&G Ventures, and Portfolia is the core of what makes investing successful with growth around the areas that have been underperforming for some time now. As Costello put it, when you have a system where seventy-five percent of the players aren't going to produce any income at all, you have to really question that entire system. It's great to see successful, engaged women looking to the future and recognizing that the path to success needs more women at the forefront. The time to disrupt venture with a new model that activates the wealth of women is now.
The Impact Trifecta
A startup Portfolia has invested in is a saliva test for the early detection of breast cancer. This startup represents what I'm calling the The Impact Trifecta. There's 1) a huge market for this product, 2) there's a massive opportunity for big returns, and 3) this will create a really big impact for women around the world. Of course returns are the number one item for any investment firm, but we are seeing this trend where this trifecta is the goal- ROI is no longer the only standard. For women in startups or considering becoming an investor, it's important that you know that the changes we want to see will not happen if we do not continue initiating. Costello pointed this out as well, recognizing that if women want the companies and innovations specific to our needs- the only way for that to happen is if we, as women, step up and do it.