Editor's note: This post has been updated since it first published to clarify Audur's business and Tomasdottir's observations about Iceland's banks.
From her hometown of Reykjavik, Iceland, serial entrepreneur and investor Halla Tomasdottir sees the increasing number of billion-dollar startups in no uncertain terms.
"I can't help but question the high valuations, especially for companies that are not earning revenues and seem to have no clear path to change that," she says. "We already see some signs of a slow down, fewer IPOs, some tech companies not living up to their IPO prices, and we are seeing layoffs."
For the record, Tomasdottir knows a bubble when she sees one. Remember when Iceland's economy collapsed in 2008? While all three of the nation's major private banks were defaulting, the investment firm she launched in 2007, Audur Capital, emerged unscathed from the disaster. Tomasdottir credits Audur's adherence to more "feminine" principles, such as total transparency with investors and "profit with principles," as key to the firm's survival. Audur went on to grow its assets under management to $350 million, before merging with financial services firm Virding in 2014.
Then as now, Tomasdottir says her experience taught her that there's a relatively simple way to avoid future bubbles and industry crashes: finance desperately needs the feminine touch.
The answer, insofar as there is one, is to give more women a seat at the table, both as entrepreneurs and investors, she says. "I believe this can lead us to better bottom lines... and ultimately more sustainable returns."
Research tends to agree with Tomasdottir that a more diverse group--be that a government body, or a business venture--has the stronger bottom line. A 2014 study from the accounting firm Rothstein Kass, for instance, found that women-led hedge funds counted returns of 6 percent between 2007 and 2013, while the HRFX Global Hedge Fund Index--which represents the global industry standard for hedge funds--fell by 1.1 percent during the same time. What's more, women-led tech companies bring in 12 percent higher revenues than similar male-led companies, according to 2013 research from the Kauffman Foundation, though they captured less than 3 percent of total venture capital investment between 2011 and 2013, according to a report from Babson College.
The significance of a woman's contributions is not always reflected in the upper echelons of management. Back in 2006, leading up to Iceland's economic crash, Tomasdottir became the first female chief executive of the Iceland Chamber of Commerce, which was predominately male at the time. She says the Icelandic banks and businesses placed an "excessive emphasis on the short term." She remembers that leaders would often dismiss the fact that inflation was up, and interest rates were surging dangerously, when salaries and spending power were similarly high. "There was very little concern for more feminine things, like having a talent or leadership crisis," she says.
To be clear, Tomasdottir says by a "feminine" approach, she doesn't simply mean a more conservative one or even a female one.
"It really is about balance," she says. Rather than being risk-averse, she says a feminine perspective on business is more risk-aware than a masculine one. It also considers that human beings--and not Excel spreadsheets--determine the success of any economic transaction. This is "emotional capital," she says, and it's something that can't be ignored.
"I have serious doubts that there is such a thing as a rational, economic man," Tomasdottir says. "We're far more emotional beings than economic theory allows for."
What's to Be Done
If the cure to the ailing global economy is, in fact, getting more women into the executive ranks, and at the head of startups, it's going to be an uphill battle. Women continue to face sexism at work, whether blatant or institutional. The tech industry, of course, is not a shining example of inclusion: Only about 30 percent of employees at Apple, Twitter, and Google are women, according to the companies' demographic data, released in 2014.
Tomasdottir is trying to do her part: After Audur, she went on to launch a second firm in Copenhagen, Denmark, called Sisters Capital in 2013, which aims to promote women-led companies across Northern Europe--though it's still in early stages. Her advice to women entrepreneurs--and the cliché can be forgiven--is to embrace themselves fully, and trust their "inner voice."
Tomasdottir admits that she wasted several years of her life eschewing womanhood as part of her professional identity. "I was reluctant to use my skill set as a woman... Many women who've succeeded have been men in skirts--they've adjusted to rules of the game designed by men," she says.
Supporting one another will be critical, as it then shows other women that the model can be effective. With Audur Capital, Tomasdottir started by raising funds from 10 leading women investors in Iceland; thereafter, "we ended up seeing as many men appreciating our approach," she says.
Ultimately, her message is almost poetically simple: "It takes the DNA of men and women to create life. Why wouldn't it take the DNA of men and women to create organizational life?"