How to achieve gender equality in a single generation
Date Updated: Thursday, November 21, 2019
This is a guest post from, Leslie Feinzaig, CEO of Female Founders Alliance.
This summer, Melinda Gates and a squad of celebrities teamed up to launch the #equalitycantwait campaign. At the current rate of change, the World Economic Forum predicts it will take 208 years to achieve gender equality. What’s more, progress has stalled in closing the gender leadership gap across every single sector. This is all very grim news, and the call to action for all of us to start a conversation about gender equality is simply not enough.
I have a better idea. There’s something else we can do—a top-down, action-oriented route to achieving gender equality in a single generation. And it has to do with venture capital.
Venture Capital is world changing
Venture Capital (VC) is an investment strategy that takes big bets on startup companies and helps them grow really big, really quickly. It’s the money that fuels Silicon Valley and transforms industries in ever-shortening periods of time.
In systematically fueling aggressive company growth, VC has become the most prominent catalyst for global economic disruption. Consider recent findings from strategy firm Innosight. In 1965, the average tenure of S&P 500 companies was 33 years. This dropped to 20 years by 1990 and is projected to shrink to 14 years by 2026. Innosight further predicts that about half the companies in the S&P 500 will be replaced over the next 10 years. And you know who’ll be doing the replacing?
Venture-backed companies, that’s who. Companies that grow from two guys in a basement to thousands of employees in a few years. Microsoft was founded in 1975 and took 11 years to go public. Facebook did it in eight. Google in six. Amazon in three.
Today’s venture-funded startups will become tomorrow’s dominant companies. And today’s venture-funded CEOs will become tomorrow’s billionaires. These leaders perpetuate power by investing in the next generation of people who can join their exclusive club. And this exclusive club has outsized impact on every aspect of the economy, from equity to climate change to new technology.
Just imagine what you can do when you lead a company at scale. You can create thousands of jobs for women and men and non-binary people; pay fairly and provide benefits; offer training that equips the underemployed for new jobs; decide what research & development to fund. That’s the power of Venture Capital. It’s not just a path to money, it’s an accelerated path to power and impact.
It benefits everyone for business leaders to be more representative of the stakeholders they serve. As consumers, employees, and citizens, we are all better served when business decisions are informed by diverse points of view. Unfortunately, and perhaps unsurprisingly, less than 3% of venture capital is invested in women, who own a tiny fraction of all startup equity. If we don’t change these numbers quickly, the global business elite will remain highly homogenous for generations to come.
Why women are turning away from Venture Capital
Through my work with the Female Founders Alliance, I’ve come across more than 1,000 startups founded by women and non-binary individuals. Many of these companies are not designed to scale, but those that are still regularly fail to raise VC. A growing contingent are refusing to even try. They survive on shoestring budgets, unable to invest in growth.
In conversations with founders, I routinely come across three barriers that sit between them and VC. First, there’s the paradox of ambition. You need to be hugely ambitious to launch and scale a company. But it’s intimidating for a woman to own up to her own ambition, especially when you believe you’ll be disliked and penalized for it. I recall many times when my ambition got me labelled “bitch” by the very people whose success I was fighting for.
This barrier is further amplified by Silicon Valley’s conflagration of ambition and its evil cousin, ruthlessness. Back in 2014, a VC partner celebrated Uber for its "ruthless execution" and "swagger". But while these are certainly traits that can catapult a company into achieving big goals, you can in fact be ambitious without being ruthless. And you should.
Second are attitudes towards risk-taking. In childhood, girls are socialized to avoid risk, while boys are socialized to take a chance—and the startup space is no different. It’s hard for a woman to take a big risk knowing she’ll be forever punished if she fails. Meanwhile, men are handed millions to take their company from Incorporation to Initial Public Offering in under 10 years.
Finally, women aren’t leading with the economic opportunity. It’s not for lack of vision: women founders are more likely to tell you about their huge intended social impact than their huge intended exit. But investors look for returns, and create close networks of mutually beneficial relationships built on those returns. In order to take part, women must become comfortable with the concept of making money, and should be encouraged—not judged—when they do.
Funding, not advice
The result is a catch-22. The attributes that VCs look for—ambition, risk-taking, huge financial success—are precisely the things that women are punished for exhibiting. This results in a high-potential set of founders who end up thinking too small, pitching meekly, bootstrapping for far longer than is healthy, and underinvesting in companies that could scale. It’s a giant waste of economic potential.
All the advice in the world won’t make any difference unless and until venture investors take note. And they should, because talent is equally distributed, but opportunity is not. If you’re not seeing as many women founders as men in your deal flow, you’re missing out on half the opportunity.
It’s time for women to stop avoiding VC, and for VC to start meaningfully funding women. Because scaling a company isn’t just a vehicle for making money—it’s a vehicle for changing the world from the top down. In that successful pursuit of aggressive scale, venture-backed companies offer us an opportunity to diversify the world’s business leaders in one single generation, generating jobs, new wealth and economic opportunity for all in the process. Just in time for my daughters to enter the workforce.
About Leslie Feinzaig
Leslie Feinzaig is Founder & CEO of the Female Founders Alliance, a network of founders, investors, partners and champions that collaborate to help women and non-binary startup leaders succeed. FFA offers programming, community, incubation, deal flow and investment opportunities, with a mission to increase the number of successful member founders 20 times over in 10 years or less. Leslie’s background is in technology and strategy consulting, with a BSc from the London School of Economics and an MBA from Harvard Business School. Leslie was named one of Forbes Magazine’s 100 Most Powerful Women from Central America & the Caribbean, Seattle Magazine’s Most Influential People, and Puget Sound Business Journal’s 40 Under 40. She’s a frequent speaker and published author. She was born and raised in San Jose, Costa Rica, and now lives in Seattle with her husband and their two daughters.