Why VCs don’t invest in women led startups – my perspective

I just noticed lots of tweets citing me as an example of VCs investing in women led startups, and felt that I had to speak up about the issue. First of all, some VCs do invest in women led startups and don’t distinguish between women and men leaders. The VCs who funded SlideShare for example. Venrock has a history of funding women. Specifically, for David Siminoff and Dev Khare who funded SlideShare – a woman leading the company was never an issue. David Siminoff has funded other women as well, e.g., Lisa Stone from Blogher (I knew about that when I met him, and it did influence my going with Venrock). All our angel investors, Dave McClure, Hal Varian, Ariel Poler, Saul Klein, Mark Cuban – none of them cared one way or the other that SlideShare CEO is a woman.

So note to women entrepreneurs – there are VCs out there who will fund you. My biggest takeaway – look for a history of funding women. If someone has been a VC for 10 years and has never funded a woman, chances are they will not fund you. If a VC firm cannot speak of women entrepreneurs they have supported, take that as a sign and move on. If you find out that they have replaced their women founders as CEO’s, take that as a sign and move on.

In looking for funding for SlideShare, there were a few VCs who I knew after one meeting – that they would never fund a woman. In looking back, what was common to these VCs? I don’t think they understood the leadership style of women. Women can have a different leadership style and if you don’t understand that style, it can be a blocker in funding women. I felt this time and again – they don’t how I operate, how I lead. I think they felt I was weak, when it was just a different style. I don’t think they were against women CEOs, rather it was the particular leadership style they did not want to fund.

This is something I know through my psychology background as well – men and women can have different leadership styles. Culturally, we are sensitized to identifying a male style as a leadership style. And VCs in particular, seem to most understand leadership styles of 22 year old, male Stanford students (yes, I am stereotyping here :-)).

Having said that, I want to emphasize that overall I don’t feel discriminated against. I know that statistically speaking women have a lesser chance of getting funded. But I also have lots of male entrepreneurs friends – it can be hard for them as well. And some of the stylistic biases can operate against them as well.

Women Entrepreneurs: there are VCs out there who do fund women. Look for them. Look for a history of funding women. The best way to predict the future, is to look at the past. Ask them for a list of women entrepreneurs they have funded.