I began my working career in the 80s in New York on Wall Street with a cohort of young analysts and associates. Our entering class split pretty evenly between women and men, one of whom eventually became my husband. But that is a story for another day, except to note he is the reason I now call Cleveland home and, by some convoluted use of the transitive property, why I spent the two days following the Tribe’s loss in mourning. Ah, but I digress.
Since the mid-1980s I have been both an investment banker and a venture capitalist. Both sectors are often described as “Boys Clubs” since there are so few women in senior leadership positions. When I started working, my fresh-out-of-college self didn’t think about glass ceilings or overt sexism in the workplace – I just assumed the smartest, most driven people would make their way to the top regardless. Who doesn’t want the most capable people running a firm? When I looked around and saw few, if any, women in senior roles, I just assumed my predecessors hadn’t found the work stimulating or enjoyable enough to stick with it. What I wasn’t fully aware of was the extent to which institutional norms and unintended biases conspire to leave women out. So much of “doing deals” and “making rain” comes from building relationships, and so much of building relationships is done in a social setting. Things like Friday golf outings and steak-and-steam nights are obvious examples that provide men with more opportunities to network and get to know senior managers on a social, personal level. We all know where this leads when promotion time comes around.
In the 15 years that I have been working in the venture capital industry, I have been equally shocked by how few women there are. It has actually gotten worse, not better, since I began in the early 2000s. And since venture investing is also very clubby, with deal flow coming from personal referrals, this naturally leads to fewer women having a chance to pitch VCs for funding. Increasing the number of women partners at VC firms should lead to an increase in allocations to female founders, but how long will that take? The spate of sexual harassment cases emanating from Silicon Valley will likely make it harder for those firms to recruit women as investing partners. And, I assume, women founders will avoid these firms, limiting even further the sources they can go to for funding.
While VC firms have been happy to remain male dominated and content with the deal flow they source from their existing bro-networks, women have been mobilizing, creating angel networks and small seed funds. A quick Google search brought up 25 different groups, some focused on teaching women how to invest, some with small ($5M and less) angel funds and a very small number (fewer than five) of traditional funds ($100M+) founded and run by women. While this is good news, most of these organizations are operating on the coasts, far away from Ohio. Others are trying to solve the problem using virtual communities. However, the fact remains that angel and seed stage investing are contact sports, best when there is a version of hand-to-hand combat, where investors enjoy a personal connection to the entrepreneurs they back and founders benefit greatly from having close access to their advisors.
Motivated by the swell of activity nationally, and wanting to fill a need here at home, I have been quietly mobilizing the women of Cleveland to invest in local female-led startups. We’re starting our own club, of sorts, with the goal of investing in high potential startups founded by women that will generate significant financial returns. We also provide a social setting where entrepreneurs and investors can make connections that might lead to business development (the “doing deals” and “making rain” part). So far it has been a grass roots effort, with me issuing a clarion call last year to about 50 female friends. Reminiscent of the 1980s commercial for Faberge Organics Shampoo, I asked each of my friends to tell two friends and so on and so on… The good news is that were getting traction; so far we’ve invested in two local, female-led startups (WISR and KOMAE) and there are more deals in the pipeline. I’ve taken the step of getting this club up and running, now we just need more members. If you are an accredited investor and are interested in learning more, please connect with me directly or leave a comment below. Who knows? We may just get lucky enough to find the next Rent the Runway, StitchFix or Spanx!