As much as I deeply respect Reid Hoffman, I feel his call for VCs to take a “Decency Pledge” completely misses the point about sexism in venture capital. The venture capital industry is one of the few industries in the world where the number of its senior women decision-makers declined over the last decade. That’s right. Declined. Today less than 7% of partners in venture firms are women.
The headlines of the last couple of weeks have simply highlighted what happens when the number of women in an industry drops below a critical mass. Investors turn a blind eye to the misogynistic behaviors of their CEOs and portfolio companies. VCs lose their own sense of decorum and are lewd, demeaning and predatory to women entrepreneurs and colleagues. And women and other minorities are the victims of a conscious and unconscious bias that drastically diminishes their fundraising prospects. So rather than working in an industry of inspiring innovation that dreams of the possibility of a brighter future, we find ourselves wading through a slimy cesspit of harassment, debasement and discrimination.
This is not who we are. This is not all we can be.
But the problem is that talk about venture’s sexism problem and talk about the lack of women in venture, is not in fact changing the ratio. Talk is becoming a substitute for action. If you are really serious about diversity in your firm and in our ecosystem, here are 7 practical ways you can help drive diversity this year.
1. Hire. More. Women.
I know. Stupidly simple. But at the end of the day, this is the only way to fix the problem. If you are one of those firms that have only a handful of women, having diversity in your firm is almost a responsibility to your investors. The next decade or so will be marked by ever accelerating shifts in technology and consumer behaviors. And even if venture barely has any women decision-makers, in other industries the buyers for your portfolio’s products are increasingly women. To assess how a product, marketing strategy or sales approach will appeal to these buyers you are going to need the opinions of both genders around the table; a diverse set of eyes looking at the same problem.
If you don’t know the right women investors to draw into your firm, resources like Parity Partners specifically tackle this problem and will not give up until you find the right woman (or better – women) for your team.
2. Set a Diversity Goal
Only firms who set short and mid-term goals around diversity, are serious about the issue. The rest aren’t.
If you are currently an all-male firm, your diversity goal may initially be modest. Here are some examples:
- to get to 20% women investors within 18 months
- to ensure the next 3 investor hires are women
- to have at least one female GP when you go out to raise your next fund
- to accelerate the development and promotion of 2 women associates
At AlphaPrime, we have a strict 50/50 gender policy. I’m not going to lie: this can be a minor inconvenience at times. Recently we decided to expand our bench of venture partners. Within 10 minutes, we had identified 6 great male candidates in our sector. It took about a week of telephone calls and unconventional thinking to identify the same number of exceptional women candidates. In the end, we’ll have no problem bringing on equal numbers of both. Like I said – a minor inconvenience - but not an insurmountable one.
3. Amplify Women’s Voices
The Washington Post first reported that women in the Obama’s Administration were using a simple rhetorical technique to reinforce points made by other women. When a woman made a good point, another woman would repeat it, and give credit to the originator. This technique is called “amplification” and makes the idea harder to ignore or to steal credit for. The only tweak I suggest is that men and women should both amplify the voices of women.
Social media makes it easier than ever before for us to amplify the voices of women VCs from other firms. I have a list on Twitter of “womenVCs” and on a daily basis I trawl the and retweet woman VCs sage advice or observations. Feel free to use my list (@claudiaiannazzo) or create your own.
4. Host an Access Dinner
Last year Beezer Clarkson from Sapphire Ventures, and Ed Zimmerman from Lowenstein Sandler hosted an incredible dinner. They invited women GPs who were fundraising and sat them next to institutional investors who were seeking new manager relationships. After the dinner, they also shared the contact details of all the attendees. It was an extraordinary act of kindness: providing access to investors who are often incredibly difficult to get their attention. It was also an incredibly shrewd move: both hosts were rightly etched in the minds of their future co-investors and clients as having a genuine commitment to diversity and simply being “good people”, the kind we all want to deal with in the future.
Host a similar dinner or invite women VCs to your AGM with limited partners. Or simply introduce them to other fund investors. The kindness will come back to you with interest.
5. Share the Stage: the Panel Pledge
A number of investors are increasingly taking the panel pledge. Not only do these investors refuse to sit on panels that only have men, but they proactively suggest to panel organizers qualified, exceptional women who could add some balance to the panel. This diversity rounds out the discussion, but also highlights the role models to more junior women in the industry, giving them a visible reminder that it is possible to get to the top of the industry. A shout out to Evan Nisselson of LDV Capital who ensures that 50% of the speakers at his annual Vision Summit are women.
6. Share the Column: the Column Pledge
Same issue as the panel pledge. Make it a condition of being quoted on record, that the journalist also quotes at least one other woman from the industry. From reading ReCode, TechCrunch, New York Times, Washington Post and many others, I’m not aware of any VC taking this approach. I’m not aware of any journalist taking this approach either. Come forward and be the first.
7. Support Women’s Development
If you do have women in your ranks, make sure you keep them. The best way is to develop them. On-the-job training is always the best path but for the trickier training - how to build your personal brand, how to build a specialist network, how to resolve office conflicts, time management etc - consider sponsoring your staff member to the P3 Program. The P3 Program is a 12 month professional development course for women in financial services, delivered by some of the biggest names in the finance world.
For those of you who invest in funds – if the firms you are investing in cannot demonstrate at least half of the items on this list, they are paying lip-service (at best) to diversity. Ultimately, as the landscape changes, these homogenous firms will be disadvantaged in accessing and assessing the new era of investment opportunities. Eventually this is going to translate to poor returns to you and your own stakeholders. By investing in funds that don’t make meaningful diversity steps, not only are you complicit in their behavior, but you may eventually be harming your own financial interests as well.
On the face of it, Reid’s “Decency Pledge” (not to be a sleaze-bag, to call out the bad behavior of sleaze-bags, and not to do business with them either) sounds like a good idea. But the problem is firms sign up to it, then pat themselves on the back that they’ve been “good guys”, and done all that is required. Unfortunately, other than a couple of insanely inappropriate comments perhaps not being made in public, nothing meaningfully changes. It’s not the vocabulary of the industry that’s the problem. It’s the gender of the industry.
Instead, we should be calling for a Diversity Pledge: where a firm commits to having 50/50 parity at its most senior levels within a certain number of years. AlphaPrime has already made this pledge which is core to our firm values. What’s your target?
We all need to move beyond talking and into action.
About the Author
Claudia Iannazzo (@claudiaiannazzo) is a managing partner and co-founder of AlphaPrime Ventures, a New York based venture capital firm investing in technologies that protect people and assets. Claudia has been investing in and working with technology companies for over 20 years, and has facilitated more than $10 billion of acquisitions, divestments, IPOs, investments, alliances and partnerships for public companies and new ventures around the globe.
Since starting her first company in compliance management while at University, Claudia’s career has spanned 5 continents, working on a broad range of safety and security initiatives, ranging from patrol boats in Vietnam, to remote location logistics, to NATO and other defense programs as Head of Commercial for the Weapons Systems division of BAE Systems. She has also been a commercial executive with numerous multinational companies, including Infosys Technologies, Tabcorp Holdings and Fosters Group.
Today, Claudia lives in New York with husband, daughter and two dogs, and spends her days investing in the next generation of innovations that keep her family, friends and city safer from emerging threats. Claudia is also a co-founder and Board member of Parity Partners, an organization driving diversity and inclusive leadership in the investment industry.