Slashdot Mirror
Having a Woman On Your Team Ruins Your Chances For VC Funding (theoutline.com)
Laura June, writing for The Outline: It's a well-known, well-documented fact that women entrepreneurs face an uphill battle in the fight to get funding for their businesses. But a new study suggests that it can actually be almost impossible. According to the study, published Tuesday in the journal Venture Capital, having even one woman on a company's team makes them far less likely to get funding than an entirely male one. In fact, an all male team is about four times more likely to get funding than teams with any women on them. The study was done by researchers at Babson College and Wellesley, and looked at data on 6,793 companies funded between 2011 and 2013. This is the first large-scale study in a decade to focus on women's efforts to get funding, and it's not encouraging. The authors write, "We did not determine any significant performance differences between companies with women CEOs from companies with men CEOs, so it is quite surprising that women are still, practically speaking, shut out of the market for venture capital funding, both as CEOs and participants of executive teams."
The implication that all VCs are sexist-driven rather than profit-driven is a bit perplexing. These are the people that are like the Iron Bank from GoT. They probably don't even see the people for who they are, rather than just seeing us all as numbers, except possibly the one that claims to be the CEO for sheer viability.
I have only read through the paper's methodology section and conclusion so far, but it appears they didn't look at the total number of pitches by companies with at least one woman founder. They only looked at companies which did receive funding. Their study therefore says nothing about whether women on your founding team has anything to do with whether you will get funding. It just says there are less women founders.
This isn't just a case of the article having a misleading title. The study itself makes conclusions it cannot back up.
-- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
They only used companies that got funding and ignored the composition of companies that requested funding but never got it.
Based on that you might as well say this study shows that companies with a women in lead position comes up worse ideas then a team of all men.
When TV cameras are tripping all over themselves to put women who scream about workplace sexual harassment in front of the lens, then what did you think was going to happen? Venture capitalists aren't stupid. The easiest way to avoid having to put out a public relations fire is to remove the kindling from the equation entirely.
Misleading summary and conclusion from a website that with a subtitle of, "Did we ban men yet."
Direct quote from the study:
The average dollar investment in businesses with a woman on the management team was slightly higher for all three years during 2011â"2013, $12 million for those with women, $8 million for those with no women.
Please stop posting BS gender issues on slashdot once and for all... It's not tech news, it's not nerd news, it's not news you want to hear, it's not even a news... It's just BS.
There is about 96% male CEOs so their companies gets about the same percentage of the funding. WHAT A SURPRISE...
And don't tell me somebody in western countries is forbidding women to create their own businesses or denying funding for good businesses, because it was woman's idea...
Can we please get some good submissions on the front page today?
This one is pretty much just political, meant to agitate leftists and get them to post a lot of angry comments about "sexism".
The one before this one was about transsexuals in the US military. Again, it was meant to agitate leftists and get them to post a lot of angry comments about "transphobia".
The one before that one was about Americans avoiding vaccines. Yet again, it was meant to agitate leftists and get them to post a lot of angry comments about "anti-vaxxers".
I know, I know. Some will claim it's done to generate controversy, which generates page loads, which generates ad views. That argument never made sense to me, as most of us here are probably smart enough to block ads outright, or if some embedded ones do slip through, we just ignore them.
Can we have relevant articles on the front page, please? Ones having to do with science, technology, math, computing, electronics, and stuff like that which we can't get from other news sources?
Can we not be subjected to these petty identity politics? If we wanted to argue about "sexism" or "transphobia" or "anti-vaxxers" we could just go to a site like Huffington Post or Reddit.
There are lots of good Firehose submissions about truly interesting topics that don't involve -isms or -phobias or identity politics. Editors, let's get some of those on the Slashdot front page, ok?
We come here to discuss open source software, programming languages, Linux, tinkering with electronics, and to learn about new scientific discoveries. We don't come here for leftist identity politics.
The opposite should be true. After all, the "woman are wonderful effect" is very well known. Both men and woman have an unconscious pro-bias towards woman as well. Ranging from social to material interests. But you can look all over society and find cases where this isn't true because of the problems it brings.
And those problems? You can thank false allegations, socjus, fake sexual harassment, cases like this or Ellen Pao and the ability of a woman to destroy your career and life over a false claim. I'll bet that nearly every person that reads this comment and is currently working in a corporate environment of some kind has seen the shift where men leave doors open, or have one or more individuals in the same room with them when talking to a woman. There's a reason for it.
And it's to the point where that even if proven false in the court of law that a man's choices are commit suicide or try to work through it, by picking up and moving to another part of the world to try and start over. It's not worth the trouble, and this is a result of people trying to limit and protect themselves from a potential fallout. I'm sure someone is going to bring up a "but it really doesn't destroy them..." No? Find anyone who's been the subject of a false claim, and you'll find a person who's lost friends, family, career, connections, and are ostracized even when innocent, the person recanted, or was dismissed by the courts with prejudice against the accuser.
Om, nomnomnom...
But this sounds like it could violate the Rust Code of Conduct. If they aren't careful then the Rust Moderation Team may come after them to teach them about tolerance and acceptance.
This isn't an unheard of problem. The 1980's TV series, Remington Steele, explained the situation in the intro for each episode: Laura Holt (Stephanie Zimbalist) opens a private investigation agency, gets no business as a woman, and renames the agency with a fictional male owner who is always unavailable. Until a jewel thief steps into the role (Pierce Bronsan), but that's a different problem.
I looked at the other "articles" from that website.
It has golden nuggets like this " For as long as America has existed, its criminal justice system has maintained the supremacy of white people. "
I must admit that I choose to skip the "placenta osso buco" article.
Why do you keep linking to garbage sites like that, what the fuck is wrong with you?
VCs might like to know they likely have a blind spot when it comes to good investments. They might also like knowing that their fellow investors likely are undervaluing some companies based on entirely illogical criteria. As TFS notes, performance wise outside of VC funding, there's no difference. There are probably VCs who are only interested in investing in companies run by dudes, but I'm guessing there are probably some VCs who are more interested in making money than maintaining a gender imbalance.
If VCs don't care about making wise decisions with their money, they can. Looks to me like no one is suggesting otherwise. I don't think anyone is suggesting they shouldn't be able to put their balls in a blender either. It's their genitals and they can do with them what they want. Definitely.
It should be avoided anyway.
People are already talking about correlation etc, but the study tells a different story than the slashdot summary. The study shows that companies with woman on the executive team were 15% of all companies in the sample (Table 1 and 2). It also shows that companies with woman on the executive team made 25% of total funding dollars across all industries (Table 5). It also shows that companies with woman on the executive team received an average valuation of $73 million those without woman received only $49 million (Table 8). In fact the only fact supporting the summary was that companies with woman as CEOs received a valuation of $40 million investment versus male CEOs who had $54 million on average. It is important to note there were only 119 companies with woman as CEOs while there were 3554 with males CEOs, a much larger sample. Obviously each individual company with a woman CEO effects the average valuation greater for their sex and you can decide for yourself if that makes the number less relevant or a good measure.
More likely VCs do not respond to women's business plans or sales pitches, for whatever reason, real or perceived. We're talking about VCs, most of what they see, hear and act on is some degree of fantasy or another. Even successful investments morph over time from the pitch to the reality.
To get their money you have to appeal to some part of their lizard brain that makes them want to part with their cash, a combination of rationalization and vision. It's very likely that as they are mostly men, other men are able to identify with them and close the deal, whereas women are not.
I don't know what you do about that, and particularly wherein this is private money, there's nothing in the US that can (or imo should be) legally done about it. A lot of how the world is is based on personalities of rich people. Short of changing that, it is what it is.
Or maybe VC's know something about female-led businesses that the rest of us don't want to accept.
Posting as AC because of insanely politically incorrect opinion.
Fact: women are just as good in the business as men
Fact: women are just as good in engineering as men
Fact: women are just as good in entrepreneurship as men
But also, unfortunately:
Fact: women present a higher risk to VC funding than men.
Why? Male entrepreneurs don't get pregnant. Male entrepreneurs will 99.9% of the time not ask for parental leave. Male entrepreneurs typically don't need to go home to pick up their sick child from school at 1pm (because they are supported by strong women at home).
It's simply the "traditional' household roles that make more sense to a VC funder. Is it fair? Big fat no. But is it reality? Hell yes. And you can have 20 marches on Market Street in SF, but that shit ain't going to change anytime soon.
And on a side note, if you really want to march in favor of women's rights on Market Street in SF, start with protesting against women's situations in the Middle East or Africa. They are far more worse than here in the U.S.
Cause it is.
Biased, post hoc ergo propter hoc nonsense.
They didn't do a comparison of probability for a company to get VC funding based on the presence of women.
They didn't compare companies which received VC funding vs. those that didn't.
They just took all the VC funded companies and counted ones with women listed on the company profile.
It's a literal post hoc condition for determination of likelihood of receiving VC funding.
As for bias... From the study:
The Global Entrepreneurship Monitor (GEM) reports that in 2013 approximately 13% of the working population of the United States was in the process of starting or running a new business - the rate for women was 11% compared with 16% for men (Kelley, Brush, Greene, and Y. Litovsky 2013 Kelley, D., C. Brush, P. Greene, and Y. Litovsky. 2013.
The Global Entrepreneurship Monitor Women's Report. Wellesley, MA: Babson College. [Google Scholar]). This means that one out of every 10 women in the United States was becoming an entrepreneur, which is a higher rate of female entrepreneurship than for any of the other 24 developed economies.
Disregarding the fact that they are confusing "one out of every 10 women in the United States" with 11% OF the 13% OF the working population... in the process of starting or running a NEW business.
People who write biased crap can't do math. Big surprise there.
But their criteria for VC funding female teams is "a single female on the team".
In other words, their sample will look a LOT like that 11% mentioned in the cited study, as it doesn't discriminate between the teams with a single woman, teams with more women or teams with one or more women starting or running a business which is not new, but only seeking VC funding for the first time.
Cause they are going out of their way to find a proof of "women being bad luck on the ship".
Number of VC funded companies, according to the study, with at least one women on the company profile in that same year (2013)? 18%.
2012 - 13%.
2011 - 9%
I.e. Percentage of companies with women on the team receiving VC funding is actually higher than the percentage of women in the process of starting or running a new business.
It's even higher than the percentage of ALL population starting or running a new business.
Only thing they got right is that there are MORE COMPANIES WITH WOMEN.
But that's not the idea they want to get behind.
See... there's this patriarchy thing...
Mit der Dummheit kämpfen Götter selbst vergebens
"Fact: women present a higher risk to VC funding than men.
Why? Male entrepreneurs don't get pregnant. Male entrepreneurs will 99.9% of the time not ask for parental leave. Male entrepreneurs typically don't need to go home to pick up their sick child from school at 1pm (because they are supported by strong women at home)."
You are conflating work/personal issues suffered by the workforce at large with issues suffered by female executives.
1) Female entrepreneurs generally can afford a nanny.
2) If a female entrepreneur is on a startup's management team, don't you think there's an internal commitment to see it through?
3) Men may not have family life commitments (which is a statement I firmly disagree with, but I am accepting as a premise for this debate), but they have their own risks. They are far more likely to jump to a competitor for a bump in salary and/or control. This can be a risk on both ends of the jump. See recent lawsuits involving Oculus and Facebook/Zenimax.
We are the 198 proof..
Male entrepreneurs don't get pregnant. Male entrepreneurs will 99.9% of the time not ask for parental leave. Male entrepreneurs typically don't need to go home to pick up their sick child from school at 1pm (because they are supported by strong women at home).
Thing is, companies with women on the team had better outcomes on average. They made the investors more money. So if anything:
Fact: all-male groups present a higher risk to VC funding than mixed ones.
Why? I can only speculate, but maybe because all-male groups where only 0.1% are willing to take paternity leave and don't participate so much in family life tend to burn out make poor decisions more often. Good work/life balance, something more common in mixed groups, produces better overall results.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Actually I suspect most male entrepreneurs do not have children nor women in their lives so do nothing but work, then get drunk at the weekend, sleep it off, then go back to work.
I think what can be done is to educate people on what makes a good investment and what doesn't, and how we can be fooled. If we are conscious of it we can a least partially compensate. I don't think investors have some secret plan to keep women down. More likely it will be something about the way men present ideas that will attract them more. People frequently make unwise decisions based on form over substance. This probably a similar thing to something read recently saying we pick charismatic leaders over humble ones even though humble leader are generally better.
https://hbr.org/2017/04/if-hum...