Gender Discrimination in Venture Capital

Is there gender discrimination in venture capital?  A lot of people say that there is.  In my neck of the woods here in Chicago, I haven’t seen it.  But, at the same time, I am not going to say it doesn’t happen. If someone says they have been discriminated against, you should take them seriously.  It doesn’t mean it happened, but there is a chance that it could have happened.

I only know what I know and I can only behave how I behave.

A little background on me.  I come from a family that had me and two sisters.  I was the oldest.  All my immediate first cousins on both sides of the family are female except for 1.  My mother’s family was two girls and a boy.  My wife and I have two daughters.

I think I been around and interacted with enough women to understand women.

Raising girls, my wife and I thought a lot about all the issues that are being talked about today.  Women have harder decisions to make earlier than men because of their biology.  The survival of our species depends on them. I don’t think that difference stops women because pregnancy and families can be managed.  You can choose both to be a mom, a wife, and an entrepreneur.  You can choose other paths too and no one should judge you for it.  My wife works for The Policy Circle. It’s an engaged organization that empowers women and gives them the tools to have a mind of their own.  What they do and how they engage is pretty cool and it is starting to have some results.

My wife and I made one really conscious choice when it came to our daughters.  We were never going to raise them as victims.  Instead, we taught them how to empower themselves.  One is applying to law school.  The other is charting her own entrepreneurial course in media production.

In the debate over discrimination in venture capital, I don’t see that empowerment philosophy shining through.  It’s mostly about victimhood or mea culpas.  That doesn’t do anything to help move the ball forward and actually might empower the people doing the discrimination.

I love powerful gritty women.  When they have a mind of their own and choose to accept the consequences of their decisions, they become really powerful.  When they empower themselves to decide for themselves, they rise above anything that’s circling in the world around them.

I also think that if men behave as gentlemen should, you won’t run afoul of anything and you won’t find yourself in a situation that could be misconstrued as harassment. My mother and father taught me to behave that way. In my role as an investor, I have tried never to cross the line and don’t think I ever have.

There can be gray areas. However, I don’t think there are as many as people think.  Simply behaving like a gentleman will put you over the top.  Sometimes you need hard and fast rules. In the military, they have a no fraternization policy for certain ranks, positions, and commands.  Sure, it gets broken, but it’s there.  As a firm, setting up some rules makes a lot of sense.

The one ethical dilemma I can think of off the top of my head is this.  Suppose a partner or an associate at a VC fund finds a woman lead deal. We are going to assume that the VC and the entrepreneur are unmarried.  He hits it off with the founder and is attracted to her. The way his fund is structured, he gets a spiff with extra carry or something like that for bringing the deal to the fund assuming the VC firm invests.  He loves the deal, and he thinks he might be able to build a lasting relationship outside of work with her.

He’s in a quandary. Does he pursue the relationship while pursuing the deal at the same time?  I mean, if you can find true love in your life it is one of the best things you can do for yourself.  You never know when it’s going to happen and sometimes that opportunity reveals itself to you at a most inopportune moment.   In a perfect world, he tells his VC partners about the deal and the budding relationship. They remove him from the deal, and still give him a spiff.   He doesn’t use his position to influence whether she gets money or not.

But, the world isn’t perfect. Maybe the firm gets greedy, or his partner gets greedy.  They don’t give him the spiff or carry and he loses a big payday plus credibility in the firm structure.  It’s easy to say, “the firm shouldn’t be like that and he should leave the firm”.  Maybe he can in the next fund, but raising your own fund is extremely difficult and would be made more difficult if he didn’t have a lot of credibility inside the firm he was with.

There are other examples.  The world is not finite.  This is one that just came off the top of my head.  Examples are no excuse for bad behavior, and we can’t game out every single instance in our lives.

Again, if the VC behaves like an ethical gentleman, there should be no quandary at all.

There will be some instances where someone cries discrimination or harassment, but the person on the opposite side didn’t actually behave that way at all.  It might be a simple misunderstanding or miscommunication.  Or in a worst case scenerio, a person might be doing it to get leverage or intentionally smear a person.

I know crappy stuff happens.  The time for it to end was long ago.  Women I know personally have experienced it.  It really bugs me to my core if when a man in a position of power uses it to get sexual “favors” from women purely because they are interested in exerting power over them.  The casting couch in Hollywood is a perfect example.  I know of stories where women tried to raise money and the male on the opposite side of the table asked for sex in return for a check.  My own wife was checking into a hotel with a superior back in the 80’s and when the hotel clerk asked how many he jokingly said, “One.”  That shit is not cool ever.

At the same time, men shouldn’t walk around with a guilt complex.  That’s not good either and hurts equality as much as harassment does.  When you have a guilt complex, you start to act out of fear.  People sense that.  You wind up making bad decisions.  Just don’t act like an ass and you will be okay.

My wife alerted me to a couple of articles that are interesting, to say the least.  The first appeared in Elle Magazine.  Sady Doyle wants to know how to label “problematic women”.  I chuckled when I read the phrase, problematic women.  I never see women who are fiercely independent as a problem.  The response from Kelsey Harkness is very powerful.

I think that Entrepreneurship is better when everyone participates.  I think that being an entrepreneur is a great idea for anyone who freely chooses to enter.  At the same time, it’s a tough business with its own risks and challenges.  Going into it with eyes wide open is a good idea.  There are no special preferences or carve outs for entrepreneurs.  They either win, or they fail.   They build a sustainable business, or they go out of business.  Their choices have consequences.

In your organization, it is smart to think about it.  My friend Anne Libby penned a post about ways to think about it.  She also wrote about how to structure feedback loops and other structures so each case is handled with the proper respect and decorum it needs to be handled with in order to get to the root of the problem and stamp them out if they are occuring.

The best I can do is lead by example.  Hyde Park Angels had a tremendous record of including women at the highest levels of leadership when I was involved.  Actions speak a lot louder than any virtue signaling.

When Kenny and I started West Loop Ventures we assumed we would see a parade of male entrepreneurs.  B2B Fin Tech is overwhelmingly male.  But, that doesn’t mean women can’t participate.  We have used female MBA students to do some work for us.

Our first check went to a woman lead company and we see some deal flow from women.  Do we give them a preference because of gender?  No.  We do the exact same stuff and ask the exact same questions that we do with every company.  When we invest, we are all in.  We want to empower that entrepreneur to build the biggest and best company they can.