Anna Garcia On VC Access For Female Entrepreneurs
What can be done to increase venture capital access for female entrepreneurs?
That’s a topic that’s very near and dear to my heart. I’ve worked in very male-dominated environments my whole career. A bond trading floor, as you can imagine, is not heavily populated with female professionals. Venture capital is actually not that different.
In the technology startup world, there’s a lot of conversation around the topic of how few female entrepreneurs get funded compared to male entrepreneurs. That has been an unfortunate statistic for a long time, and there’s a lot of frustration out there. But, some good things have come of that.
For instance, we see new pockets of capital appearing. These can be anything from a small angel group with a mission to support diverse founders and gender-balanced teams, to very large capital pools like Goldman Sachs announcing they’re invest $500 million in female entrepreneurs.
Those are all terrific new endeavors, and over time hopefully will see meaningful impact from that. But this is just the beginning. We’re still not there yet. It’s going to take a while for that capital to cycle through, and for success to be proven and shown. But what’s interesting about those initiatives is that, most of them are happening outside the traditional venture capital community. In venture itself — at the investor, general partner level — there are similar statistics on how few female entrepreneurs get funded.
The reason the traditional venture capital needs to change in order for this to all work together and produce meaningful impact is that entrepreneurs don’t just need capital when they first start out and want someone to just believe in their idea. Entrepreneurs continue to need capital to grow and scale. So while it’s great that they will get support from outside traditional venture investment pools, but as they grow up, they will need to go back to traditional VC for additional capital.
That’s where I think the disconnect lies. There are not a lot of female investors or diverse investors in the VC community, which ensures this disconnect will continue. And if we do increase the percentage of female VCs, it increases the diversity of viewpoints, but it doesn’t automatically translate into the same percentage or better in funding to female entrepreneurs. But it certainly increases the approachability of teams, which is a piece to the puzzle.
One thing I’ve observed as a female VC is that end investors are not prioritizing diverse investment teams. And I would love to see that change. It’s like how we vote with our dollars when we buy a product in the store — we support that brand, we support that company that is doing something right, and we want them to continue doing that. I think the beginnings of that happened when I was still on Wall Street, when some clients said they wanted to only give business to firms who had senior women on the coverage team. That became a criteria.
I would love to see more of that happen in the venture industry, because we can make a big difference putting this conversation together around we can create greater balance across genders, and diverse founders in capital flows. I think if limited partners that invest in venture funds said, “We want to make sure your team is diverse,” that would be very powerful.
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