Women receive a sliver of the venture capital dollars that go to men. The sexual harassment scandal shaking Silicon Valley offers a new explanation.
SAN FRANCISCO —When Jen O'Neal was
raising money for her travel start-up two years ago, she was invited
to pitch to all the partners and associates at a prominent Silicon
Valley venture capital firm.
The
conference table was huge and the slides for her presentation were
projected onto a massive screen. As she began to address the room, she
glanced around. Four women, none of them investing partners, were all
squeezed into small chairs against the side wall.
"I
don't think I fully appreciated the expression 'to have a seat at the
table' until that day," says O'Neal, CEO of Tripping.com, which crawls
the Web for vacation property and home-sharing listings and has raised
$55 million in venture capital.
Yet that's the
reality in Silicon Valley, where men control the power and the purse:
Very few women get a seat on either side of the table.
Industry studies for
years have documented the sizable gender gap in funding start-ups. The
common explanation for women raising a sliver of the financing essential
to the growth of Facebook, Google and Uber is that venture capitalists
tend to back entrepreneurs who have succeeded before or who fit a
certain mold. Think Mark Zuckerberg or Larry Page: Young and geeky,
white or Asian male, often in jeans and T-shirt, who dreamed up an idea
while banging out the code in a dorm room or garage.
In recent weeks, another explanation has emerged: A pattern of suggestive remarks and sexual propositions, casual misogyny, groping and assaults that is too often a part of the capital-raising process for women.
Women have come forward
to describe the sexual advances that come with negotiating financing,
jobs and partnerships — and retaliation, such as an abrupt end to the
business conversation if they rebuff a sexual come-on. They
recall interviews with investors that quickly show they’re not taken
seriously, or situations that make clear they’re outsiders who need to
prove themselves far more than men do.
Hanna
Aase, founder and CEO of video-profile platform Wonderloop, recalls
sessions pitching investors for capital that often resulted in
more pick-up lines than term sheets.
"The second
question I get after 'What do you do?' is 'What do you do for fun?'" she
says. "The third investor question: 'Do you like being called Hannah
Montana?'"
Some women have thrown up their
hands, frustrated by years of pitches that go nowhere or quickly segue
into invitations for a late-night drink. A small but growing number of
women are forming women-only investment networks, or raising starter
capital in other ways.
With venture capital's big
money bro-culture behavior coming to light, there’s a new fear, mingled
with the relief: That, in reaction, male financiers will avoid women
founders altogether. There’s talk of some men following the "Mike Pence rule," referring to the vice president's comment years ago that he does not eat alone with any women other than his wife.
Lisa
Curtis, founder and CEO of food start-up Kuli Kuli, says she has
already heard of investors canceling meetings with female founders and
she's worried. "I think that's the wrong reaction," Curtis says.
Gaining
access to the capital, counsel and contacts they need to turn a big
idea into the next big thing is already tough enough, women say.
When Tripping.com’s O'Neal
walks into the room, she says she's usually the only woman in it. In
hundreds of pitch meetings, she has only ever encountered a handful of
female venture capitalists.
Chrissa McFarlane,
founder and CEO of Atlanta-based start-up Patientory.com, which uses
blockchain to secure digital health records, says when she was trying to
raise seed money in Silicon Valley, she was the only
African-American woman — and the only African American period — anywhere
in sight. She says she's sure she would have had more luck landing an
investment had she been a white or Asian man in a hoodie.
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