Invest in Women, Everybody Wins!

25th August 2015

Let’s be honest, women have made some serious strides in the workplace. As a matter of fact, women are running nearly 50% of all businesses in the United States. But even with that statistic, businesses with all male teams are four times more likely to receive funding from venture capital investors. There is a serious problem with our investment engine if it continues to keep half of their bench on the sidelines.

If Chip Kelly or whoever runs the Denver Broncos decided to only play half their team, how long do you think they’d stay as head coach?

This topic was the feature of one of the most riveting talks of the first day of COIN 2015 Summit – Invest in Women, Everybody Wins, given by Loretta McCarthy, Managing Partner of Golden Seeds, an early-stage venture capital fund that invests in women-owned businesses, as well as champions women’s place in the investment community.

“In 2004, women made up about 5% of the angel investors in the United States,” said McCarthy. “Today they make up approximately 26%. Meaning there’s 80,000 women who are angel investors.”

Don’t say we didn’t tell you, this is starting to become a movement.

There’s even been an increase in the amount of men who will fund women-led startups, being fondly referred to as Golden Dudes. And there need to be more of them. The more men can take a stand and show that not investing women isn’t just simple minded, but bad business sense, the faster this movement will grow.

And women have had a lot of help over the past 4-5 years due to the tremendous growth of seed accelerators that have sprung up across the country. Now there are well over 100 across the US, and they do an incredible job of keeping their workforce local, and keeping capital and job security nearby.

Yet, women continue to face funding challenges and myriad other obstacles when it comes to scaling their business. And then, having run out of options, they’re forced to turn to overseas funding pools or family offices that to often do not invest the proper time, energy, or money, into their seed companies.

“From 2011 to 2013, less than 3% of venture capital funded companies had female CEOs. And 85% of the companies that were funded had no women executives on their teams,” said McCarthy.

So maybe it’s more than gender diversity in the startup company. We need more diversity in the venture capital firms funding startups. In fact, VC firms with women partners are 2.5 times more likely to invest in a women-owned company.

Investment is all ones and zeros. Black and red. Balance sheets and EBITA. Yet for some reason investment leaders are ignoring the obvious truth that the numbers are clearly pointing towards: spending money on women in the investment community will not only pay dividends, but almost double the investment landscape.

If you handed me that term sheet, I’d sign it every day and twice on Sunday’s. The simple truth is, if you invest in women, everybody wins.

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  1. innovatorspeak posted this