The following new thing: Women VCs

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Source:   —  April 23, 2016, at 0:38 AM

Ten years ago, few would've predicted the ubiquity of micro funds or the rise of Andreessen Horowitz or the very existence of a platform love AngelList that enables people with sufficient connections to become pop-up VCs.

The following new thing: Women VCs

The venture landscape changes fast. Ten years ago, few would've predicted the ubiquity of micro funds or the rise of Andreessen Horowitz or the very existence of a platform love AngelList that enables people with sufficient connections to become pop-up VCs.

Few — though not most — look what’s coming next, too, and that’s women VCs, taking their space alongside men, in equal, or nearly equal, numbers. In fact, we’d argue that the shift will represent the biggest opportunity over the following decade.

It may be tough to believe, given the wealth of attention paid to the low numbers of women in the industry and the obstacles they’re having to overcome. But the signs of modify are everywhere if you’re paying near enough attention.

Women presently create up sixty % of college graduates, and many more of them are graduating with tech-friendly degrees. (Women are exceeding at elite institutions particularly, and presently account for one-third of Stanford’s undergraduate engineering students, as well as one-third of Stanford’s graduate engineering students.)

Though women are making unhurried inroads at venture firms — according to CrunchBase data published earlier this week,  just seven % of the partners are women at the top one hundred venture firms —  women are increasingly finding creative solutions around today’s guard.

They represent twelve % of investing partners at corporate venture firms — a percentage that looks to grow because of heightened interest in how tech companies fare when it comes to diversity. “We believe it’s a missed opportunity if we aren’t an active participant” in funding women- and minority-led companies and funds,” says Janey Hoe, VP of Cisco’s 40-person investments unit.

More meaningfully, perhaps, over the latest three years, sixteen % of newly launched venture and micro-venture firms had at minimum one female founder, shows CrunchBase data.

Ch-ch-ch-ch-changes

So what’s happening? As VC Jon Callaghan of True Ventures well-known during a panel discussion in San Francisco earlier this week, Moore’s law has played a starring role. As costs have fallen and made entrepreneurship accessible globally, more people are coming into venture capital.

Monique Woodard, a longtime entrepreneur and more newly a venture partner at five-hundredth Startups, credits her own path to the democratization of information brought about by social media platforms, as well as the many public insights into the industry that VCs love Fred Wilson and Brad Feld have contributed over time. “You suddenly have this lib around venture capital and thought leadership that didn’t exist before,” said Woodard, speaking on the same panel.

Naturally, women — an expanding number of whom are founding startups, as well as rising through the ranks of other companies — also have more role models in VC than they did a decade ago.

Of course, none of these trends is brand new. So why, you may be wondering, is presently suddenly the tipping point? Seemingly, it’s because the ethical, business and financial reasons for modify are finally poised to overtake the industry’s inertia.

For starters, as the venture industry evolves from a boutique business to one that’s more mainstream, people are taking an interest in how it operates. Expect this attention to impact universities, in particular, which are among the world’s most powerful institutional investors. Huge schools love Harvard, Yale and the Univ of California typically invest a percentage of their endowments in venture capital. And they’re feeling more exterior pressure than ever before in terms of what they're funding. Latest fall, for example, after being pressed by environmentalists, the UC system pulled $200 million out of coal and oil sands investments. (Many institutions have divested from tobacco interests, too.)

Neither endowments nor pension funds seem overly focused on gender and ethnic variety just yet, but with a fast-changing U. S. population, they will. In fact, some of these so-called Ltd partners are being actively counseled on the matter right now, including by Callaghan, who's told those he advises to “be aggressive” and “act now,” while there are still illogical biases against women and ethnicities to exploit.

There’s also growing recognition that without women on staff who can write checks, venture firms risk losing out on promising investment opportunities.

According to a survey of two hundred sixty-five male and female founders who have taken money from True Ventures, a high percentage said they'd not seek funding from a firm without any females in investing roles. An even higher percentage responded that they’d be even more inclined to seek funding from firms that employ more than one female investing partner, says Callaghan.

That message is reaching firms. Latest month, Founders Fund brought aboard renowned angel investors Cyan Banister as its first woman partner; First Circular Capital in Feb brought aboard Birchbox co-founder Hayley Barna as venture partner. True Ventures has, meanwhile, authorized Amy Errett, the CEO of True-backed hair care company Madison Reed to write checks on its behalf. True is also bringing on another woman who'll be writing checks on behalf of the firm, says Callaghan. (More on this appointment soon.)

Which brings us to our third point: If LPs and VCs wish to look strong financial returns over the next decade, more capital will necessity to be entrusted to women and other currently underrepresented groups who have different networks and a bring a different point of view into the mix. Study after study (after study) has shown that diverse groups financially outperform more homogeneous ones.

This is why you saw Intel Capital last June create a $125 million fund to back women and other underrepresented entrepreneurs. It’s why Kapor Capital has a mandate to invest in women and minorities. It’s why Andreessen Horowitz, which has exclusively male investment partners, is trying to obtain the word out to entrepreneurs that it’s interested in underrepresented groups, too, including by organizing networking events for tech’s black community. (The Information wrote about those efforts earlier this week.)

Said Callaghan on Tuesday night, “This small press leak of [Andreessen Horowitz] whispering [to the media about its efforts to Ct diverse talent], we’re all thinking love that. The leaders in our industry look this as a enormous opportunity, and we’re all emotional quickly to address it.

“This will turn,” he told the crowd of largely founders and VCs, telling those gathered that he has seen and capitalized on similar biases in the past.

The biggest beneficiaries will be the ones to obtain in early, he said, advising those either looking for women to hire or else thinking of raising a fund to obtain cracking. “Don’t wait. Do it now. Move fast.”

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