Sex and the successful entrepreneur
I recently sent out a press release from Keiretsu Forum about being the most active early stage investment group in the world (which we are - Yeah!). As a result, I got an interesting response from one of the CEOs who had earlier presented at Angel to Exit. Here is part of the exchange:
Just a question, how many of your KF Angel investor members are women, and what % of the total is this?
I don't know. As far as I am aware they do not track sex of members, however, I am pretty sure in the US more male than female.
... How many women entrepreneur projects has the forum funded, as compared to male startups?
Again I don't know - but you can look into the companies by looking at their portfolios.
My portfolio of current advisory boards (not total investments - which I track at end of quarters) is 5 male CEO, 1 female CEO.
My current proposed new company portfolio is 3 female 2 male.
My current workshops are 2 male, 1 female.
Advisors are also skewed male. Mostly because they show up more often in every part of the sieve.
The largest female AB membership in the last year for A2E was 2 female, 3 male (including me).
I'm trying to get one now that is female CEO, female co-founder - and I have proposed 2-3 female advisors - likely me and one male as well - but she is hard to close - currently pending internal legal review and interview of the advisors.
I have been waiting to add you to the portfolio for some time, but again, slow to close.
On Tuesday we had 2 female CEO presenters and 5 male. Both females are candidates for advisory boards - we are meeting with them next week.
3 males also made that condition.
For next month we currently have 3 male and 1 female presenter signed up - 2-3 more to go for next month's session.
I'm just curious as I came a cross a statistic the other day that reported of the 1% of startups that receive VC funding, only 2-6% are women startups.
Sounds about right on average.
I think Keiretsu Forum does better and I know we do.
Did you also read the statistic that female founders tend to be more likely to succeed?
Wondering if there's a similar, or ideally better, statistic for Angel investment, and in particular, your chapter?
My chapter is close to 50-50 but too small to count statistically.
Some more numbers:
If you have read my other articles and watched my videos, you know I prefer to find the facts and go by the numbers. So I looked up the things I could readily find. Here are the facts as I found them and responded:
My (A2E) portfolio (CEOs) looks like this (as of 4Q 2018)
Both (partners): 1
This is one of the many reasons I favor female entrepreneurs as investments, subject to them being good at what they do and passing due diligence.
I also looked at global companies presenting in December to Keiretsu Forum (based on first names only - 50% I couldn't tell):
These are the best numbers I can get you at this point.
Join A2E and improve our numbers?!
Is this good or bad?
I don't actually know. Drawing conclusions about such things seems to me to be a bit problematic. It's certainly good not to be ridiculously one sided, but on the other hand, I find no compelling reason to believe we should do anything differently in this regard.
I don't speak for Keiretsu Forum writ large, but as a member and now chapter president, I was recruited by a woman and a man and trained by a woman who built the international programs worldwide. When I deal with the Northwest, Los Angeles, London, etc. chapters around the world, I deal with their female presidents. When I deal with the male chapter presidents, I deal with them in the same way. I deal with the woman who co-heads the health investment committee when I want information in that arena, and I talk to one of the men on the real estate committee when I want to understand real estate investment issues.
In many cases I don't know the sex of presenters by their names, and the initial screening processes are done by women in my Keiretsu Forum region. So by the time I find out the sex of presenters, they are usually presenting.
The first investment I made after joining Keiretsu Forum was in a woman-led business, and she is fantastic as a CEO. I think we will have an exit in the next few years and I have all confidence that she will get a great value for me and all of her other investors.
At the same time, it is impossible to not see the obvious male bias in the investment world in general and private equity in particular. Numbers don't lie, even if people can lie with them.
From what I have seen, Keiretsu Forum has more men than women, but many leadership roles are taken by women. I have never heard (or understood if I heard) anyone say anything related to sex in making an investment decision in that forum or discussing a presenter during mindshare (when the presenter is out of the room).
However, there is certainly an inherent bias in the words people use in our society, and I appreciate people pointing it out when present. I personally try to use they instead of he or she when no explicit sex is involved, but I am often told this is poor English.
It's a matter of process
From the perspective of Angel to Exit, which I do speak for, the question of the sex of an entrepreneur is simply irrelevant. We don't ask, we don't look at the names of the presenters before making decisions to invite (or not), the evaluation forms we use don't address this question, and in many cases the names are from cultures and languages where I don't know how to differentiate male from female names.
I think we have an advantage in this regard because we operate live online remote. We use recordings wherever reasonable, have standard documentation, well-defined processes, etc. And all of these are, as far as I am aware, gender neutral. I think the remote nature of things takes focus away from personal appearance, physical appeal, and related matters, and puts focus on what is said, how it is presented, supporting documentation, and how questions are answered. Nobody can behave badly in secret in the fora we provide because, for the most part, everything is seen by everyone. I cannot speak for what others may privately chat about of course, and I don't know what people do out of band. But in band, it's hard to get away with it, and we will not tolerate it. I will happily terminate your connection in real time if I see you cross the line.
I am a systematic type of person. It is one of my greatest failings and greatest strengths. I believe in strong process for repeatable performance and measurement and adaptation based on those measurements. I believe that our processes are designed to make us efficient at finding viable companies and helping grow them. The numbers I see (and have shown you) favor female CEOs over male CEOs, but only when I look at them through that lens. They also favor harder working CEOs with more in-depth knowledge of their field and industry, good education, adaptability, willingness to listen to other views without getting upset, ability to build teams and manage them, etc. None of these have anything to do with sex in my experience.
I don't particularly seek to compensate for the biased realities of the world by my practices, and even if I did, it wouldn't help the bigger picture. Angel to Exit is too small to matter on a statistical basis. But I do think transparency is important and thus we provide the numbers we have or can find.
If you want our numbers to change one direction or another, there is one sure way to do it. Show up.
I welcome and invite female CEOs, advisors, and investors. If you are having problems elsewhere, join us. Bring fabulous business opportunities, assistance for them, and funds to support them, and help us help grow companies. Make us wealthy, make yourselves wealthy, and let the idiots who put your sex above their success fail in the marketplace!
Within hours of sending out the announcement for this article, the following interesting things took place:
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