Data. Money. Power. Cheerios. Change.

Welcome to She Invests, a monthly newsletter on women, money, and investing. This is newsletter #3! If you have not seen the first two yet, please click here and here. Thank you for reading and sharing. So far 11,553 subscribers and I thank you all! If someone is sending this to you, please subscribe. Just a note to keep you reading, there will be a picture of me in a bikini.

This post is a mix of the old me and the new me. You will see the difference. The old me finds a new report about gender inequality and shares it. The old me continues to curate a list of 650 (and counting! and thank you Laura) reports that highlight this data across 21 different categories for all to see and use. The old me still thinks in some small part of my brain that data, enough data, will drive people towards change. The old me still thinks in some small part of my big brain that if we all just give more philanthropically, we can change the world enough, or at least enough for now. The old me does not want to rail against the systems that created this f'd up world because I am part of the system, and to fully rail against it would be to more fully be accountable to myself to change it, to be willing to change, and to be willing to accept what that might mean for me, someone who has a lot. That I would have to do more at a time when I really want to do less. Because I am so damn tired (and scared).

No, really, I am tired. SO tired, that my therapist doing QNRT (Quantum Neuro Feedback Therapy) with me said, "Jacki, you are exhausted. Long-term exhausted, not just the you-don't-sleep-much-anymore exhausted." And why is this? Because I have been carrying around indigestible anger, both my own, and those of other women for a long, long time. This is the kind of stuff that shows up when you do QNRT. It is not for the faint of heart. No wonder I have had digestion issues, I immediately thought. I burp and hiccup all the time, which frankly, is really annoying. And gross. My stomach feels knotted up most of the time, but until a month ago, I could not feel it as much because my tummy was so loose and distorted from birthing two, BIG, beautiful babies. ( 9 pounds 5 ounces, 8 pounds 3 ounces, and I gained 50 + pounds with each pregnancy)

But then I had a restorative abdominoplasty on October 16th (thank you Dr. Angela Keen), and now, as I am healing, I am feeling so much more in my belly, and it feels really uncomfortable. It feels like I am pregnant, which I know may sound weird and unrelatable, especially if you have not been pregnant. But for me, it feels like the time, 23 years ago, when my tummy was tight, but I had to make space for someone growing inside it. And at times, that someone, a literal body part of another human, started to press out against the skin, and I would feel it and need to rub it. That kind of uncomfortable. If you want another analogy, imagine a moving bumpy ballon being inflated in your stomach. It's an inside out feeling of discomfort. Okay, okay. At this point, you either get it or you don't. And that's okay. Moving on. So I had an abdominoplasty, which I refuse to call a Tummy Tuck because it is insulting in my view, and although it is really uncomfortable, it looks amazing. I'm hoping tank tops are still in next summer, because I am going to rock it. I mean, who said 56 year olds can't wear crop tops? Also, I promise I will get to writing about investing.

But first, back to my exhaustion and my anger. To be honest, I have not fully processed what that means for me, as my therapy that revealed and released this was just two days ago, but what I think it means is this. My anger relates to being born a woman into the Patriarchy, and in particular, into the Patriarchal Financial Systems that are just not working for women. Never have, and at this rate, never will. Now, full disclosure. I am a woman who had a successful in a career in finance. I was a Goldman Sachs Partner at the age of 32, and because of that, I am in fact a rich woman. And while I have done lots, arguably more than most, to use my financial power to change things, it still feels like mere crumbs in a big pile of "how to make a difference" Cheerios. Don't worry. I'll explain what I mean by that.

But first, just in case you need a definition:

Patriarchy is a social system in which men hold primary power and predominate in roles of political leadership, moral authority, social privilege and control of property. Some patriarchal societies are also patrilineal, meaning that property and title are inherited by the male lineage.

Patriarchy is associated with a set of ideas, a patriarchal ideology that acts to explain and justify this dominance and attributes it to inherent natural differences between men and women. Sociologists tend to see patriarchy as a social product and not as an outcome of innate differences between the sexes and they focus attention on the way that gender roles in a society affect power differentials between men and women.

Now, this next part is still the old me. It will likely feel familiar, because it is what I, and so many other people, do all the time. We illuminate data that should be rage inducing in a thoughtful and kind way, hoping that it will lead to more people doing more. So here it goes.

It is no secret that the COVID-19 pandemic has delivered brutal setbacks to the progress of gender equity. The list of ways this virus has disproportionately affected women is long and frustrating, and has been covered widely in the media. But a recent headline in particular jumped out at me: "Quarterly VC funding for female founders drops to three-year low". The reason why it caught my eye is that it is a well known fact that venture capital funding directed towards women and/or people of color was already minuscule, and remains one of the highest and most stubborn glass ceilings in the finance and business world. The high point came last year (2019), when female founders received 2.8% of funding dollars in the US in 2019. Yes, you read that right. 2.8% is the highest that number has ever gone.

If I had any tech visualization/presentation skills whatsoever, I would create a snazzy video to illustrate just how ridiculous and insane that number is. But sadly, I do not have those skills. Just to give you an idea of how technologically challenged I am, I just learned how to use bluetooth on my iPhone a couple of months ago. So we're going the analog route instead, with an invitation to do your own live visualization at home. Take a household item that you have a lot of. I'm going with Cheerios. Clear a space on a counter in front of you and count out 100 pieces. Now pull out three of those pieces, three, and separate them from the rest. Look at this image. Sit with it. Think about it. How does it make you think and feel? If you have children, maybe a son and a daughter, imagine you are giving them breakfast and you gave one child, your son, the bowl with 97 Cheerios with a proportionate amount of milk, and you gave your daughter three Cheerios with a few drops of milk. How might you think and feel? How might you think they think and feel? Because that is the world of Venture Capital. A world where we feed male founders and pretty much starve the female ones.

Now let's try to stretch this visualization. According to the data, Latina and Black women currently only receive 0.2% of all VC funding dollars in the US. Go back to that pile of Cheerios you have in front of you. Remove just one of them and cut it into five pieces. Or I should say, try to cut it into five pieces. You literally can't, because it results in a small pile of Cheerio crumbs. Crumbs. That is what we are investing in Latina and Black women founders in this country. Crumbs. And, if your brain might be thinking... but, but, but... stop it. Look at it again. Sink into the image.

If you're not infuriated yet, let's go back to the data. Always the data. I wonder if it is time to burn the stack of mother friggin data and reports because it is so damn frustrating. Oops. Sorry. New me snuck in there for a moment. Back to old me. Recent reports suggest that 2020 is on track to be the worst year since 2017 for female founders. Investments in female funders dropped a whopping 48% between the second and third quarter, and while pundits are quick to blame COVID-19, the fact is that overall VC funding is on par with previous years. Meaning once again, this pandemic is disproportionately affecting women. And even if it wasn't, the fact that even in the best year, women founders were given less than 3% of all funding dollars is simply not acceptable, right, or fair. Especially given that women are in fact half the population of this world. And if you're thinking, "if just", "yes, but", "if only", then think again. Look at your pile of Cheerios, and then look at the tiny little pile you carved out. There is simply no way that this image is right or fair, so instead of continuing to search for excuses, it's time we find the solutions and actually do something. And what can we do? Invest. Invest. Invest.

Time for another report.

Women in VC, the largest global network of women in venture capital with 2,500+ members, understands the urgency of this issue all too well. Despite a sea, make that a lake, full of good intentions and numerous initiatives over the past several years aimed at diversifying the venture capital industry, the numbers aren't going up fast enough. This is why Women in VC has decided to look further back in the process for potential solutions. Last month, they released a report that tackles the pipeline issue head on by examining the demographics of the decision makers at VC funds. It should come as no surprise that the numbers are dismal, particularly as it relates to representation for women of colour. Select data points are listed below:

• 5.6% of all VC firms in the US are women-led, and only 2.1% of VC firms are founded by a woman of color.
• 4.9% of all VC partners in the US are women; and only 2.4% of all VC partners are Founding female partners.
• 73% of all women-led VC firms were founded in the last 5 years (since 2015).
• 23% of women-led firms are currently raising their first fund, and 44% are deploying Fund I.
• 90% of all women-led funds are considered emerging managers.

So why does this matter? For one thing, people who share demographics in common, including gender, race, ethnicity, etc., are more likely to invest in people who share common backgrounds. Many studies have shown this to be true. Many. And if you need to, refer to the definition above for a reminder on what a patriarchal system is. Think of the Cheerios, only now for the funds themselves. Decision makers (96% of them) of certain shared characteristics (male) are more likely to be present in formal and informal networks with their types of people. They see possibilities in people with shared characteristics, trust them, give them the benefit of the doubt, believe in them, and connect with their stories, products, and services. So who controls the funds really matters. Really, really, matters!

Funds run by women and people of color are also more likely to have embedded mandates to invest in the most underinvested groups. But even if they don't, by default, they are more likely to invest in people who are like them. Does this mean that all male VC investors are intentionally NOT investing in women and people of color founders? Of course not. But it is likely that a lot of them, most of them, have embedded biases that will kick in. If you don't think this is true, go back to the Cheerios photo. The system in which this world works is one of a patriarchy, and therefore it's likely that we all have these embedded biases to some degree. It takes work, a lot of work, for each one of us to unpack our core beliefs around the decisions we make, both consciously and subconsciously. Furthermore, if I dig back to my old psychology classes, science shows us that people are more likely to behave according to their core beliefs, again, consciously or subconsciously. Therefore, to change systems, we need to work, and work hard, on changing our own beliefs, and belief systems.

One key takeaway of the Women in VC report is the fact that nearly three quarters of all women-led VC firms were founded in the last five years. I can only hope that this is the start of a massive wave and not a flash in the pan. I'm also heartened by the fact that of all women VC-partners, 33% are women of colour. These women have created the structures needed to take in our investments, and now what we need to do, collectively and in a big way, is invest in them. I also understand that most people invest in funds primarily to make money. And to that I would argue that investing in small funds, especially those that are mining opportunities where others aren't, is more likely to yield better returns. Is there data on that? Likely yes, and, but, most of the women led funds are too early in their investment cycle to know.

Of course, there will always be challenges when investing in small funds, especially small, first-time funds. Personally, I have invested in a number of them over the years, and sometimes it worked out or is working out well (my open investments), while other times it did not (closed funds). Sometimes I have done well financially, and sometimes I have not. But I will say that of all the funds I have invested in over 20+ years, the worst performing were, are, ones run by teams men. In fact, one of the funds I am currently in is so poorly run and managed that every time I get a statement from them I rage. RAGE. Because once you are in a fund there really is no way out. I may just write about it directly one day, but I need the numbers in front of me when I do.

It is also worth noting that when I invest in a female-led fund or a female-led company and it does not do well, I actually feel okay about it, because at least what I did was give that woman a shot. I used my money to invest in a woman, or women, who had the courage to at least try in a system that is deliberately set up, designed, to tell her not to. And that takes a lot of GUTS and TALENT and PERSISTENCE to do it, anyways. Not all women will succeed, and neither do all men, but it has not stopped a disproportionate number of men from trying. The system, again, think of the Cheerios, is set up to help them, men, succeed in a disproportionate way. While we/people/the system make it so hard for women to succeed.

I recently did a talk with Olga Miller, cofounder of SmartPurse, with female founders in Switzerland, and I described it this way. In the movie Wonder Woman, she walks through the trenches where all the dirty and beaten down men are huddled up, holding their guns, and the dirty women are holding dirty children, in the trenches, beaten down by oncoming fire. There are casualties everywhere. She looks around, is told not to go, and climbs up that ladder and dares to try and cross No Man's Land. I know this is slightly dramatic, but women founders have to do the same. They pop up from the trenches, and then have to cross a minefield of oncoming fire to get funding and to do everything else they need to do to succeed. And some of them do actually make it through. So let's recognize, finally, how hard it is for them. Let's put up some shields for and with them to help them get through so that there are more of them on the other side. Because the more women entrepreneurs that are successful, the more that will be successful in the future. "We cannot be what we cannot see". Period. Full stop.

Again, the simple and very painful truth is that we, the royal we, make it so much harder for women to succeed as founders and fund managers. We punish women so much more for failure, especially in finance where we need them the most. This is true not only in Venture Capital, we do it across the spectrum of investing classes and strategies. If my 2009 report remain true as it relates to women hedge fund and mutual fund managers, women actually outperform on average. I believe this is because it is so much harder for them to get the damn money in the first place. I'm beginning to think I may benefit from anger management classes...

At the end of the day, there are a number of reasons why an investor, including me, will choose one fund over another, one company over another, but we all need to start looking at this more deeply from a top down as well as a bottom up perspective in order to solve this gross inequity. And we must hold ourselves accountable for unpacking the belief systems we may have as to why we are not doing more.

So first, top down. What can the industry be doing? What can financial planners (notice I did not use the term advisor, it should be planner) do? What can people with big money be doing? What can people with smaller pools of investable assets do as it relates to these founders and funds? Create a Fund of Funds? Provide better operational support for small, first-time fund managers? Create better ways to access family office money for small and first time funds? Require that pension funds and endowments change their rules to include and not exclude first-time managers? If you have large pools of money, carve out a chunk of it with a strategy to invest in small, first-time fund managers? Yes, yes, yes, yes. And, and, and. In 2009, in that report that I created in partnership with the National Council for Research on Women, an organization that gave me my first board seat, I laid out what was true for me at the time with respect to a list of solutions on how to fix finance for women, and while some of them still hold (take a look here), there is so much more we can do. Different times, same solutions maybe, and different solutions likely. But come on people, work with me here, let's get to the solutions already!

So what can women with big money do? Invest. Invest. Invest. I know it's hard and it feels scary. I get it. I REALLY get it, but we need to do it. And we, rich women, need to stop thinking that charitable dollars alone will solve the worlds problems. Nope. Never. Watch my TED Talk from 2012. Please. I have been saying this for nearly a decade. Maybe I was ahead of the times back then, but I shouldn't have been. What I said in 2012 still applies today, so let's just get on with it already. On a side note, if you haven't seen my Ted Women Talk ( TedX technically) , I don't blame you. Someone, somewhere at TED, decided that my talk wasn't good enough to be included on their main platform, despite being a Goldman Sachs partner talking about women and money. To this day it still pisses me off. Definitely looking into those anger management classes...

Next, what am I doing? Personally, I currently have a mix of funds and direct investments in companies. You can view the list of companies here, although there are a couple that are not listed yet (on my to do list!). In total I have 16 active direct investments, and three that have closed, failed. After years of not staffing myself up so that I can finally honor my intentions to more fully support them so that they can be successful because of their talent, I am going to hire someone, maybe a few someones, to help me. And by the way my returns on my direct investing are incredible. I have not done the full spreadsheet, as I need to hire someone to do that, but over the past 15 years I have invested around $3 million, and so far have returned around $6 million in cash. And that was by having ONE exit. Thank you to Alexa von Tobel and her team at LearnVest. So might I start my own fund? Yes, I might. And....

I am also an investor in a number of funds that meet the above criteria, including Illuminate Ventures, Golden Seeds Fund, Asia Alternatives and Inspired Capital. At the moment, I am in the process of figuring out just how much of my total investment capital to put into early stage investments, which includes the money I am hoping to set aside to invest in up rounds of my existing companies, new directs, new funds, and my own start-up. Yes, you heard that out loud for the first time. My own start-up. More details to come later, but I am so excited about it. I feel it is the fulfillment of a vision I have had for over two decades, or maybe even my whole life, or maybe even before I was born. (Thanks to my mom and my grandmothers!)

And, this past March, at the onset of COVID-19, I made my single biggest investment ever in one company: SmartPurse, which I mentioned above and wrote about in my first newsletter. In fact, one of the reasons I am so tired at the moment is because I woke up at 2am on Saturday to take part in their first ever Money Rally that started at 3am my time. And it was AMAZING! Never, in all my years of dancing in the space of women and money and gatherings, have the conversations been more honest and helpful. If you're sad you missed it, you should be, because I posted about it and you could have joined. But don't worry, there will be more, so be sure to join next time. And you can join for FREE if you want to become a financially empowered woman, so just do it, now. Not for me, but for you.

Why did I invest in this particular company? Well, because it checked every single box except one when it comes to why I would consider investing in a start-up. Women Founded. Amazing women. Values based. Product/service for women. I loved the product and could relate to it personally. Designed with women and by women. Meets a BIG need in a NEW way. It's coming at the right time, which means historical context, future looking, and right for this exact moment. The right team/founders!!!! Right valuation for the stage of the company. Availability of the tech to scale. All of this is why SmartPurse, in my view, will be a billion dollar company, and I said that to the founders on our first call. They had be at hello, but that is Olga's story to tell. The only thing it didn't have was a woman founder/co-founder who was a woman of color. That would have been EVERY box as it relates to my investment criteria.

Over the years, I have learned to try and not judge people based on what I think I know about them and their money. In part, because judging others would mean I would have to judge myself. Some people have less and do more, while others have more and do less. That's just the way the world works. But what I hope I stand for, have stood for, from the first day I really felt, deeply felt, what it was like to be controlled and manipulated by a man who led me to believe that he held my financial future in the palm of his hand and could punch me with it anytime he wanted to (he was a boss at Goldman Sachs), is stand up for other woman in the way I could at the time. My new mantra, thanks to my supershero Brené Brown, is "know better, do better". I realize now, post QNRT session three, that I walked into work at 85 Broad Street most days bracing to be punched in the gut. Did I always get punched in the gut? No, of course not, but many days I would be. And of course not literally. Funny enough, the reason why I think I was hired at Goldman Sachs to begin with was not because I had amazing grades and work experience, but because I was a champion body-builder. I literally had a six pack. I used to joke that being in a gym all those years prepared me for my big shot to make big money to make big change, and it really did. (photo below was when I became Ms. Junior Canada 1982)

So yes, I'm angry. Really angry, and I have been for a long, long time. That's the new me. And as my therapist said, that's okay. She said that she has learned to love her anger because anger's job is to help us set boundaries. Don't you dig that? But what I also know is that I can no longer carry around my anger inside, so this newsletter will be one of the places I will let that anger out, among other places and spaces. I am tired of feeling knots in my now flat-as-heck stomach because of financial systems that are just not working for women and people of color when I know I can do more to change it. I am tired of bearing witness to women and people of color being punched in the gut over and over again by patriarchal financial systems in a thousand different ways, including talented people who check all the boxes for starting a company but don't get the funding, or deserving first-time fund managers who don't have enough investors to get their first fund off the ground.

I was the first woman trader and still am the youngest woman trader to make partner at Goldman Sachs, a title I thought I recently handed over because I thought I had just turned 33, but nope. The year was 1996, I had just turned 32, and I was pregnant with my first child when I heard the news. And if you are connecting the dots and thinking, weird, she made partner while her belly was making room for a new human at a patriarchal institution, and now she is writing this article with a tight belly birthing the possibility of a matriarchal/just/equitable system of finance, the irony is not lost on you. Not only will I continue to use the money that I received from that IPO to fund and support women and people of color, but I will use it more boldly, bravely, and fully, because I am letting that anger out, finally, and I will more fully and productively help change the financial systems that are just not fair. And maybe when that pile of Cheerios is spit equitability and rightfully, I can actually rest and the annoying burping and hiccuping will finally stop.

Love,

Jacki Zehner

(with a huge thank you to the incredible Laura Moore for helping me birth the She Invests Newsletter and so much more. Love ya, sister)

To read the full report, please click HERE. A huge thank you to all the contributors of this report. For more reports on Women and Girls, please see my top reports list HERE.

To apply to join Women in VC, please click HERE. The directory is password protected and open to women employed full time at institutional, corporate, impact, accelerator and family office funds making direct investments; applications are reviewed and approved on a rolling basis. And thank you to the founders of Women in VC Sutian Dong and Jessica Peltz-Zatulove! You two rock.

By the way, I ate the whole bowl of Cheerios.

* QNRT™ is a proprietary protocol designed to initiate a quantum shift in the nervous system by resetting the brain's response to emotional triggers for both past and present emotional trauma and stress.

* I highly recommend Brene Brown's books, and especially her podcast, Unlocking Us.