Investing in Women Isn't a Cause
Whitney Johnson
Learning is the oxygen of human growth. Learn along with me on the Disrupt Yourself podcast.
It’s no secret that investing in and with women is a controversial topic. Women have trouble raising money. I’ve seen it firsthand. Experienced it, leading some to whisper the oft-heard if no one's invested yet, you must not be investable. There's the sense that investing in women is a cause, a pseudo pity party, rather than something that investors can make money on.
A string of recent data points indicates that investing in women is more than being polite with your money, the return on investment (ROI) is significant, and we've got the numbers to prove it.
Front and center is a financing that took place in early May with a New York-based company called The Muse. The Muse is a career advice and job marketplace for millennials led by Kathryn Minshew (pictured above) and Alexandra Cavoulacos.
The lead investors are women-led funds. This is an inflection point for women entrepreneurs and investors.
We know women are starting more companies.
That women run more capital efficient companies.
Venture-backed companies with women female executives have higher success rates.
So what does this deal mean?
1. We are on the cusp of a secular shift. In 2000, only 1.7% of all venture funding was allocated to women-led businesses. Today, we are in the range of 10% depending on your source. While the number is still painfully low, we are at a tipping point, ready to move into the hypergrowth stage along the S-curve of disruption.
2. Women are increasingly likely to build and invest in a company whose value exceeds a billion dollars, commonly called a unicorn company.
The good news is that this trend is likely to continue. Funds with women partners are more likely to invest in a woman-led business.
All of this proves again (and again) if you want to make money, invest in women.
Whitney Johnson is a co-founder and Managing Director of the soon-to-be-launched Springboard Fund, investing in high-growth, women-led businesses. Her co-founder and the lead partner is Kay Koplovitz, who built the unicorn USA Networks and the SyFy Channel. For more stories on personal disruption, see Johnson's book Disrupt Yourself: Putting the Power of Disruption Innovation to Work out on October 6, 2015.
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9yEverything I read is true!
Director of Customer Support, Americas
9yPinar Yigiter ;)
President at Lundeen Abrams Advisors LLC
9yI appreciate the commentary here as this is a complex subject. I would say to Joey that we aren't "looking at" a glass ceiling because it's invisible. When you hit it, you know, because it hurts. Your daughter won't see it, either but when she comes to you complaining of a headache, you, too, will know it's real.
Job Coach / Emplyment Engagement Officer
9yAny woman who fails as a business woman doesn’t fail because she is a woman; she fails probably because she didn’t do her homework, just like a man who fails, he too probably didn’t do his homework. Those who believe that when a woman fails because she is woman are probably a hard-core group of individuals who are locked into the old cliché of “women aren’t good enough to go into business” in order to justify their misogynistic mind set. I am not disputing entirely your view point Jeri, but my question to you is: “how long are we going to sit around looking at the glass ceiling”? If I am sitting in the shade today that is because someone, a woman planted a tree for me a long time ago. I have a daughter and I wouldn’t want her to grow up twenty years from now looking at the same glass ceiling.
Intuitive, Visionary Coach & Strategist | Empowering Transformations. I connect people with resources, tools, and training and help you visualize your path to create new possibilities for a better world.
9yYou have a point, Joseph, but the reality is women are still behind when it comes to C-Suite roles. And some investors may choose NOT to invest in a great product because the company is run by a woman, thinking she doesn't have the capability to really make it successful. Every women who fails (like Carly Fiorina) sets successful women back, whereas when men fail (and some fail big), their incompetence is overlooked and before you know it, they're heading up another company. Here is an interesting article about why women CEOs are fired more often than men: http://j.mp/1Hlmtdo. The glass ceiling is alive and well!