I don't like to make predictions. There's a degree of hubris involved in any effort at prognostication; the future is an unknowable thing, mysterious and hazy and prone to rapid shifts, evident in the way the last half-decade utterly upended the conventional view of where America and the world were heading. But it's not just a new year; it's an entirely new decade, which is a cause for reflection not on the past, but on the future. What kind of world do we want to build?
And the fact is that there's a lot that needs doing. We're entering the twenties faced with massive problems confronting feminism and the human project, problems that we need to keep squarely in focus as feminist issues. It can be easy to think of the work of feminism centering on legal equality, workplace equality, the ERA, and electing a woman president. Most of my own writing on the subject has focused on that top-level view, prioritizing the practical realities women face in the business world. But that's just one facet of a much larger world that feminism, with its insistence on equality and justice for women, must confront in the coming years. Poverty issues are feminist issues exactly as much as bodily autonomy and equal pay.
Take climate change. At the heart of it, women are the ones who will be most adversely affected by climate change in ways that may surprise you if you haven't stopped to consider it. Here in the US, we can be reasonably confident that we have the resources to shield ourselves from our changing planet's most debilitating impacts, but women live outside this country, too. Women are most likely to live in poverty with dependents, and the crumbling of traditional productive economies as the seas rise, the fish die, and food grows more expensive are only going to exacerbate that problem. Dwindling resources will increase the caregiving burden women across the world are subject to and destroy many opportunities to get out of poverty. Over the last twenty-five years, global poverty has declined to the lowest it's ever been, and that reduction is the key factor in the global advancement of women: increased resources means increased opportunities for women. But what happens when that goes away?
Like women's reproductive rights, it's the sort of decision that gets made by the people who are going to be the least affected; human history, to borrow a phrase, is "a rich man's war but a poor man's fight." As the powerful work to shield themselves from consequences, the hammer has only one place to fall.
Poverty is also a key factor in the fight for reproductive rights. There are consequences to the loss of bodily autonomy that rarely get discussed in our grand public debates that mirror those of climate change: reducing the opportunities for women and girls to advance economically and socially, tying us to our uteruses in perpetuity and leading to more women staying in the home. That has the further knock-on effect of forcing dependence on a breadwinner, which can mean that a woman is unable to leave an abusive situation. And as the present administration has been remaking the American judiciary in the image of Mike Pence, a man who calls his wife "mother" and wants abortion outlawed, the threat of regression is very real, especially considering the growing movement of radicalized white women eager to embrace the destruction of hard-won rights, idealizing domesticity and submission to their husbands.
And it's something I suspect we'll see more of as economic forces make it harder for women in the service economy of the West to make a living. The gig economy that was supposed to put control over labor in the hands of individual workers has been revealed as little more than another engine of exploitation, and one that keeps its workers dangling from a hook. The gig economy has been promoted as something women especially should embrace, but it hasn't panned out; women are left uninsured, uncertain, more and more likely to be shunted into "women's work" by individual contracts, and less able to negotiate their own wages.
Uber drivers, famously, are barely scraping by, and the rise of contract labor has hollowed out decades of gains in labor rights. As big companies increasingly rely on contract labor, women especially are in the weakest position to secure the stability they need, especially considering that women are more likely to both work outside of the home and serve as their household's primary caregiver.
Over and over, we see a massive intersection between poverty and the subjugation of women. If we fail to keep that in mind over the next decade, the end result – woman president or not – will be millions and millions of women left behind.
Poverty isn't a problem with an easy answer, and its complicated effects touch every aspect of human life. But action is desperately needed, and that has to start with us. Now is the time to put our focus squarely on this, the number one issue affecting women across the globe, while we still have time. That extends beyond government action, although your votes are still sorely needed, and it extends beyond our discourse. All of us involved, however tangentially, in the goal of the advancement of women need to make poverty a priority in our activism, in our advocacy, and in our lives.
Amid the mainstream conversation about inclusion and justice in the workplace, otherwise known as #MeToo, a Silicon Valley venture capital fund considered how they can be more inclusive of the women, minority, and LGBTQ entrepreneurial communities.
Their solution? Ask the CEOs they currently fund to promise to hire senior-level employees from diverse backgrounds.
Lightspeed Venture Partners, a venture capital fund that has investments with blockbuster startups such as The Honest Company, Affirm, and HQ Trivia, has asked its portfolio company CEOs to sign a “side letter" affirming their commitment to consider women and other underrepresented groups for senior jobs and new spots on their board of directors.
Can making pledges— or even hiring a C-Suite level employee to manage diversity efforts— really make an impact on the funding gap for multicultural women-led companies?
Many experts say it's going to take systemic change, not letters of intent.
It is well reported that the amount of investment going to multicultural women-led companies is incongruous to the entrepreneurial landscape and the performance of their businesses. Between 2007 and 2016, there was an increase of 2.8 million companies owned by women of color. Nearly eight out of every 10 new women-owned firms launched since 2007 has been started by a woman of color yet, these businesses receive an abysmal 0.2 percent of all funding. Amanda Johnson and KJ Miller, founders of Mented cosmetics, were just the 15th and 16th Black women in history to raise $1M in the fall of 2017.
The multicultural women who do defeat the odds to get funded receive significantly less than male founders. The average startup founded by a Black woman raises only $36,000 in venture funding, while the average failed startup founded by a White man raises $1.3M before going out of business.
The implicit and explicit bias not only impacts individual multicultural female founders, it could be stifling innovation. For example, companies with above-average diversity on their management teams reported innovation revenue as 45 percent of total revenue compared to just 26 percent of total revenue at companies with below-average management diversity. That means nearly half the revenue of companies with more diverse leadership comes from products and services launched in the past three years.
In our economy today, venture capital is responsible for funding the work of our most innovative companies. Venture capital-backed U.S. companies include some of the most innovative companies in the world. In 2013, VC-backed companies account for a 42 percent of the R&D spending by U.S. public companies.
With a wealth of multicultural women entrepreneurs and evidence to support the performance of diverse companies, why does this funding gap persist?
According to Kristin Hull, founder of Oakland-based Nia Impact Capital and Nia Community, many traditional investors consider women or minority-led businesses as a category in their portfolio, like gaming tech or consumer packaged good. Hull, who focuses on building portfolios where financial returns and social impact work hand-in-hand, argues gender and ethnicity are not a business category and investors who dedicate a specific percent of their portfolio to diverse companies are the ones missing out.
“We are doing this backwards," says Hull. “Adding diverse, women-run companies actually de-risks an investment portfolio."
Hull points to research that has found women are more likely to seek outside help when a company is headed for trouble and operate businesses with less debt on average. What's more, a study conducted by First Round Capital concluded that founding teams including a woman outperform their all-male peers by 63 percent.
Ximena Hardstock, a 43-year-old immigrant from Chile experienced this bias first hand before she raised $5.1M for her tech startup. “How do you get an investor to notice you and take you seriously?" says Hardstock. “White men from Harvard have a track record and investors are all looking for entrepreneurs that fit the Zuckerberg mold. But a woman from Chile with an accent who started a technology company? There is no track record for that and this is a problem so many women of color face."
Hardstock came to the U.S. from the suburbs of Santiago when she was just 20-years-old. Alone with no family or connections in the U.S., Hardstock worked as a cleaning lady, a bartender, and a nanny before she began teaching and working in education. “I had a lot of ideas and Chile is still a very conservative country," she says. “Most women become housewives but I wanted to do something different. So, I moved to the U.S."
Hardstock went on to earn a Ph.D. in policy studies, served as vice president of Advocacy for National StudentsFirst and worked as a member of Washington DC mayor Adrian Fenty's cabinet. Her experience working in both education and government exposed her to a need to simplify the process of connecting lawmakers with their constituents. As a result, Hardstock founded Phone2Action, a digital advocacy company that enables organizations and individual citizens to connect with policymakers via email, Twitter, Alexa and Facebook using their mobile phones.
Because venture capital and private equity are not necessarily meritocracies, Hardstock initially struggled to get in an audience with the right investors despite her company's growth potential, her experience, and her education. In fact, it wasn't until she won a competition at SXSW in 2015 that she could get an audience with a serious venture capitalist.
While it may seem like symptoms of a bygone era, both Hardstock and Hull say the path to investor relationships is forged in places where many women of diverse backgrounds are not – ivy league organizations, golf courses and late night post-board meeting cocktails attended mostly by White men of means.
The history of venture capital has never been very balanced, according to Aubrey Blanche, global head of diversity at Atlassian software development company and co-founder of Sycamore, an organization aiming to fix the VC funding gap for underrepresented founders. “White and Asian men have built the venture system and for generations have been seeking out people like themselves to invest in."
Personal and professional networks are critical for founders to connect with investors, but many multicultural women don't have access to the networks their White peers have. According to a study conducted by PRRI, the average White person has one friend who is Black, Latino, Asian, mixed race, and other races. This common situation makes getting that all important warm introduction to established VCs very challenging for multicultural women founders.
“Is the ecosystem of your network equivalent to your net worth? Absolutely," says Hardstock. “For us, we have to build our own ecosystem and recreate what happens on the golf courses and at the Harvard reunions."
To Hardstock's point, most multicultural women with entrepreneurial aspirations lack that Ivy League network. According to reporting published in The New York Times, Black students make up just nine percent of the freshmen at Ivy League schools but 15 percent of college-age Americans. This gap has been largely unchanged since 1980.
While notable female investors such as Arlan Hamilton, Joanne Wilson, and Kathryn Finney are actively working to close the funding gap for women of color, only seven percent of current senior investing partners at the top 100 venture firms are women. Less than three percent of VC funds have Black and Latinx investment partners. Without an influential network, Hardstock and entrepreneurs like her are left screaming for a seat at the table.
When Black, Latina, and Asian women founders do get in the room with the right investors, they have to work harder to get the investors to relate to their products and services. “Entrepreneurs solve problems they understand," says Blanche. “When multicultural women entrepreneurs present their businesses to a homogenous group of male investors who may not be equipped to understand the idea, they may pass on an amazing business."
Take, for example, the founders of Haute Hijab or LOLA. Founders of both successful startups would have to explain the market for their services to a table occupied mostly by men who may never have considered that Muslim women want more convenient access to fashion and have never considered women might prefer to purchase organic tampons.
This lack of familiarity typically means reduced funding for women and a host of other consequences.
As one recent study pointed out, even the way investors frame questions to women can impact funding. According to the Harvard Business Review, female founders are often asked “prevention-oriented" questions focused on safety, responsibility, security, and vigilance. Male founders, on the other hand, are often asked questions focused on hopes, achievement, advancement, and ideals.
When all of these factors are considered, a side letter may not be enough to begin to close the funding gap.
Both Blanche and Hull say real change can be made by democratizing information and education on impact investing. Both women say educating investors and MBA candidates about impact investing is the best way to overcome current bias.
Blanche's organization, Sycamore, produces a newsletter for new angel investors who want to help close the funding gap while making money in the process. Hull's firm has an internship program for multicultural girls from Oakland to expose them to the worlds of investing, entrepreneurship, business leadership, and financial literacy.
“I'm excited about the changes I see," says Blanche. “I see more firm employing the Rooney Law on an institutional level, an increase in smaller firms looking at underserved communities, and the democratization of institutional funding."
Hull adds that as long as multi-cultural women-led firms continue to show returns and outperform or perform on par with companies founded by White men, the investor community will rethink their portfolio strategies.
This piece was originally published in 2018.