As a Vietnamese immigrant growing up in the 80s and 90s in America, I didn’t see many women running companies and definitely didn’t see any female Vietnamese immigrants leading businesses in America. But I was very fortunate enough to see a strong female, my mom, work hard to make a living and learn English, so her children could live the American dream.
She constantly encouraged me and told me that in America, anything was possible. And so I learned at a young age, that the power of a strong woman can be passed along to another woman. Now, being the Founder & CEO of my own tech company, I realize the important role I play in female empowerment. Feeling empowered allows me to empower other women.
Today, women represent only 5.4% of CEO’s in the S&P 500 Companies, while make up 44.3% of the total employees. Our opportunity is to support as many of those total females employees, so they can have an opportunity to make it to the top.
Photo: HBS WSA
There are many great female focused events, panels and conferences nowadays. All with the aim to bring women together and have the much needed discussions about how to even the playing field. I recently attended and spoke on a panel at Harvard Business School’s WSA (Women Student Association) annual conference. The conference aims to empower and celebrate the next generation of female leaders, and this year’s theme, Women Empowered, was intended to “promote discussions on what it means to be empowered and what it means to hold power”. With an impressive lineup of 100 female speakers and 22 panels tackling some very key issues facing women today, the conference provided me some valuable views on female empowerment:
1. Female Empowerment Starts At A Young Age
Anna Maria Chávez, CEO of Girls Scouts of America from 2011–2016, the first Latina woman to hold this position, shared that as the daughter of Mexican immigrants, she learned what empowerment was by supporting her mother's run for public office. She attributes feeling empowered by her mom and by the many supporters around her. But it was her experience of working with millions of 8 year old girls that taught her the importance of girls supporting each other. Empowerment starts at a very young age and can be one of the most powerful things we can do as females for each other. If we teach our young girls to support each other, they will continue to do so throughout their lives.
Anna Maria Chavéz by RealSimple
2. You can’t be what you can’t see: Feeling empowered shows others it’s possible
It’s hard not to be inspired by Jeanne Jackson. She is the President, special advisor to the CEO, of Nike. Jackson’s successful career includes being CEO of Banana Republic, leading e-commerce efforts for Gap, and CEO of Walmart.com. In addition, she has served on the board of Nordstrom, West Marine, Nike, Williams Sonoma, and Harrah’s, Delta, Kraft and McDonald’s. During her keynote to the conference attendees, she shared that when she attended Harvard Business School, only 10% of her class was female. She jokes that back then, most women attended Harvard Business School to find a desirable husband, since the odds were in your favor. But Jackson had a love for retail, and ambition inside of her that propelled her to being at the forefront of retail and e-commerce. She’s been the only women in many boardrooms throughout her career, but she never took herself “out of the game”. She stayed in, felt empowered to do so, and has showed us that it’s possible.
3. Intersectional diversity is very important
We can’t talk about gender diversity without racial diversity as well. I was one of four panelists on the “Diversity In Tech: Women’s Leadership in Effecting Change” panel. My fellow panelists included Asha Keddy of Intel, Catherine Allegra of Markit and Jen Cotton of Twitter. As female leaders in technology, we discussed our efforts to bring more diversity into technology and to our companies. Inclusion of all genders and backgrounds is very important to the technology industry, and being women and minorities in the industry, we have the opportunity to lead the change. Technology can greatly benefit from the inclusion of women and minorities.
4. Flexible workplaces are essential
Jackson of Nike said she hoped that the women at the conference don’t take themselves out of the game. This topic surfaced a lot across the 22 panels and workshops of the day. Do women have a fair choice when it comes to staying in the game? One of the most important issues facing women in their careers is the balance of motherhood and childbirth. At Intel, Keddy shared that they have paid “bonding leave” available to both men and women after childbirth. In “The Current State of Feminism” panel, Anna Auerbach, CEO of Werk, stressed the importance of companies to evolve and have a flexible workplaces so women have a fair chance to make “the choice” to stay in the game. Not be forced to take herself out or opt-out.
5. Being empowered allows you to empower others
Heidi Cruz, Managing Director at Goldman Sachs and a HBS alumni delivered the closing keynote of the conference. Cruz, a fascinating and strong woman who just happened to be married to Ted Cruz, stressed that being empowered meant being flexible to face life’s challenges and opportunities. Cruz said she wasn’t about to leave her career for a man, but she could for her country. And that supporting and serving others, like your country, can be empowering as well.
Vicky Au and Lisa Wang of the HBS WSA, reported that with 1,300 attendees, this was their largest conference to date. Attendees were made up of a mix of HBS students, undergraduate students and young professionals.
After speaking to many attendees about their experiences for the day, it became very clear to me that female empowerment begins with ourselves and continues with empowering other women. Conferences like these are very important because they show young women that they can be a part of the next generation of leaders. And as female leaders, we can help show young women what they can achieve and help empower them to get there. Because after all, power is not diminished by being shared, it can only grow stronger.
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.