When Women Control the Money, Female Founders Get Funded | Hacker News Reader

When Women Control the Money, Female Founders Get Funded

nytimes.com

16 pointspetethomas14 comments

This doesn’t sound very inclusive.

If inclusivity is so important, why do the loudest advocates for it eschew it whenever they get the chance to turn the tables?

Maybe because the people excluding them don't do anything about it. If you're not getting a slice of the pie because other people are eating it and not inviting you, it's reasonable to make your own damn pie.

Then why not just be honest about it? You can't simultaneously be for equality and favoring one gender. It doesn't matter how good you are at twisting words, in reality you just can't.

Then what’s your solution? What would you do in their place if you were a female founder looking for funding? It already favors one gender when 97.8% of the funding goes to one gender. This is an equalizing measure.

Applying equalizing measures post-hoc without adjusting for baseline rates or confounders cannot be done in a reasonably fair way. Not only is the baseline rate of women seeking funding much lower, but there may be many other variables that influence the capital distribution, such as women asking for less funding than men do even when they do seek it.

You can't "remove the bias" from situations without knowing what a fair distribution would look like to begin with (If you think 50% of the capital should go to women, I'll wish you good luck in either funding them an order of magnitude more than men, or funding them equally and somehow getting an order of magnitude more women interested in becoming founders).

The percentage of startups with female founders is about 17%[0]. Do you think having 17% of the companies only getting 2.2% of the funding is fair? Would you be interested in being a founder with those odds? Clearly, the existence of programs like those described in the article, which were started by women, indicates that women don’t think they’re getting a fair shake.

IMO, a fair distribution would be approximately equal to the ratio of companies with female founders.

What’s your solution, if any look like?

[0]: https://techcrunch.com/2018/01/15/the-portion-of-vc-backed-s...

Ignoring the rest of the thread, there are a bunch of questions that must be answered first.

Do women fund as attractive start ups as men? Do women seek as much funding as men? How is a female start up success rate vs men succes rate? All things normalized of course.

You can't ignore context, with all that being said it does sound stunningly low when you compare the 17% receiving 2.2% of funding.

I agree that the discrepancy raises questions that need to be answered, but they are not the ones you suggest.

Asking if women fund (found?) "as attractive startups as men" is essentially implying that the reason female cofounded startups get proportionally 1/8 as much funding is that women's ideas are not as good as men's. Anyone who wants to raise that question has an affirmative burden to prove it's the case.

Do women seek as much funding as men? Honestly, do you really think women are asking for 1/8 as much funding as men? The theory I've seen is that men are funded for potential, but women are founded based on performance. And, doing more with less is a lot harder than doing more with more.

What is the success rate of female cofounded startups? According to Business Insider[0], 52 tech companies IPO'ed in 2018. By the percentage of funding, you would expect 1 on average. Since funding is a key component of success in the early days (and, getting past the early days is essential to getting to IPO), I would argue it's entirely plausible that capital constraints are the reason for lack of success.

The proper experiment to run here would be to compare companies with a female cofounder to companies with all male founding teams at similar levels of funding. Since startups fail at such high rates (I've seen numbers that range from 60-90%, with the numbers on the low end defining failure as "returning less than 1x"), this would be a very difficult experiment to run given the 5:1 ratio of female cofounded to all male cofounded companies.

[0]: https://markets.businessinsider.com/news/stocks/initial-publ...

I suppose we will have to look at the future returns of VCs like "iFundWomen".

If they get higher returns then "sexist" old-school male dominated VCs, then we will have some strong evidence that "sexism" is getting in the way of big returns.

Why do the returns have to be higher, and not just comparable?

A fair point!

I am not sure what the returns are for VCs, with either male or female founders.

Certainly 'goop.com' has done very well. Theranos, not so well.

It would seem to me that if women founders are being actively discriminated against, investing in women founders should produce returns that are higher than normal.

Of those 2.2% of female-led startups, what has been the return to investors? I have no idea if anyone has ever looked into that.

Assuming that women are just as good at founding companies as men, I don't see how funding women at higher rates should produce higher than normal returns. Higher returns would imply that VCs are able to tell the best female-lead companies apart from the rest (and apart from the more marginal male-lead companies). It's not clear to me that many, if any of them can do that, given the number of successful companies that have been passed on by multiple VCs before finding their first investment.

This is a bastion comment for biased communities: We're allowed to be biased, but the people who call us out on this aren't allow to have a bias to compensate for our existence.

This is no different from religious bigots who claim it violates their "religious freedom" to remove their "right" to discriminate.

At least to me, these sort of articles always seem to conflate two different things: a handful of horny jerks, and the inability for a certain group (white, middle-aged, male) to understand how attractive business ideas could be to other groups (gender, age, culture).

I'm not sure these two problems are all that much related, and mixing them together is not going to help fight them.

I do not share or understand most of my SO's interests, and vice versa. I don't think that's sexism. I imagine it would be a lot harder to enthusiastically fund ideas which are not interesting to me at all; it would require a much larger leap of faith.

We need female funders not because men are all too horribly sexist but because it would simply be easier to find people that can relate to your ideas and see value in them.

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