C-Suite Network

Breaking Up the Good Old Boys Club — Redefining Diversity in the VC Industry


You always hear about business being an ‘old boys club.’ While that is changing, it is still the case in venture capital.  


While the number of women-led venture funds grew 15x in the last decade, women-run just 5.6 percent of funds in the U.S., according to a 2020 study from Women in VC. You don’t have to be a math major to see the discrepancy in the numbers. 


“I think it’s a big issue,” Gayatri Sakar said. “All this old finance, even the venture capital money, they’re basically a broke(n) club, and they are guarded by males. So, we want more women to be a part of this venture capital private equity communities so that we can bring much more opportunity for amazing talented women.” 


Gayatri runs She-VC, a fund that bills itself as a “story-telling platform of women and diverse GPs (General Partners) (and) LPs (Limited Partners).” 


Statistics like the ones she mentioned above were just a few of the insights she made during a recent C-Suite Network private community event.  


Women are not only in the minority running VC firms. Gayatri says women with business ideas don’t have a lot of luck when it comes to funding. She says it’s a symptom of the current climate. 


“I think one of the biggest issues is that there are not many women who are writing checks. So, it kind of starts from there,” Gayatri said. “When you see there are not many women who are running funds, there are not many women who are decision-makers. That’s when you find that it is much more difficult to bring capital allocation to women-run businesses if you’re carrying your idea about certain women-related products in a group of men, they don’t understand it.” 


Baked in Biases of Pitching 


While Gayatri outlined many of the obstacles women face in the VC industry during our conversation, one that blew me away was the biases of the representatives in the room when the hopefuls are pitching. She says women can have the best slide deck in the world, but that doesn’t earn them the respect they deserve.  


“I’ve heard from my friends when they’re going and pitching, to their LPs or to their investors, and these are women who have run amazing businesses, they started their own funds,” Gayatri said. “The LPs are not taking them seriously. They’re thinking, ‘Oh, you must be an assistant to the partner,’ and they’re like ‘No, I’m the boss, this is my fund.’ There is a shift. Not just changing the mindset, but there’s a there’s a big paradigm shift that is required to understand that we need to stop judging women based on their performances because men have been judged by their potential.” 


There’s another bias Gayatri says that not only happens in the VC pitch rooms but in business overall that she says create a double standard. 


“We need to stop judging what’s going to happen to your fund or what’s going to happen to your business if you have a kid (or) are a single woman who’s going to get married. You are not asking those questions to a man,” she said. 


It’s easy to categorize those types of questions as sexist, but those questions aren’t always from men, Gayatri says. Women entrepreneurs can also be guilty of asking those questions. She believes this type of questioning, while well-intended, are holding society back and stopping it from making progress. 


“I think that is where we think that we can do better if we can show that these are the amazing women, who have been working non-stop being whether they’re orphaned at birth or being a single mother, and they’re still pushing the barriers,”  emphasized. “You have to believe in them. You have to take a chance on (them). Once you take a chance, they can prove themselves.” 


Be a Mentor 


One of the ways Gayatri says women can help each other out is through mentoring. I like to say that if you make it to the top, be sure to send the elevator back down, and she agrees, but she holds everyone accountable. 


“I think people don’t do a good job in mentorship. I have always seen that men, white guys, they want to mentor another white guy, that’s not helping bring much more diversity (to) your mentorship table,” Gayatri said. “It’s also a situation where I think people have to bring themselves out of their comfort zone because they’re not just taking a chance on a female entrepreneur or a diverse entrepreneur, they’re taking a chance on themselves.” 


Redefining Diversity 


While our society wrestles with diversity overall, the business world is no different. With this in mind, Gayatri has a challenge for corporate America. 


“Diversity has always been a part of philanthropy or an extension of philanthropy, and that’s a big problem, (diversity) is a mainstream issue. You cannot just put it as a part of philanthropy or charity that can fix it,” Gayatri says. “This has to be fixed through capital allocation. That’s the only way. You cannot fix it through throw(ing) some money at the charity, and that can be done. This was the biggest problem when the COVID-19 situation happened. What happened is that a lot of the diversity programs got canceled because they did not have enough money.” 


Gayatri also points out VCs will generally send women looking for venture capital to the diversity team, which aren’t always the best-funded, equaling less money for women. She points out it’s just another example of the inequities in the current VC system. 


My conversation with Gayatri was eye-opening, and her insight were certainly a reality check for the good old boy’s club. If you’d like to hear more from her, listen to the full discussion here. That’s just a sample of our conversation.


If you’d like to be a part of the complete discussion, consider joining the C-Suite Network. For less than the cost of a business lunch a month, the C-Suite Network gives you access to an exclusive community of leaders and provide you with the content you need to become the most strategic person in any room. Click here to learn more.  

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