WEBVTT - Breaking Down Barriers for Women in VC

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<v Speaker 1>You're listening to Bloomberg Business Week with krol Messer and

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<v Speaker 1>Tim Stenebek on Bloomberg Radio.

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<v Speaker 2>One of the things we talk a lot about here

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<v Speaker 2>at Bloomberg. We've done some great reporting what goes on

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<v Speaker 2>with female founded startups. No secret that they account for

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<v Speaker 2>only a tiny, tiny portion of the venture capital that's

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<v Speaker 2>deployed each year. So here's some numbers for you. In

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<v Speaker 2>twenty twenty one, for instance, female founders secured only two

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<v Speaker 2>percent of venture capital in the US. That's according to

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<v Speaker 2>the research firm pitchbook that follows all of this, Tim, and.

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<v Speaker 1>That was a year that VC money really flowed. I

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<v Speaker 1>mean twenty twenty one, those were the boom years. The

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<v Speaker 1>last eighteen months have been a different story entirely. We've

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<v Speaker 1>got with us right now Test name Dohadwala, founding partner

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<v Speaker 1>of Excelstar Ventures. The VC firm says it invests in

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<v Speaker 1>quote clear disruptive technology. They've got a lot of medtech

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<v Speaker 1>on there, really cool stuff and really cool companies that

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<v Speaker 1>they've invested, and they're also passionate about funding women and

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<v Speaker 1>minority led companies. Very pleased to have test name with

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<v Speaker 1>us this afternoon. So test name give us an idea

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<v Speaker 1>of what you've experienced and what you've experienced working as

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<v Speaker 1>a VC, and also what you've experienced as far as

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<v Speaker 1>the companies that you funded. Is this a is the problem?

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<v Speaker 1>I kind of know the answer here, but I'm still

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<v Speaker 1>going to ask this anyway. Is the problem that only

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<v Speaker 1>two percent of the companies are actually founded by female founders?

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<v Speaker 3>No? I mean I think that there it's a systemic problem,

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<v Speaker 3>and I think that the issue is that it's it's

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<v Speaker 3>an everybody problem. It's not just a you know, the

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<v Speaker 3>funds that are focused on investing in women. Everybody needs

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<v Speaker 3>to work at this problem. So, for example, I know

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<v Speaker 3>that in VC firms, only twelve percent of VC firms

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<v Speaker 3>have women as decision makers, and sixty five percent of

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<v Speaker 3>VC firms still don't even have a single female partner,

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<v Speaker 3>and females are noted to be more likely to invest

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<v Speaker 3>in female led companies. So I think that itself, we

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<v Speaker 3>just don't have enough women investors in decision making roles

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<v Speaker 3>investing in women. So I that's one of the issues.

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<v Speaker 2>Testing. I want to jump in off though for a moment,

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<v Speaker 2>because I remember Bluemberg did a story I think it

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<v Speaker 2>was out during the pandemic, and it was even about

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<v Speaker 2>female venture capitalists were less inclined to even invest in

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<v Speaker 2>female founded ventures, and whether it was pressure within a

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<v Speaker 2>firm or what have you, it's just like everyone stays away.

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<v Speaker 2>Help me out, So go ahead, continue with your reasons why,

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<v Speaker 2>because it's just mind blowing.

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<v Speaker 3>So it's I think there's a little bit of well,

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<v Speaker 3>you know, this person is experienced entrepreneur, they've had several exits. Well,

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<v Speaker 3>if you keep investing in just experienced entrepreneurs that have

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<v Speaker 3>had prior exits, and you're probably going to keep investing

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<v Speaker 3>in males because a lot of female led companies are

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<v Speaker 3>first time entrepreneurs, and you have to be willing to

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<v Speaker 3>take a risk on a first time entrepreneur, and it

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<v Speaker 3>may appear more risky. But I also think some of

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<v Speaker 3>it has to do with the way we ask questions.

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<v Speaker 3>There's been a lot of research that says that all

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<v Speaker 3>investors ask women sort of risk mitigation type questions, and

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<v Speaker 3>we ask men growth mindset questions. And so if you're

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<v Speaker 3>going to change the way you ask questions to your entrepreneurs,

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<v Speaker 3>you're going to have a different outcome in the way

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<v Speaker 3>you perceive the company. So For example, at excel Start,

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<v Speaker 3>we have a really structured way we do diligence, and

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<v Speaker 3>so we make sure that we're asking same type of

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<v Speaker 3>questions to all of our entrepreneurs. We have a quantitative

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<v Speaker 3>and a qualitative way that we do it. We have

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<v Speaker 3>a matrix that we fill out and a really robust report.

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<v Speaker 3>But if you're sort of just flying by the seeder cuffs,

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<v Speaker 3>then your own subconscious biases are going to determine what

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<v Speaker 3>type of questions you're asking, and that changes the outcome

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<v Speaker 3>of how you perceive the company and the opportunity that

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<v Speaker 3>it may be that it may have.

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<v Speaker 1>What do the data show as far as returns and

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<v Speaker 1>who's leading companies?

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<v Speaker 3>So I mean, if you think about the data right now,

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<v Speaker 3>I think there's only been twenty women who have ever

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<v Speaker 3>led a company to an IPO. And I don't think

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<v Speaker 3>that's because women don't want to lead companies to IPOs.

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<v Speaker 3>I think that there's a bias. One of our companies

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<v Speaker 3>just recently was determining whether they wanted to hire a

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<v Speaker 3>certain executive and not the CEO role, but in a

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<v Speaker 3>very senior important role, and there was some question around

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<v Speaker 3>whether or not that women would be able to potentially

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<v Speaker 3>in a few years be a key management director while

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<v Speaker 3>leading the company to an IPO, and a few not

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<v Speaker 3>just myself, but another male board member spoke up and said, well,

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<v Speaker 3>she we haven't even hired her. Let's get her in

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<v Speaker 3>the door. Let's see how she does, and we'll make

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<v Speaker 3>a decision when the time comes whether or not she'll

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<v Speaker 3>be suited to be in the role during an IPO.

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<v Speaker 3>So there are some assumptions that are made before women

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<v Speaker 3>can even get into the door and make an impact

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<v Speaker 3>in the company.

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<v Speaker 2>So Devil's advocate a little bit because I do believe,

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<v Speaker 2>especially in a capitalistic society, that money talks, and if

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<v Speaker 2>there's a good business, I don't care if a monkey

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<v Speaker 2>or a frog is running it, like people are going

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<v Speaker 2>to invest in it. Is there something else that's missing

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<v Speaker 2>that just I mean, look at the creator of spanks.

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<v Speaker 2>She created a billion dollar business like people women create,

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<v Speaker 2>you know, Kardashians like whatever, go everywhere you want, Like

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<v Speaker 2>people create billion dollar Oprah, like people create women specifically

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<v Speaker 2>create successful businesses. But I'm just I'm wondering if there's

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<v Speaker 2>something else missing in the trajectory that doesn't allow women

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<v Speaker 2>to take their ideas and really run with it or

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<v Speaker 2>attract again the investors that ultimately create a female run

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<v Speaker 2>Google alphabet a female run Tesla. You know what I mean?

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<v Speaker 3>Well, I think that I do think that there are

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<v Speaker 3>a female I think a lot of female. When you

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<v Speaker 3>think about entrepreneurs, a lot of them are thinking about

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<v Speaker 3>what is in their realm of expertise or what have

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<v Speaker 3>they experience in life that drives them to found a

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<v Speaker 3>certain company. Right, So, if a female is finding founding

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<v Speaker 3>a company based on the female experience and she's pitching

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<v Speaker 3>it to male venture partners, there is a possibility that

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<v Speaker 3>isn't going to resonate, and we have to look we

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<v Speaker 3>have to look at the reality that we're faced with.

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<v Speaker 3>If you're if the decision makers are going to be

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<v Speaker 3>men and they're the ones who are you know, owning

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<v Speaker 3>the lion's share of investment dollars, then you have to

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<v Speaker 3>I'm not telling you to change your idea. What I'm

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<v Speaker 3>suggesting is that you people need to be aware. Women

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<v Speaker 3>need to be aware of these biases and then adjust

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<v Speaker 3>their pitch such that it may still be a wonderful

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<v Speaker 3>opportunity based on the male experience, but they need to

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<v Speaker 3>make sure that they present it in a way that

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<v Speaker 3>resonates with their male counterpart. Not everything about the female

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<v Speaker 3>experience will resonate with males, and so you have to

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<v Speaker 3>perhaps adjust your pitch. Think about how you know, how

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<v Speaker 3>are you doing the market sizing, What are you talking

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<v Speaker 3>about exits? Do you have enough exit potentials? A lot

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<v Speaker 3>of times, for example, if in a women's health company,

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<v Speaker 3>whether we like this or not, in med tech, there

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<v Speaker 3>aren't that many large medtech players that have sizeable women's

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<v Speaker 3>health divisions, right, and so if you have a women's

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<v Speaker 3>health medtech company, but you don't have perhaps a very

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<v Speaker 3>distinct way of exiting to a sizable acquirer that shows

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<v Speaker 3>an acquisitive nature, then investor is going to push back

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<v Speaker 3>on that.

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<v Speaker 2>So I go ahead, no that' no no, no, no, no, no,

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<v Speaker 2>you're saying really smart things. I guess that I'm just

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<v Speaker 2>thinking again, I'm playing Devil's advocate. Like if Mark Zuckerberg

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<v Speaker 2>had been Maria Zuckerberg and she created Facebook? Would would

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<v Speaker 2>she have gotten the money to create Facebook? Now?

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<v Speaker 3>Meta? I don't know, because I do see some of

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<v Speaker 3>our female entrepren and they are fab many of them,

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<v Speaker 3>I mean, some of them have issues just like our

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<v Speaker 3>male entrepreneurs do. But I just find that females also

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<v Speaker 3>don't have as much of a network. I don't know

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<v Speaker 3>if it's the sort of that old boys network that

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<v Speaker 3>continues to prevail, but they just don't seem to know

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<v Speaker 3>enough investors. And I also find them that they're not

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<v Speaker 3>as assertive with their investors and asking for introductions. So

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<v Speaker 3>only my male for example, when we're sitting in the

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<v Speaker 3>board and we're sort of, well, I have this company

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<v Speaker 3>and we're experiencing XYZ, this could be helpful. These are

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<v Speaker 3>why my thoughts are this, and I'm giving advice to

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<v Speaker 3>a company. Most of the time my male CEOs will say, hey,

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<v Speaker 3>can you introduce me to that CEO so I can

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<v Speaker 3>learn a little bit more about you know, what you're

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<v Speaker 3>talking about, so I can really understand whether it be

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<v Speaker 3>clinical design or you know, acquiring customers something another company.

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<v Speaker 3>It's very rare that a female will proactively ask me.

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<v Speaker 3>It happens, but you will proactively ask me to make

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<v Speaker 3>introductions for them I have to offer. I will go

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<v Speaker 3>back and look at my rolodex and say who can

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<v Speaker 3>I introduce you to? But they will not proactively ask me,

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<v Speaker 3>as an investor to make introductions for them, which I

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<v Speaker 3>I have some, but that makes a big difference.

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<v Speaker 2>We're gonna let the guy wait. The guy in the

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<v Speaker 2>room want to say, I.

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<v Speaker 1>Just want to ask a question quick. I just want

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<v Speaker 1>to ask a question, Okay, And just you know one phrase.

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<v Speaker 1>The most exciting area you're investing in right.

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<v Speaker 3>Now, ooh, personalizable tailored medtech companies that function very much

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<v Speaker 3>like therapeutics, and their functionality is able to basically shift

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<v Speaker 3>and conform to the anatomy of our human bodies and

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<v Speaker 3>able to really create therapy in a way that only

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<v Speaker 3>therapeutics have been able to do in the past.

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<v Speaker 2>I have to say, I have a niece who's a doctor,

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<v Speaker 2>and she's a good friend that has doctor do and

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<v Speaker 2>they say, it's amazing, like the differences of things that

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<v Speaker 2>aren't done for women in healthcare and medical devices. I'll

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<v Speaker 2>talk to you about it, but it's just the perspective

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<v Speaker 2>of and things that are covered by insurance for men

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<v Speaker 2>versus women. And just Matt talked about it with breastfeeding

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<v Speaker 2>for his wife specifically, and just things you know that

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<v Speaker 2>come problems and stuff that you know there isn't research

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<v Speaker 2>followed for women. So you make such a valid point,

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<v Speaker 2>and you think about the in roads. And I also

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<v Speaker 2>think about if this money isn't going to these companies,

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<v Speaker 2>women who are starting companies like you, think about it,

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<v Speaker 2>if they were allowed to run with it, what kind

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<v Speaker 2>of businesses they would create? What that would mean for

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<v Speaker 2>you know, public companies, market caps, economic momentum, right, job hiring, Like,

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<v Speaker 2>how much we are ignoring at this point.

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<v Speaker 3>There is actually a company that I know that would

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<v Speaker 3>have been a fabulous company, would have changed the trajectory

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<v Speaker 3>of a disease that we all struggle with as women.

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<v Speaker 3>And unfortunately, because the Acquirer spun off their women's health division,

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<v Speaker 3>the technology was shelved, even after they paid a lot

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<v Speaker 3>of money for it, and never made it to market.

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<v Speaker 3>It's really sad.

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<v Speaker 2>That's amazing. That's amazing. Hey, listen, incredible stuff. Come back soon.

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<v Speaker 2>We'd love to continue this conversation with you. I really

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<v Speaker 2>feel like this was a very productive one because I

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<v Speaker 2>feel like it's a topic we've talked about for years,

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<v Speaker 2>but you really got to some of the core of

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<v Speaker 2>the problems. Tusney Doha Dwala, she's founding partner at Excelstar Ventures,

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<v Speaker 2>joining us on Zoom from Boston, really cool conversation.

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<v Speaker 1>Yeah, a lot of cool companies they've invested in. No,

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<v Speaker 1>but data, augmenics and more. This is Bloomberg