Why invest in women?
After a recent acquisition deal that freed up some of my time for new ventures, I thought a lot about where I want to put my focus and energy next. One idea emerged clear and strong: Invest in women.
Why is this meaningful to me and why should it be important to all of us? By investing in women, we can make money, make an impact, and create a better future for everyone.
A huge, untapped financial opportunity
The first goal of most investors is to make a financial return. The data shows that diverse teams perform better and yet, less than 10% of venture capital funding goes to companies with women on the founding teams. Even investors who are purely focused on financial gains, such as Kevin O’Leary from SharkTank, admit that the data favors companies with female founders. Furthermore, women lead consumer spending and having their perspective on a founding team can be invaluable.
It’s projected that women will control 75% of discretionary spending around the world by 2028. (Boston Consulting Group)
I believe in diversifying our portfolio in the truest sense of the word. It’s time to transcend unconscious bias and build a portfolio that’s consciously inclusive of founders from different genders, races, sexual orientations, backgrounds and more.
Venture-backed, women-led tech firms bring in 12% higher revenue than male-owned tech firms. (Kauffman Foundation)
A lack of diversity in many of today’s high growth companies is creating culture problems that are having an adverse effect on the bottom line. We’ve all heard the stories about Uber, Zenefits, and the list goes on. We can address that proactively by building and investing in companies that focus on diverse, healthy, thriving cultures at all stages.
A chance to make a real impact
Technology is creating tectonic shifts in nearly every industry, and the pace of change is accelerating. If we’re going to create a thriving world that is peaceful and just, it’s critical that we have diverse voices at the table defining what we create next and determining our approach. Are we entrusting humanity only to white college men in hoodies? Shouldn’t we have all genders, races and cultures building the future together? Who would want to live in a world in which mothers and grandmothers did not also have a voice?
A woman multiplies the impact of an investment made in her future by extending benefits to the world around her, creating a better life for her family and building a strong community. (USAID)
Diverse teams create better products and user experiences. For instance, here is a recent story about a soap dispenser sensor that doesn’t recognize darker skin tones. Also, when women are not in the room, their needs are often overlooked and mistakes can be made that prove costly and in some cases, fatal. For decades, crash test dummies were only modeled after male bodies and more women were injured and killed in car accidents as a result.
As technology plays a more powerful role in healthcare, and as we add cyber enhancements to humans, what other mistakes will we make if we don’t have diverse perspectives in the innovation sector?
The thesis is simple: by investing in diverse teams now, we stand the best chance of building a prosperous and thriving future for all.
