Why Aren’t There More Female Entrepreneurs
By Mark Suster (General Partner, GRP Partners)
I’m often asked the question about why there aren’t more women who are entrepreneurs. On my blog I’ve been hesitant to take the topic head on. Somehow it seems kind of strange for a man to answer this question that obviously comes from a man’s point of view.
But last week I noticed a blog post by a woman, Tara Tiger Brown, that asked the question, “Why Aren’t More Women Commenting on VC Blog Posts?” [it's short, you should read it]. In it she observes that only 3% of the comments on this blog are from women. I would love to see Tara follow up with blog posts on: why she believes this is the case & what we can do about it.
The truth is I have been thinking a lot about the topic, I just haven’t been writing about it. And when asked about the topic, I definitely don’t shy away from the topic as you can see in this 8-minute YouTube interview that Pemo Theodore asked me to do on the subject of Women in Entrepreneurship.
She also does a WONDERFUL 9-minute collage of the best-and-brightest in our industry talking about the topic. Please watch this. She has a quote from literally every major VC from whom you’d want to hear. Every single one. And many of the best women founders.
My inspiration to become an entrepreneur came from my mom, not my dad. She was the dominant figure in my family and was both an entrepreneur and a community leader. She opened a bakery and a restaurant. She was president of the UJA (United Jewish Appeal). She bought our first computer -– an IBM XT with a 10MB hard drive -– in order to do her books electronically. It’s how I learned to build spreadsheets. She encouraged me to get a job when I was 14. She encouraged me to take acting classes as a child, which gave me confidence as a public speaker.
I love my dad equally, of course. But he was a doctor and a long-distance runner and cared little about business.
So the role is a strong woman leader has always been a comfortable idea for me.
Even more interesting is that at GRP Partners (the VC firm where I’m a partner) our two most successful returns from our previous fund [which is ranked as the top performing fund in the country for its 2000 vintage according to Prequin] were both run by women!
But then the truth sets in. My guess is that probably only 2-3 out of every hundred pitches I receive are from women. This certainly isn’t anything conscious on my side. It’s just the facts.
I’ve tried to ask some strong women whose opinions I greatly respect what can be done about it as a way to get to answers without my having to weigh in directly. That’s the basis of this awesome discussion with Joanne Wilson, aka “the Gotham Gal”. But given her background as a successful salesperson and entrepreneur I didn’t want to make the whole discussion about women.
The thought that I keep returning to in my head is that the future is likely to be much better for female entrepreneurs than that past has been. At least that’s my hope. We need to start encouraging it in our youth. In colleges. In recent grads.
The genesis of my thinking came from my discussion with Joanne. She noted that in our generation everybody wanted to be a lawyer. Perhaps it’s because everybody used to watch LA Law. But this coming generation is much more likely to be inspired by The Social Network and want to be entrepreneurs.
The environmental factors are likely to have an even bigger positive impact than just the inspiring movie.
In my post on what has changed the venture capital industry more than any other factor, I talked about Amazon.com’s role. AWS helped lower the cost of starting a company by 90%.
When I started my first company at 31 year’s old I had to raise at least $5 million. The infrastructure alone cost $2.5 million to launch a SaaS software company and we took $2.5 million in costs over 18 months to launch our products. On AWS and with open source you can achieve amazing results for $500k. Heck, you can launch your company if you’re a developer for $50,000.
And I believe these price points are pushing entrepreneurs to start at a much younger age. I plan to write about this phenomenon soon. But think about it -– if you only need to risk $250,000 as an investor (or $50,000 across 5 people) to get an entrepreneur started then why wouldn’t you back younger teams [in addition to more experienced ones.]
So I’m increasingly seeing entrepreneurs getting funded at 22. At 20. Even at 18. The latest entrepreneur who has been pitching me, Shahed Khan, is only 16! And truthfully he’s pretty impressive.
Ane more groups are focused on furthering this cause. You have “Teens in Tech” founded by Daniel Brusilovsky. You have the super impressive Cory Levy who founded the NextGen Conferences (as well as One, Inc.)
Back to women.
If women can get funded to run startups at 22-25 then they can get well into their experiences as entrepreneurs before having to navigate the tricky years of balancing being a mommy with running a company. If your first chance at being a startup founder coincides with your first child it’s really difficult for either gender. But for women it’s probably even more challenging.
I speak a lot on college campuses. My crusade has been to correct my biggest mistake as an entrepreneur: That I didn’t start younger. I talk about the minuscule costs of starting a company these days. I talk about the benefits of real world experiences over paying money to get advanced degrees but I still believe fervently in undergraduate education for most (but not all).
And I talk about women. And why starting young isn’t as scary as it once was.
Peter Thiel started the “20 Under 20? program to encourage young, talented people to give entrepreneurship a shot. Perhaps somebody will champion a similar initiative to get more young women funded straight out of college to start to reverse the trend and help lead our next generation of innovation.
This post was originally posted at Both Sides of the Table.
Editor’s note: Got a question for our guest blogger? Leave a message in the comments below.
About the guest blogger: Mark Suster is a General Partner at GRP Partners, a Los Angeles-based venture capital firm. He joined the Dark Side (AKA venture capital) after selling his company to Salesforce. Mark focuses on early-stage technology companies. He blogs at Both Sides of the Table. Follow him on Twitter at @msuster.