Be it sexism, racism or ageism in the venture capital industry – both among the ranks of the professional investors and among the companies in which they invest – there is no louder or better-known critic these days that former Triangle entrepreneur Vivek Wadhwa.
He entered the lions’ den on Wednesday at the National Venture Capital Association’s annual conference and delivered his characteristic no sacred cows barrage of criticism.
To his surprise, he wasn’t hit by a rotten tomato. In fact, he was – to his surprise – applauded.
“I just gave two talks at the National Venture Capital Association’s big event, VentureScape. I had feared that the VCs would lynch me for calling them out for sexism, racism, and exclusion of the old,” he writes in an email to colleagues. “Yet I received applause and strong support from thevast majority of the attendees as well as the NVCA leadership.
“They acknowledged that there is a problem and want to do something about this.
“Needless to say, I was caught off guard.”
I followed up with some questions to Vivek about the event, but he was between flights, heading to another speaking engagement.
Noting that he didn’t speak from prepared remarks (“Off the cuff” should be his middle name), Wadhwa did point to a blog by Boston venture capitalist Jeff Bussgang that provides a summary Wadhwa describes as “very good.”
The Grim Statistics
Bussang was a panelist along with Wadhwa, three women investors and the CEO of Veracode. The primary focus was the lack of female representation among VCs and in investment startups.
“Wadhwa kicked things off with a recitation of some research in the area,” Bussang writes. “Specifically:
- “Only 3% of all tech firms are started by women, although venture-backed companies led by women perform equally well if not better.
- “In an HBS research study, it was shown that – all else being equal – investors prefer backing men over women (and good-looking men over less good-looking men): a male founder is 60% liklier to secure financing from investors.
- “Emory University research which showed that founding teams with women were less likely to attract VC funding.
- Newsweek’s cover story this week is titled “Women entrepreneurs fight for their piece of the pie” and shares some of the posts going around on Secret that depict the bad behavior of VCs in pitch meetings with women.
- “A data point I didn’t get a chance to mention during the panel is that only 9% of all HBS case study protagonists are women – something the dean has identified as an issue and has stated a public goal of getting to 20% (I have consciously tried to address this in my entrepreneurship class, where 40% of the protagonists are women and more than half of the panelists I bring in).”
Shocking stuff – and unfortunate.
But Bussang writes about much more in the blog post. It’s highly recommended reading, especially for stuffed shirt VCs who need sensitivity training.
Want more? Wadhwa points to a Wall Street Journal report about the same topic in which he cites “laziness” as the reason for the lack of adversity.
The Bussang post is available at his website and the WSJ piece is in the venture capital blog.
WRAL TechWire has run numerous stories from Wadhwa about these issues, as you can see by checking the links listed with this story. He’s also one of our Insider contributors.
With people such as Wadhwa leading the charge, there is hope for change in tech, from investor ranks to startups.