$1 Billion to Expanding Women’s Power
By Nicole Casperson
Behind every great man is a great woman.
But for Melinda French Gates, behind was no longer cutting it.
Still, co-chair of the Bill and Melinda Gates Foundation, which she co-founded 20 years ago, she has recently turned her attention toward issues facing women domestically.
Billionaire-philanthropist, two words you don’t hear together often.
From her seat at Microsoft, Melinda had a bird’s eye view of the systemic challenges facing women and girls trying to make it in her industry and adjacent ones.
From the start, a lack of funding for female and minority founders is deeply rooted in venture capital’s foundation as the VC world cemented its success around white & male-dominated companies.
And I’ve covered the origin of tech’s diversity problem, which has centered around a formula for “success” created decades ago by early venture capitalists that were inherently against diversity in founders.
That formula still impacts how money (or lack thereof) flows to women.
According to PitchBook, in 2021, women-led companies’ funding stayed at around 2%.
In other words: A b y s m a l
In fintech, we rely heavily on venture funds to keep up with new opportunities and recognize emerging financial success stories despite unconscious biases.
Unfortunately, they’re not doing a great job.
Venture capital investment remains the tech ecosystem’s least diverse domain.
- White and Asian men make up 78% of those responsible for investment decisions and manage 93% of venture dollars overall.
- While there are now more female-led investment funds than a few years ago, most venture capital firms still have zero women as general partners or fund managers.
- Of the few women in these roles, nearly all are white.
- The US venture capital industry invested a record-breaking $329 billionacross more than 17,000 deals in 2021.
- Only 2% of this went to startups founded solely by women—the lowest level since 2016.
- Less than 0.004% of the venture capital invested in the first half of 2021 went to startups with Black female founders.
And the lack of other women around Melinda at the winner’s table confirmed the story these sobering statistics told.
Sick of hearing women from Senegal to Silicon Valley echo the same story of men telling them their businesses were too risky to invest in simply because they were women, Melinda took action.
That action came in the form of Pivotal Ventures.
In 2015, Melinda French Gates founded Pivotal Ventures to improve women’s lives in the United States through investing and advocacy.
In 2019, she put $1 billion of her own money into the organization, to be spent strategically over 10 years.
*We love a billionaire who believes that improving women’s lives is core to solving any social problem.*
That $1 billion investment is committed to expanding women’s power and influence in the United States.
Melinda accompanied this announcement with an essay in Harvard Business Review outlining Pivotal’s strategy to position more women in the US to makedecisions, control resources, and shape policies and perspectives.
To achieve its mission, Pivotal’s focus areas include:
- Women in tech
- Women and girls of color
- Women in public office
- Paid family and medical leave
- Mental health for young people
Nothing about that list screams average venture capital fund to me.
The 90-person firm has already invested hundreds of millions of philanthropic and VC dollars in over 150 organizations.
All are targeted at funding women/POC founders in the key areas of tech, finance, media, and politics.
Fuck yeah, pardon my Melinda French.
Aside from investing in for-profit and non-profit companies, Pivotal Ventures also funds advocacy work and pursues a diverse array of strategic partnerships.
This is how Melinda’s dollar is moving the needle further, faster.
The organization also:
- Supports bipartisan efforts for federal paid family and medical leave policies
- Invested $65 million in groups that work toward ^ since 2016
- Invested $50 million in the Gender Equality in Tech Cities initiative, supporting more inclusive tech hubs
The Gender Equality in Tech (GET) Cities is an initiative designed to accelerate the representation and leadership of women in tech by encouraging emerging tech hubs across the US to prioritize gender equality.
GET Cities now operates in Miami, Washington DC, and Chicago.
Do you know how I am always talking about diverse founders not having enough access to funds?
This is what changing that looks like.
In the words of her organization’s website, “more power into the hands of more people is always the goal.”
With her net worth estimated at $6.3 billion, Melinda could do anything she wanted.
Every day she wakes up and chooses to do as much good for as many people as possible, despite any adversity she may be facing personally.
Like a true queen.
She doesn’t care about rebuilding Silicon Valley; she’s building something newinstead.
And we are all here for the reconstruction.
We can all take action, too. Here’s how.
Sure, there aren’t many women writing venture checks and we aren’t all billionaires. For example, female VCs hold just 15.4% of general partner positions in the US.
But should the responsibility of gender equity in VC solely rest on the shoulders of women?
We need men to be a part of the change, too. By that, I don’t mean excluding men, but whole-heartedly including them because a rising tide lifts everyone. And horizontal oppression solves nothing.
Yes, most partners at VC firms are white men, and research shows investors are 21% more likely to back founders that look like them.
And so, when you bring in diverse founders approaching problem-solving from an entirely different direction, it doesn’t resonate with them.
Fintech companies that aim to reach consumers underserved by traditional financial institutions, including women and people of color, are not set up for success when the lack of VC available to diverse-founded fintechs is so severe.
It’s troubling as it hinders innovation that would inherently benefit underserved consumers.
Not only does the lack of investor and founder diversity in venture capital and fintech determine who gets rich. It also shapes:
- The kinds of problems fintech companies set out to solve,
- the products they develop,
- and the markets they serve.
But guess what? You don’t have to be a billionaire to be a force for good. So despite the disparities, some VCs are working to bring more opportunities to female and diverse founders.
Senofer Mendoza, the general partner at Mendoza Ventures, proves that intentional inclusion at a firm’s core is 1. Possible, and 2. Profitable.
Laura Moreno Lucas, a partner at L’Attitude Ventures, raised more than $100 million to invest in early-stage companies founded or run by U.S.-based Latino entrepreneurs. (Learn more about that here).
Amy Nauiokas, the co-founder and co-CIO of Anthemis, has dedicated its firm to investing in diverse founders – especially women and women of color. (Learn more about that here).
Remember, our impatience with the status quo is fueled by optimism that progress is always possible. These women are a testament to that.
Ready to start creating change? Here are 3 steps VCs can take today to make their investment portfolio more diverse and innovative.