Callout Corner, Staff Soundoff
STANDING TALL where an old-growth forest once took root is the world’s most concentrated group of venture capital firms. Sand Hill Road investments sprang the likes of Facebook, Amazon, Twitter, Instagram, and Microsoft. In other words: This is where white men—informed only by the opinions of other white men, of course— come to get their very best ideas funded. “Now, now,” you might say. “Is it really just white men who leave with clear eyes, full wallets, ready to lose?” Yes, actually, it is: 89 percent of projects funded by venture capitalists are led by men and, worse, 76 percent are led by white men. In 2017, women-led projects received just 2.19 percent of all venture capital funding. And— back to the “ready to lose” part we snuck in earlier—just 1 percent of venture-backed companies will end up earning more than a billion dollars. In fact, most venture capitalists approach investment from a mindset of thirds: A third of investments will be a total loss, a third will return the principal amount invested, and a third will do so well that they’ll make up for the underperformance of the others. It might seem as if we’re getting into the weeds here, but the “risk tolerance” threshold is important. If you bring up the venture-capital-is-sexist-as-hell issue at a party, you need to be ready for all of the “Women just don’t have the same risk tolerance as men, and startups are a highrisk environment” comments. But that brings us to our point: If you ask a venture capitalist why their investments tend to go toward people named Jeff, Mark, Jack, and Bill, you’re going to get one pretty simple answer: We have a duty to our investors to return a profit. In other words: “I’d make more equitable investment decisions if I could guarantee that women-led startups would fail at the same rate as those led by men.” It’s not up to them, they’ll say. It’s up to the numbers. Unless venture capitalists—just 7 percent of whom are women themselves, by the way—are willing to offer the same risk tolerance to women-led companies, we’re just going to end up with more Facebooks and Amazons on our hands. You know, the same kinds of companies that might make you billions but will cost you a democracy.