Why ven­ture cap­i­tal firms are fi­nally hir­ing women. Plus: A haunted house gets into its cus­tomers’ heads; and the Jarg­ona­tor

It’s taken a se­ries of scan­dals to get ven­ture cap­i­tal firms to (fi­nally) hire fe­male part­ners.


The ven­ture cap­i­tal in­dus­try, which last year doled out $84 bil­lion to star­tups, man­ages a neat trick. While rel­a­tively new—and de­voted to seek­ing out what’s next for busi­ness and the world—it’s as old-fash­ioned as it gets, com­pris­ing over­whelm­ingly male, over­whelm­ingly white part­ner­ships who over­whelm­ingly do busi­ness with those who re­mind them of their younger selves.

As of last year, at the top 100 ven­ture

firms, only 8 per­cent of in­vest­ing part­ners were women. Two per­cent of ven­ture cap­i­tal­ists were His­panic. Not even 1 per­cent were black. And al­most a quar­ter of VCs with MBAs got those de­grees from Har­vard.

But some of that is fi­nally chang­ing. In Septem­ber 2017, Gen­eral Cat­a­lyst hired its first fe­male man­ag­ing part­ner. Union Square Ven­tures, First Round Cap­i­tal, and FirstMark Cap­i­tal soon fol­lowed. This year, BoxGroup, Red­point Ven­tures, and Bain Cap­i­tal did the same. In June, An­dreessen Horowitz hired Katie Haun as a gen­eral part­ner to run a new $300 mil­lion cryp­tocur­rency fund; in July, it pro­moted Con­nie Chan, an ex­pert on the in­ter­sec­tion of Chi­nese and North Amer­i­can tech, to gen­eral part­ner.

A hand­ful of brand-name ap­point­ments won’t change an in­dus­try overnight. Be­ing the only woman on an all-male team is gen­er­ally not fun, and re­search shows that one woman on an oth­er­wise all-male pub­lic-com­pany board won’t make much dif­fer­ence. (For that, you need three; there’s lit­tle rea­son to think ven­ture cap­i­tal is dif­fer­ent.) And some women VCs ad­mit they are re­luc­tant to in­vest in women. They know that if that in­vest­ment goes south, it’ll be dou­bly dif­fi­cult to get sup­port for the next fe­male team. Still, “three or four years ago, 75 per­cent of the ven­ture funds in Sil­i­con Val­ley did not have a woman part­ner,” says

Tr­ish Costello, the founder of in­vest­ing plat­form Port­fo­lia. “Ev­ery one is now look­ing for one.”

All this didn’t hap­pen be­cause new data showed that di­verse teams per­form bet­ter. Such teams have long been known to process facts more care­fully and be more in­no­va­tive than ho­mo­ge­neous teams. Ac­cord­ing to McKin­sey, com­pa­nies in the top quar­tile for gen­der di­ver­sity are 21 per­cent more likely to have aboveav­er­age prof­itabil­ity than com­pa­nies in the bot­tom quar­tile. And com­pa­nies whose lead­ers are at least 30 per­cent fe­male have net mar­gins 6 per­cent higher than com­pa­nies with no women among the se­nior ranks. Ven­ture cap­i­tal­ists pride them­selves on be­ing data- driven, but this data ap­par­ently didn’t con­vince. What did?

Rewind to June 2017, when six women said they had faced in­ap­pro­pri­ate advances from Justin Cald­beck, the co-founder and man­ag­ing part­ner of Bi­nary Cap­i­tal, which had $300 mil­lion un­der man­age­ment. Ac­cu­sa­tions quickly fol­lowed against Dave McClure, co-founder of 500 Star­tups, and, among oth­ers, Steve Jurvet­son, the co-founder of DFJ. Five years af­ter Ellen Pao sued Kleiner Perkins, six months af­ter Su­san Fowler left Uber, Sil­i­con Val­ley women were squarely in the mid­dle of #MeToo.

As were Sil­i­con Val­ley men. Bi­nary Cap­i­tal col­lapsed. McClure lost his job. So did Jurvet­son. “This was one of the first times there were real con­se­quences to bad be­hav­ior,” says Jess Lee, a Se­quoia Cap­i­tal part­ner and Polyvore co-founder. “For the first time, you had firms fall apart.”

Ven­ture cap­i­tal­ists in­sist that they didn’t mean to build bro­topias. It’s just the pipe­line, don’t you see? The pipe­line the­ory in­sists suc­cess­ful ven­ture cap­i­tal­ists need to have been tech wizards or suc­cess­ful founder- CEOs—prefer­ably of com­pa­nies that made truck­loads of money for other ven­ture cap­i­tal­ists. Trag­i­cally, the ar­gu­ment con­tends, there just aren’t many women who meet those qual­i­fi­ca­tions. (Of course, with less than 3 per­cent of ven­ture cap­i­tal go­ing to fe­male CEOs, it’s not en­tirely sur­pris­ing that there are so few women with nine-fig­ure ex­its.)

But af­ter Bi­nary Cap­i­tal im­ploded, those all­male part­ner­ships started to look sin­is­ter. Why couldn’t these well-con­nected men find a single wor­thy woman? More cru­cially, firms started wor­ry­ing. If Bi­nary hadn’t been all-male, would Cald­beck have got­ten away with such bad be­hav­ior? (His part­ner knew about his rep­u­ta­tion.) What if a ven­ture cap­i­tal­ist who thinks he’s done noth­ing wrong loses his firm be­cause the party-boy part­ner ev­ery­one loves to have around be­haves abom­inably to­ward a woman who’s sick of tak­ing it?

And sud­denly, women were get­ting hired. Maybe you didn’t have to have an engi­neer­ing de­gree or a founder’s pedi­gree to have the mak­ings of a good VC af­ter all. “I’m not tech­ni­cal,” pro­claimed Sarah Tavel, upon be­ing hired as gen­eral part­ner by Bench­mark, al­though she’d man­aged tech teams at Pin­ter­est and spent six years at Besse­mer Ven­ture Part­ners. Cather­ine Ul­rich had been chief prod­uct of­fi­cer at Shutterstock and Weight Watch­ers be­fore she be­came the first fe­male part­ner at FirstMark. Sarah Smith, the first fe­male part­ner at Bain Cap­i­tal, had pre­vi­ously been an early-stage in­vestor and a vice pres­i­dent at Quora.

As it turns out, maybe the pipe­line of those with im­pres­sive experience build­ing prod­ucts, lead­ing teams, and pro­duc­ing se­ri­ous re­sults was al­ways a lot broader than the old guard thought. Maybe those new fe­male part­ners will knock it out of the park. And maybe—af­ter many years of bad be­hav­ior and short­sighted in­vest­ment the­ses, and af­ter a very re­cent spasm of fear—one of the last re­doubts of the old boys’ net­work will fi­nally be­come a bit more mod­ern.

Like Sil­i­con Val­ley was al­ways sup­posed to be.

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