Reframing power and perspective for gender-equitable VC investing

I attended the Rafflesian Women’s Conference 2021, themed “Unleashing the power within” recently. Listening to both the male and female speakers led me to a mini epiphany about how, as females, we have been lamenting about gender inequality with an almost “victim” mentality.

What if, part of the solution actually lies in us evolving our mindset? What if we could simply rise up and take charge? Perhaps, there is no shame in gaining and wielding power and embracing who we are in the workplace.

What does power mean in VC investment?

The word “power” instinctively conjures the mental image of an external force that is bestowed or taken away, that in turn provides control, dominance and authority over others. Somehow when females are powerful in that type of way, she is criticised as a ‘bitch’ or unlikeable.

Throughout history, powerful female leaders like Empress Wu Ze Tian had been criticised and even “demonised”. This may be the reason I never really found having that sort of ‘power’ to be admirable.

But my perspective shifted when I heard my managing partner, Chua Joo Hock, speaking on the panel. I found it incredibly refreshing when he defined power as such:

“Power is the ability to influence and impact with purpose… influencing outwards from where you stand and who you are.”

That’s not the usual definition of power I’m used to hearing but it does make sense. We can exude and wield power from a more feminine sense, from within.

Many of the female speakers shared that women leaders often face an internal struggle between appearing more masculine and domineering to be accepted by their male peers, versus embracing their feminine, more collaborative and empathetic selves.

Also Read: A woman among women: 27 female-led startups in SEA that are going places

What if we reframe Power?

Perhaps, as females, if we reframe the definition of power the way Joo Hock has defined it, we would find it easier to embrace our strengths and step up as more powerful leaders in our own arena.

This means listening and recognising someone else’s point of view (his or her truth), connecting my purpose to their motivations, and focusing on winning together.

Where conflicts arise within the team, one should try to understand the behaviour of the other person and where they are coming from, diffuse any misunderstanding and provide a safe environment for discussion. We can let our shared purpose be the guide, and let the best idea win via ‘coopetition’.

Rather than silencing others with my truth as the truth or my way as the way, getting the team’s buy-in through command or compulsion, and then ending up having to tell them what to do, I would rather be a leader who communicates a strong purpose in a non-threatening and authentic way and galvanises a team to strive hard and take the initiative without being told.

This force-multiplying effect of the power to influence and impact with purpose adds to the foundation of the team’s technical ability, performance, skill and experience.

What if our weaknesses are our strengths instead?

Based on a World Bank report, Female entrepreneurs: How and why are they different, the narrow definition of success that highlights only economic motivations for entering entrepreneurship tends to better fit the male model, whereas women tend to also focus on non-economic factors, such as personal fulfilment and a desire to serve the community. Our acts of voluntary attending, if aligned towards a personal north star, become very powerful indeed.

People-pleasing is found to be more commonly present in women than men, in part due to reinforced normative gender roles and their associated behaviours. However, the way we are wired as females made us more empathetic and collaborative.

As a leader, we tend to influence outcomes.

We would help our employees feel heard instead of just faceless, replaceable parts of a profit-generating machine. Soft influencing, including rational persuasion, inspirational appeals, consultation, and personal appeals, can help to build a coalition of the willing to work towards a goal.

Also Read: Investing with gender lens: Proven strategy to achieve 2x+ in returns

I was inspired by the female panellists’ sharing of the journey they went through to get to leadership positions and then choose to lead differently yet effectively from their male counterparts in the male-dominated industries they worked in.

In particular, the sharing by Virginia Tan and Shiyan Koh, both female VC leaders, drove me to think more deeply about how as investors, we have the ability to drive more gender-equitable VC investing.

Why are there so few women in leadership roles in tech

Being an investor in the technology sector, this question has been weighing on my mind: why are there so few women in leadership positions in technology companies?

Globally, 28 per cent of tech roles are held by women. In Singapore, this number looks better, standing at 41 per cent.

However, women occupy less than one-fifth of spots on the boards of directors at tech companies.

The lack of female top leadership in technology companies today is in part due to fewer venture-backed female-founded technology start-ups decades ago.

Luckily, the total number of VC-backed tech startups with a female founder globally has grown from 410 companies in 2009 to more than 2,700 in 2019. While access to opportunities, funding and support has improved for women in the startup space, there is still a long way to go.

This year, only 2.2 per cent of capital invested into venture-backed startups in the US went to startups with all-women founders. If we look at startups with both male and female founders in the US, this percentage increases to 15.6 per cent.

In Southeast Asia, the percentage of capital invested into venture-backed startups with all-women founders is a staggeringly low 0.9 per cent.

Also Read: For the startup ecosystem, profitability is a gender equality issue

Women have been labelled the ‘weaker sex’ for generations— not just physically, but mentally as well. As a result, women entrepreneurs have been seen as less ambitious and less focused on potential gains, and often face subconscious biases about their marital status and children, which may be considered limiting factors for company growth.

As VC firms, we are in a position to influence and lead change

At Vertex Ventures Southeast Asia and India, we frown upon such gender stereotypes in favour of merit. We recognise that women are just as capable as men in leading startups, and hence we invest in both men and women-founded startups.

In fact, 30 per cent of our current portfolio companies have at least one female co-founder, which compares favourably to other venture firms.

According to this recent Crunchbase article, 22 per cent of deal counts of male-only founded US venture firms were female-founded startups, while this percentage stands at 28 per cent for female-founded venture firms.

Female-founded startups that we have backed include Sunday Insurance, Tickled Media and Janice Wong Holdings, just to name a few.

Our conscious effort to judge on merit alone is also reflected in how we run our fund internally. Around half of our investment team are female (myself included).

That is not because our managing partners have a need to fill a certain gender quota during recruitment, but rather because when they hire, they interview equally large groups of female and male candidates and decide who the best person is for the job.

It is also worth pointing out that we are one of 12 firms that have one or more female partners on their investment teams, out of 34 VC firms that are active in Southeast Asia.

Ultimately, women in VC like myself and women founders I have met are not asking for special treatment. We simply want to compete on an even footing with our male peers.

Gender diversity also makes good business sense

I find that gender diversity in our portfolio companies is a strength.

Also Read: How this SEA VC is rising to the challenge of gender inequality

First, in a traditionally male-dominated tech sector, women in tech tend to be able to design products for an audience that the men may find difficult to design for.

This is the most obvious within FemTech and the SheEconomy, but also applies to designing products for the elderly, children and patients, where feminine instincts to nurture, protect and care can translate to user experiences that are more friendly for the technology end-consumer.

Second, businesses founded by women have been observed to deliver higher revenue— more than twice as much per dollar invested— than those founded by men, making women-owned companies better investments for financial backers. This is also why microfinance lends proportionally more to female borrowers.

Lastly, a growing body of evidence shows that organisations with a higher percentage of women in leadership roles outperform male-dominated companies.

The advantage of having diverse and unique viewpoints often contribute to higher levels of innovation-driven revenue, and allows the company to be built on an inclusive and strong foundation, including factors like fair employment, equal pay, and a participative culture.

There is a clear gap in funding for women-led startups. At the same time, female founders deserve to be funded for their unique talent and strengths, not their gender. I look forward to a future where there are no male or female entrepreneurs, but just entrepreneurs.

At my VC fund, we will continue to open doors and empower founders, whether they be male or female, to reach their own vertex — the highest point of a journey, of achievements and of stars.

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