Fundraising While Female in a #MeToo World

Health IT leaders weigh in on the ethical challenges female founders face when offered funding or support from companies with questionable track records.
By @JennDennard

There’s been no shortage lately of headline-generating, gender-related workplace issues. The Michaels at JP Morgan. The lack of female keynoters at CES. #MeToo. Time’s Up. It seems like the list of companies, events, hashtags and causes could (and likely will) – go on and on.

The gender wage gap is an issue that has strongly resonated with the #healthITchicks community over the last 12 months. We’ve covered it in tweet chats, interviews, and blogs. While 2017 – and even the back half of 2016 – seemed to have its fill of wage gap coverage, things seem to be on a bit of an upswing as far as advocacy for pay equality goes. More and more companies are making efforts to narrow the wage gap. Several female media professionals have abdicated their roles in protest of unfair compensation. Some have taken matters into their own hands with employer-focused class-action lawsuits. Local and regional governments are considering or have passed legislation that prohibits companies from asking about a candidate’s salary history during the interview process – just one contributing cog in the wage-gap wheel. In short, it’s pretty evident that we’ve moved from the phase of identifying the problem to one of action.

But just how much action is warranted? What kind of action is appropriate? Is a blanket approach to dealing with gender-related workplace issues the answer, or is it more nuanced than that? These were the questions swirling around in my mind when I came across two separate stories, both involving Microsoft and Google:

Google, Microsoft grapple with gender inequality lawsuits

Microsoft, Google invest in precision medicine startup DNAnexus

Here we have a startup ready to take on the world but for lack of funding, and along come two of the biggest names in tech – both dealing with wage-gap related lawsuits – ready to invest. Musing over the two headlines prompted me to send out this tweet:

To which I received this reply:

While I appreciated the picture and liked the stat, I couldn’t help but wonder how much attention female founders should pay (or are paying) to the ways in which potential investors/partners treat their female employees. Are pay gaps, sexual harassment cases, parental leave and other female-focused issues becoming a part of the due diligence/investment vetting process? I put the question to several women working in health IT that have advised, invested and/or sought investment.

Defining the New Due Diligence

WebPT CEO Nancy Ham was refreshingly frank: “Today, money is money and most people don’t rock the boat while raising.” Ham, who has also held C-suite titles at Healthagen and MedVentive, has a few fundraising rounds under her belt. She advises today’s capital-seeking female founders to ask potential investors these questions:

  • Does the target VC firm have any female partners or VPs?
  • How many of their portfolio companies are led by female CEOs?
  • Did they fund them at the same level?
  • Where is the pay of their female portfolio company CEOs compared to their males?

“Basically,” she adds, “you’re trying to determine whether there’s bias – conscious or not – that you should be aware of.”

Til Death Do You Part

Lisa Suennen, senior managing director for healthcare at GE Ventures, managing partner of Venture Valkyrie and founder of CSweetener, echoes Nancy’s vetting wisdom. “With respect to female entrepreneurs, I would absolutely want to know the views and reputation of my venture investors on this issue. To be fair, those that are not committed to diversity are less likely to invest in female-led companies. But, I always tell entrepreneurs that taking on an investor is like taking on a spouse – you are going to spend years and years working with them through good times and bad, so you better have a common commitment to the things you care about.”

Lisa also points out that, to the credit of companies like Microsoft and Google, the venture teams of large companies aren’t always of the same mind as their corporate overlords. “One has to be focused as much on the individual venture partners as on the bigger company … and be sure that the venture team shares your values.”

The PR Angle

Jen Bonnett, General Manager of Georgia Tech’s Advanced Technology Development Center, gave me more food for thought when she suggested that companies who are attempting to climb out of a PR nightmare related to gender inequalities may be even more amenable to investing in female-led startups because of the boost it will give to their damage control. It’s an interesting angle, especially if new leadership has been installed that seems committed to doing the right thing.

As Bonnett further explained, and I suspected all along, there is no blanket approach to looking at potential investors through a gender-related lens. One can only hope that today’s headlines will impact tomorrow’s investment decisions. Money talks, but ethics (or lack thereof) stay with you forever.

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