Written by: Birgit Thumecke | Eventerprise
Experts are now attributing many of the traits that make investors successful as naturally belonging to women. Despite this, female venture capitalists still make up only 11% of the industry and only 7% of partners in venture capital firms. In fact, just 38% of the top 100 venture firms have even just one female employee. Prominent women in tech and entrepreneurship are looking at these numbers and calling attention to the differences men and women bring to the table when it comes to investing:
“In my life, I have come to believe there are inherent biological differences in men and women that allow each to thrive in their own way. Increasing the number of female investors isn’t just about equality. We need more female investors who have the desire and self-belief to make an impact in this industry. We also need more men who see the inherent value that women bring in terms of collaboration, their ability to analyze a business and evaluate risk, create lasting impact, and contribute to the overall success of both male and female entrepreneurs” — Jessica Robinson, CEO of PurePoint International, in Startups.co.
Women don’t just grow the profitability of venture capital, they push the industry in new directions. To describe the impact of this trend, Robinson identifies the top 5 traits that make women effective investors.
1. Women see beyond the obvious
In other words, women don’t just invest in traditional industries. That’s one of the reasons we’re so interested in the impact of female investors at Eventerprise, where we seek to revolutionize the events industry — a female dominated arena. Furthermore, female VCs are more willing to be flexible in what they look for due to their own challenges with work-life balance. While a male investor may be turned off by strong family commitments, a female investor might make less assumptions regarding the connection of prioritizing family and being less interested or available to work.
2. Women take more calculated risks
It’s one thing to take risks. It’s another matter to assess decisions carefully before taking action, a trait that is important if not crucial in making smart investment moves. In a venture capital team of all males, having a woman on board can make the difference between sinking the ship in a rash investment decision and staying on a steady course.
3. Women invest more in other women and minorities
Like we said, women are changing the game when it comes to venture capitalism and investments. While male VCs generally invest in the people that look like them, women are more likely to pursue diversity when making investment decisions. Likewise, having a female VC makes start-ups much more profitable and increase chances for successful exits.
4. Women investors are more collaborative
While women might not belong to the “old boys club,” their social circles tend to be much more meaningful in nature. This leads to better collaboration, as well as investment opportunities that solve real problems rather than those that benefit those who are “in-the-know.”
5. Women know the long-term goal
Venture Capitalism is changing, new social and environmental impact dimensions have been added, and these companies have female investors to thank. While men tend to prioritize short-term fiscal profits, women tend to seek longer-term goals that change the game in regards to how we define profitability. The new movement to measure return on investments based on social, and not just financial impact, has been headed by female VCs, and it’s undoubtedly led to the CSR movement that’s been sweeping the business world.
The best investment firms are the ones that have diversity of thought, employing both female and male venture capitalists. There’s no question that as more women enter the playing field of VC, they’re driving dynamic change in how we think about profitability, smart investments, and future trends. That’s why Eventerprise is so interested in the increasing number of female VCs in the field of investment.
Related: Attention Venture Capitalists: Are Women and People of Color on Your Radar?