FairFunders wants to call time on gender bias & sexual harassment in venture capital

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  • Three months before lifting the lid on Harvey Weinstein’s behaviour the New York Times published a similarly hard-hitting series of allegations that sent shockwaves through Silicon Valley.

    The Information also reported ontech investor Justin Caldbeck's “unwanted and inappropriate advances” toward women, which in turn sparked the co-founder and Executive Chairman of LinkedIn Reid Hoffman’s #DecencyPledge blogpost.

    There’s widespread recognition that change must occur - and that means calling out and correcting gender and institutional bias.

    FairFunders is a not-for-profit organisation that’s been set up to create a safer, more inclusive business environment by helping female and underrepresented entrepreneurs gain access to capital.

    Established in San Francisco’s Bay Area in July this year, FairFunders aims to produce an open, transparent database for global users to rate and review experiences with investors. This, they say, will inject some much-needed accountability into the investment process.

    FairFunders co-founders Samantha Friedman, Layla Sabourian and Kiki Mwiti say they came together as a direct response to “inappropriate behaviour” within the tech industry.

    “We have heard how female founders have been mistreated when looking money for their start-ups. We felt that we needed to do something about it,” says Samantha Friedman.

    A Diversity VC report says women represent just 13% of decision-makers in UK venture capital, and almost half of all firms have no women in their investment teams.

    The result is bias - conscious or unconscious - that infects organisational decision making. According to PItchbook research, companies with all-males founders received $58.2 billion investment last year. Whereas women received $1.46 billion - or just 2.5% of the male total.

    And yet First Round Capital’s analysis of their own investment decisions over the past 10 years concludes that companies with a female founder performed 63% better than investments with all-male founding teams. Addressing the gender gap is both ethical and profitable - Women’s Venture Capital Fund and The Helm launched female-focused funds in the States last month.  

    Kiki Mwiti says FairFunders “is trying to attack the problem from a variety of ways - from the new grading system we're developing through to creating opportunities for founders to connect with investors”.

    “There is a lot of unconscious bias which goes into how you are perceived as a businesswoman. It is a reality and often some people just don't know that they are acting in this way,” she says.

    Layla Sabourian says: “I gave a talk recently and two women told me afterwards that a VC had asked them ‘what will happen when they want to have kids?’ And ‘what's going to happen when you meet Mr Right and get married?’ So there is a lot of bias.”

    Each month the group publishes a 'FairFunders List' of firms that are "committed to the cause of diversity, inclusion and transparency [and to] making a consistent and determined effort as to improve venture capital". The rating system - which was devised by FairFunders co-founder Melissa McCool - is being upgraded at the moment and is slated for launch early next year.

    The organisation also delivers a series of workshops called ‘Founders Access to Venture capital Events’ (FAVE). These are free events that are also streamed online, so Northern Ireland-based entrepreneurs can access the content and engage with other members. The next FAVE takes place on November 15 - for details on this and other upcoming events follow this link.

    “For FAVE, we get a small group of female and underrepresented male founders together alongside an investor. We discuss with them what's going on in the industry regarding diversity, what they’re doing to change it and various aspects of fundraising,” says Samantha.

    “I think it's a nice way to introduce founders to an investor and make introductions.”

    Companies, including a major banking organisation, have approached FairFunders to develop executive and staff programmes.

    Ultimately the aim is to see FairFunders being adopted as a platform for founders anywhere in the world either going into fundraising or seeking follow-on funding.

    “I'd like to see people around the world logging onto our platform and using the resource to research their industry funders, understand what level of funding to go for and look at deal-flow within their industry,” says Layla.

    According to Samantha: ”By the end of our first year in operations, I would like to see some evidence that our efforts are moving the needle to the positive and that we are having some positive impact on the industry. That means females and underrepresented founders increasing their ability to raise funding and for female voices to be more visible.”

    To find out more about FairFunders and to register for a FAVE information session, log on to http://fairfunders.org/

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