Male Angel Investor Declares He Will Only Invest In Startups With Female Founders

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A conservative estimate of the number of female-founded startups that successfully secure funding, vs male-founded ones sits at below 10%. In a study that looked at over 6000 tech companies between 2011 and 2013, less than 3% of those companies had female CEOs. The same study analyzed data looking at different cities, claiming more women were getting funded in New York and San Francisco, but no matter which way you swing it, the ratio is appalling. So why aren’t Venture Capital firms and Angel Investors willing to take a risk with their money on female-created companies?

There could be a number of reasons but when you boil it down, it’s about gender, and history. Yes, the majority of big businesses that have come out of Silicon Valley and changed the world have been created and run predominantly by men. But tech insiders and investors are starting to realize the economic benefits of diversity which is why this issue has become such a huge focus in the industry, as evidenced by Apple CEO Tim Cook’s admission that “women are the future of the company” at the recent Worldwide Developers Conference.

Now there is another man who has boldly made a statement that many investors are hesitant to. Angel Investor and tech ingenue Jonathan Sposato who is the Seattle-based CEO of PicMonkey told the audience at the recent Seattle Angel Conference that he will only be giving money to startups created by women.

“I will declare right now, I will take this moment to say that: Moving forward, as an angel investor, I am not going to invest in any company that does not have a female founder. I think the world is better when we can create products that are a different kind of product.” he said at the conference to rousing applause.

The admission was made during a Q&A session at the conference and he was more than happy to share his views on how to change the ratio in the tech industry.

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“This is an issue I’ve been thinking about for a while. There is a marked difference in the traction companies get depending on the gender of its founders. We have to change the balance of how people think about starting companies. It’s just as easy to find a female co-founder as it is a male one,” he said, adding that male entrepreneurs can help make the change.

Jonathan wants to inspire more men to bring women into the fold when created new companies.

“If you create a place for men, only men will show up. But if you create a place for women, men and women will show up,” he believes.

He is no stranger to success in this industry, having sold two startups to Google: widget company Phatbits in 2005 and photo-editing startup Picnik in 2010. He is also the co-founder of tech site Geekwire and has led investments in roughly 10 startups such as GlamHive, EveryMove, and one called Pokitdok, an e-commerce healthcare firm which has a female founder, Lisa Maki.

Jonathan’s remarks come after much research on his part and a desire to lead the way toward progressive change.

“I think a lot of times — us angel investors — we try too hard to pattern-match to perhaps Silicon Valley. I think, candidly, it is very hard for female entrepreneurs to get funded. I will say it more generally. I think sometimes it can be very hard for entrepreneurs to get funded if they don’t fit the canonical image of that sort of Silicon Valley or Seattle area tech guy,” he said at the conference as reported by Geekwire.

Part of the difference in trend will come when men can allow themselves to view female founders as viable as male founders.

“We need to pivot our brains to think differently about how we define what gets to a successful outcome,” he said.

All this is great, but are his intentions reflected in his own investments and companies? Mashable reports that he invested $1.4 million in Vizify, which was founded by men. EveryMove was also only founded by men, so it seems Pokitdok is his flagship example of a company founded by a woman that can be a huge success. His commitment about investing in companies with females as creators comes after reflection on his own experience, and we give him credit for that.

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“If I had been more intentional and more aware and more thoughtful, I think things could have been different. I don’t think all male companies are bad—those aren’t bad products, bad companies, bad people…Moving forward, I’m taking a much clearer stance,” he said.

Pokitdok’s Lisa Maki had a hard time getting funding for her healthcare site because she didn’t fit the typical Silicon Valley mold.

“She’s an example of where you persevere and you’re realistic about the challenges women face today and you’re hopeful, you can get there,” Jonathan said, singing her praises.

But that wouldn’t have happened in the first place if it wasn’t for a man like Jonathan willing to see beyond the industry restraints.

“He recognizes diversity in entrepreneurship is a good thing, not only because its the right thing to do, it’s the smart thing to do as the returns show. Jonathan gets that women can bring inherent advantages – from thinking through an issue differently to recruiting top female talent,” Lisa said about her Angel Investor.

Founder and CEO of Lucas Point Ventures, Adam Quinton, recently did an interview and was asked why he invests in female entrepreneurs, and in a detailed blog post on Linkedin, he had the best answer ever: “to make money”.

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Ultimately, that’s what it should be about – investors wanting to make money, and take gender out of the equation in order to make a better assessment about a company regardless of who the founder is. But to get there in the first place the market needs to be flooded with more female entrepreneurs, via initiatives and conscious decisions similar to Jonathan Sposato’s.

Kelly Keenan Trumpbour, an investor based out of Baltimore who founded a company called See Jane Invest and who sits on the board of directors for Baltimore Angels, has a similar mindset to Jonathan in that she is committed to investing in female-run businesses.

Kelly is adamant that evening out the gender ratio with companies founded by women could have a larger impact on society.

“If you had more women running companies, imagine how the economic landscape might change. In order to have a more diverse corporate world, I believe in backing companies with money,” shes said in an interview with the Baltimore Sun.

The first company Kelly invested money in is called Allovue, a Baltimore-based educational software firm, whose founder Jess Gartner understands the need for change is going to take a deep-rooted effort, not just a surface publicity-driven one, as the inequality also runs deep.

“It’s not an accident that most of the capital is in the hands of white men and most of the money invested is with white men. The world is not a meritocracy, and I think Silicon Valley has been trying to push a meritocracy narrative for a long time, and that’s not the way the world works,” Jess Garnter told the Sun.

To change the ratio effectively there has to be some risk involved. If investors are used to making risks anyway with their money, why is it so hard to view a female founder as someone who can make them just as much money and success as a company created by a male?

We need more men and women like Jonathan Sposato and Kelly Keenan Trumpbour who are experienced, and understand why diversity is not just a reason to tick a box and be politically correct, it is part of doing business in the 21st century.

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  1. Pingback: Goal: Changing the Culture around Women Founders - Leantime

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