Saturday 15 December 2018

Time to end tech cash divide

Ex-Yahoo boss Marissa Mayer faced criticism when she took maternity leave. Photo: Bloomberg
Ex-Yahoo boss Marissa Mayer faced criticism when she took maternity leave. Photo: Bloomberg
Adrian Weckler

Adrian Weckler

Why is it so hard - if not impossible - for a woman to become a chief executive at an Irish tech firm? Similarly, why does so little of venture capital go to startups put forward by female founders?

Is it a "lack of experience" compared to male rivals? Is it a paucity of pitches? Or is it something more unaccountable, such as a "gut instinct" that works against female-led propositions?

If so, how significant is the dearth of women at partner level in most VC firms here? Last week, I published the results of research I did into 153 VC-funded Irish tech companies.

The results were stark: just 3pc of the VC money allocated to companies funded in the first nine months of last year saw its way to startups with a female founder or co-founder. Even more stark was the finding that of the 132 funded firms that only had male founders or co-founders, none whatsoever had a female chief executive. Zero.

Forget about '30pc' gender balance clubs - how about a 10pc club? Or even a 5pc club?

The research published focused mainly on the raw figures. Many of the people I spoke to on the topic didn't want to be quoted on it. This was especially so for female founders, who fear that being vocal on this topic could hurt their chances of getting funding in future.

But some had stories to tell about their own experience.

"I've been told more than once that I'd have a better chance of getting funding if I hire a male chief executive," said one recently-funded female founder. "I'm told that it's to do with experience to make investors feel more comfortable."

Others say that they have to have twice as much experience as men to get into meaningful discussions with Irish venture firms.

"They seem to regard investing in a company run by a woman as a bigger risk," said a Munster-based female founder. "It took me ages to get past basic stages with Irish investors."

As in other areas of competitive career advancement, family situations may be a built-in disadvantage for women compared to men.

"You have to convince them right away that you can achieve things despite having kids," said a Dublin-based female entrepreneur. "From what I've seen, it's just as bad if you don't have kids but are between 30 and 40 and have a partner, as they think you're going to start popping out kids and not have time for other stuff any more. This never seems to happen to men of the same age."

The negative baggage that kids appear to bring to investors' calculations may not be helped by the way high profile female executives are dissected on the issue. When ex-Yahoo boss Marissa Mayer had a baby, the period of her maternity leave - a mere couple of weeks - was a widely-discussed topic. The tone of the discussion ranged from criticism over the shortness of her maternity leave to questions over how she might cope having recently given birth. But mostly it all insinuated a common factor: that Mayer had other things going on in her life than focusing completely on delivering shareholder value for Yahoo.

Off the record, some of the venture capitalists that doled out the €781 to Irish tech and biotech firms last year say that while they would prefer it to be different, they are caught in a catch-22 situation. Put in a position to invest other people's money (which is what most VC funds are made up of), they "naturally" default to "experience" and "those with a track record".

The vicious circle here is that with just 12 female CEOs out of 153 funded firms last year, the barrier of not having past experience as a CEO is difficult to overcome.

The tiny incidence of female CEOs in Irish tech is often lost in conversation because of the more visible grouping of female executives at other roles in tech companies here.

For example, when it comes to the biggest multinational tech firms with bases in Ireland, around half of the country managers are women.

That includes Apple's Cathy Kearney, Google's Fionnuala Meehan, Dell's Aisling Keegan, Microsoft's Cathriona Hallahan and Twitter's Sinead McSweeney, among others.

While this may not involve exactly the same role as a chief executive, it arguably bolsters an ecosystem that sees more women as senior industry figures.

It is also true that not all investment in indigenous Irish tech comes from venture capital or private equity. Enterprise Ireland has been at pains to point out that it has a rising number of female-founded startups that qualify for grants under its Competitive Startup Fund (CSF) and High Potential Startup (HPSU) schemes. This is often up to €50,000. Indeed, the state agency has a specific funding call reserved for female founders later this year.

In time, this may strengthen the baseline of "qualified" women who go on to pitch for bigger rounds from private equity.

But if so, we aren't yet seeing the fruits of this. Or anything close to it.

By far, the two biggest Irish fundraising rounds involving a female co-founder last year were Transfermate (€30m) and Nuritas (€16.5m) which, between them, accounted for twice as much VC cash as the rest of the female-founded firms of the first nine months combined.

Yet for all the success that both Sinead Fitzmaurice and Nora Khaldi deserve as co-founder and founder of these firms, neither is its chief executive.

That may be by choice or by convention. But it's a statistical reminder that it is a norm for a woman not to be a CEO, even if (particularly in the case of Khaldi) she is the main driving force behind the creation of the firm in the first place.

Ireland is hardly alone in having a comically lopsided gender imbalance when it comes to top jobs and funding balances. But it may be past time to start dealing with the issue all the same.

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