In the not-so-recent past, the idea of a “venture capitalist” (VC) probably conjured up a specific kind of person: possibly someone with an established corporate background, maybe someone close to middle age, and maybe even a male.
Thankfully, those days are slowly fading away, and we find ourselves in the middle of an exciting turning point as more opportunities than ever before are helping create a more diverse set of venture capitalists in the industry – myself included.
A foot in the door
Since joining the Institute of Banking and Finance Singapore (IBFSG) in April 2019, I have had the privilege of getting an in-depth understanding of the financial sector. However, if you had told me this would be the trajectory of my life, I don’t know if I would have believed you.
Before this chapter of my life, I was working in a young and growing firm focused on menswear. That experience opened up the world of early-stage companies for me, and from then on, I knew I wanted to start my own business. When I began pursuing my master’s degree part-time, I started looking for something to do beyond the academic readings, lectures and projects that could help me enhance my professional career.
That’s when I came across Protégé Ventures, a student-run venture fund created by Singapore Management University’s Institute of Innovation and Entrepreneurship (SMU IIE). The programme promised to give me hands-on experience and insight into the behind-the-scenes of the venture capital industry, which I thought would be invaluable given how central today’s entrepreneurship is to our economy and future.
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The programme delivered on its promises and more. I wasn’t just learning about deal sourcing, due diligence, and fundraising – I was actually involved with the work. These real-world experiences gained through internships and work placements were essential to supplement what I was learning in the classroom.
They also crumbled some of my preconceived notions about what a successful startup or business looked like. Take, for instance, my first-ever experience with Angie’s Tempeh, a startup working on manufacturing innovative products such as tempeh bak kwa and ready-to-eat tempeh. Who knew this was something the market wanted or needed?
However, after visiting the company’s factory, getting to grips with the product, and presenting our case to the investment committee, I realised that VCs don’t only have to focus on the latest cutting-edge technologies. They can also help companies break new ground in markets and under-explored sectors.
Investment’s gender problem
Perhaps one area that I’ve had to do the most rethinking around is who gets to be a VC.
As I mentioned at the beginning, men tend to dictate our cultural idea about what the investor world looks like and who can be a successful VC. Studies have shown that women hold only a fraction of all senior positions in private equity (PE) and VC firms, which has had the effect of limiting the investment dollars trickling down into women-led enterprises.
Why are women so poorly represented in this industry? In my view, one reason is possible that women are naturally more risk-averse than men, which may give some firms pause when it comes to hiring females. I also believe this could be owing to a lack of interest among women to get involved in the space, or maybe potential females are not sure how to get started in the first place – which becomes an artificial barrier to entry.
I have experienced these conversations playing out in my life as well. When I’ve spoken about this topic with my female peers, many have said they find the investing industry “daunting” and unfamiliar territory. Some have even expressed concerns about being outnumbered by men – which is fair enough, given that men do dominate the landscape.
Whatever the reason, it’s certainly not because women are ill-suited for this industry. We know from studies that more diverse teams are more profitable – one study showed that exit profits at venture firms with at least one female founder were 9.7 per cent higher. Another study by the International Finance Corporation revealed that private equity and VC funds with gender-balanced senior investment teams generated 10-20 per cent higher returns than homogenous ones.
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From my experience, the benefit of having more women in the venture capital world is obvious. Women have different life experiences than men, which translates into unique perspectives on business and decision-making processes. Females may spot opportunities overlooked by men, as Janet Gurwitch – the only female partner in her firm – did when she fought to invest in Drybar, a cosmetics venture which is now a multi-million-dollar success story. When I worked on Angie’s Tempeh, I was able to bring a new perspective to the table that my male peers did not have.
Building the essential structures
The very nature of our work means we are willing to embrace anyone regardless of age, gender or background – as long as one can add value. Moreover, change is happening, even if slowly: women now represent 26 per cent of the global VC workforce, up from 15 per cent in 2016.
The way I see it, the problems in our industry are much more complex, subtle and culturally driven than we might realise. For instance, women’s communication skills may give them an advantage when it comes to relationship building, but they may be limited in their ability to network with established venture capitalists when it comes to typically male-dominated spaces. Overcoming this will be difficult, but it’s not impossible, especially given enough effort by all stakeholders.
It’s no secret that women are disproportionately more likely to face unconscious bias and gender stereotypes in the workplace, especially in male-dominated sectors like VC investing. Overcoming these barriers will be essential to unlocking a “diversity dividend” in this industry, especially in Asia.
One key tool will be providing opportunities and structures to train females through programmes such as Protégé Ventures. I consider myself lucky to have been able to benefit from the programme as it created the infrastructure that made it easy for me to access internships, training, resources and mentors. These programmes can also provide opportunities for women to gain a foothold in male-dominated social spaces, as I witnessed during Protégé’s 2023 LinkUp event.
The importance of these structures goes beyond supporting females, as they can benefit from a whole range of under-represented groups. In this way, educational institutions play an important role in helping younger people identify pathways into the VC world and working with firms to create the right programmes to support their long-term development.
It’s evident that the industry does want change, even if it has struggled to get there. However, I am confident in our ability and determination to achieve a level playing field for all – I know our more diverse future has enough space for all of us to thrive.
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