I just read an anonymous post on Forbes.com titled "What It's Like Raising Money As A Woman In Silicon Valley." The article details the sexist gauntlet of groping, marriage propositions and insults that the author had to run as part of the process of raising money for her company. Her experience is hardly unique; there's an ever-growing body of documentation of the sexist, racist and bigoted atmosphere that non-male, non-white founders are confronted with in Silicon Valley. My stomach churned as I read her article, partly because of her experiences, and partly because I saw some of my own past behavior reflected in the men that she dealt with.
Women have never had an easy time in Silicon Valley, whether as an employee (of which there are few) or as a C-level executive (of which there are much fewer.) Women have been concentrated in marketing, PR and HR positions, and people in those positions, male or female, rarely get an opportunity to run technology companies. Female software developers and hardware engineers have always been rare, and have had to put up with a disproportionate amount of sexism because of their rarity.
Social scientists say that it's much easier to pass laws than it is to change how people think. The proof of that is easy to see: Civil Rights legislation made segregation illegal 50 years ago, but racism is still easy to find. The first sexual harassment trial in the U.S. was 40 years ago, but there's still plenty of sexual harassment to go around. We can't legislate away racism, sexism or bigotry--but we can do an end run around them.
Women can't depend on male-dominated venture capital firms to change the way they do business--only four of the top 100 venture capitalists on Forbes's Midas List are female, and only four more made the magazine's "long list." There are a handful of seed and VC firms run by women, such as Golden Seeds and the Women's Venture Capital Fund. We need a lot more. We need women who have been successful in business and finance to step up and help other women succeed. For that matter, we need a lot more African-American-, Hispanic- and Asian-run seed and venture funds. All of these groups face discrimination from the VC community. That's not to say that every seed investor or VC partner is a sexist, racist or bigot--far from it. However, the investment community is largely an "old boys' club," and if you're not male, white and under 40, you're going to have a hard time finding funding, no matter how good your team and ideas are.
Los Angeles and New York have been making a strong push to compete with Silicon Valley for startups and technical professionals. One way that they could succeed is to help build a community of seed and venture funds in their cities to serve underserved groups, like women. Silicon Valley VCs often make it a stipulation that out-of-town startups must move to Silicon Valley in order to get funding, and the vast majority of startups offered money with that condition agree to move. Startups offered money by Los Angeles- and New York-based investors with similar stipulations are very likely to move as well, especially if they can't find funding in Silicon Valley.
As the number of investment firms targeting women, African-Americans, Hispanics and Asians increases, founders will be able to bypass investors who engage in sexual harassment, racism and bigotry. Those investors will see their deal flow diminish, and they'll be forced to either change their behavior or get out of the business, because at the end of the day, another song title describes what's most important to them: "It's Money That Matters."