Bengaluru/ Mumbai: In July 2019, a woman investor at a well-known venture capital firm joined one of her male colleagues at the Delhi office of a millionaire to convince him to invest in their fund. In his mid-50s, the prospective limited partner (LP) had made his wealth in financial services.

The meeting didn’t go well for her. While she and her colleague were pitching as peers, the prospective investor only spoke to the male partner, the woman investor said, requesting anonymity. “I was virtually ignored right there. Even if I would say something, the response would be directed to my male partner. Despite being on equal footing, I felt like a bystander watching them chat," she said.

Another woman venture capitalist (VC) said that in board meetings, she is often “mansplained" by fellow investor board members. “If I’m trying to say something, a male board member will finish my sentences for me, or I will be ignored and a guy will later say the same thing in a different tone and then be heard. I’ve started calling out these instances," she said.

The experiences of these two women VCs were echoed by eight other women investors that Mint spoke to for this story. Thanks to a skewed gender ratio, prejudice against women investors is still widely prevalent, as women investors struggle to secure equal treatment from LPs, peers and entrepreneurs.

Clearly, the Indian venture capital world is even more male-dominated than the US, which was shaken up by the #MeToo movement in 2017. This claimed the jobs of some of the most powerful entrepreneurs and VCs after accusations of sexual misconduct emerged at their companies. Apart from the issue of sexual harassment at workplaces, the #MeToo movement raised awareness about the lack of gender diversity, in general.

Though venture capital firms in India have made some effort over the past few years to hire more women, most are still dominated by men, especially at the senior level. According to a TechCrunch study, among the top 100 US venture capital firms, the number of women partners was 8% in 2017. In India, only three of the top 20 venture capital firms, India Quotient, Lightspeed India and Kalaari Capital have one woman partner, according to Mint research. The rest do not have a single woman partner. (Some companies’ venture capital arms like have women partners and Omidyar Network India, the Indian unit of eBay founder Pierre Omidyar, is headed by a woman).

The distaff side

India’s venture capital industry compares poorly with other emerging markets as well, not just with the US. Overall, women comprise 15% of senior investment professionals in private equity and venture capital space in China, according to a report by the International Finance Corporation (IFC), which invests in funds. The number in India was just 7%, it said.

The lack of gender diversity looks starker in light of the fact that the venture capital business has expanded considerably in terms of employees, the number of funds and the capital deployed since 2014, when India experienced its first major startup investment boom.

To be sure, there is a wider phenomenon here: according to an October 2019 report by Credit Suisse Research Institute, women held 8.5% of senior management roles in India. A more tech focused study—the Zinnov-Intel India Gender Diversity Benchmark—found that women comprised 11% of senior roles, 20% of mid-level positions and 38% of junior employees in the 60 firms that it surveyed. Most venture capital funds in India easily lag even these low numbers.

Apart from the bigger problem of sexism, hiring more women investors makes business sense, as an increasing number of internet users are women. According to a report by Kantar IMRB, a research and data consultancy firm, women comprise 42% of the 566 million internet users in India as of December 2018. Women users are as active on the internet as men, it said. Growth in categories like content, e-commerce and healthcare, in particular, is being driven partly by women customers.

A few years ago a startup named Brag, founded by two women entrepreneurs, was pitching to a group of angel investors. Brag sells bralettes, an innerwear product that is a substitute for bras, to younger women and teenagers.

The room was full of men who were struggling to understand the need for the product, recalls Sarita Raichura, who was then at the Indian Angel Network and present at the meet. "I could immediately relate to the product because I’ve shopped for them for others. I’ve been in other situations like these where only women can understand the use case and explain it to men," said Raichura, who now works at Blume Ventures, an early-stage fund.

Apart from such obvious instances, having more women investors is essential to cultivate a healthy work culture at funds, startups and the startup ecosystem at large. “Working styles are different across gender so it’s good to have diversity in thinking—it leads to more balanced decision-making," said Ruchira Shukla, regional lead ( South Asia) for IFC’s venture capital practice.

Centre of power, wealth

One of the reasons there are fewer women VCs is that most funds do not consciously seek to hire more women, say women investors. Funds usually hire investment professionals from management consultancies, tech firms, large startups or former entrepreneurs. They either use recruitment consultants or tap their social networks.

Among the most gender balanced investment teams at venture capital firms is Lightspeed, which has seven men and four women, all of whom were hired in the past four years. Earlier, Lightspeed, which is headquartered in the US, had an all-male team. But four years ago it began to diversify its team consciously. Now, when Lightspeed is hiring, the fund mandates its recruiting consultants to bring an equal number of male and female profiles, said Harsha Kumar, partner at Lightspeed.

“If you see 70 male profiles and 10 female profiles, you will obviously end up hiring a man. But if you see equal number of profiles, you will end up hiring a more equal number of men and women. So because we make an effort to specifically get women profiles, we see a lot of excellent women candidates across junior and senior levels," she said.

Anuradha Ramachandran, investment director at Flourish Ventures—spun off from Omidyar Network—said the lack of women investors is a reflection of how the overall startup ecosystem functions. “There are not enough women entrepreneurs, there are not enough women in technology, and there are not enough women VCs," she said.

To be sure, even in the internet space, there are many more women now, compared with a decade earlier. As venture capital funds have expanded in size, they have hired specialists in areas like human resources, marketing and technology. Some of these roles are held by women. Some funds have women as CFOs, too. But the centre of power—and wealth—is the investment function, which is still dominated by men.

And though awareness has increased about the lack of women investors, many male investors do not see it as a major problem that needs to be addressed.

“Most male partners at funds occasionally talk about wanting to hire more women, but you don’t see them doing much about it," said a senior woman investor requesting anonymity. “There is absolutely no urgency."

Male investors that Mint spoke to validated this point of view.

An experienced male VC at an early-stage fund said there is a “very clear case, business and otherwise" for recruiting more female investors. “Women investors can very clearly evaluate different kinds of businesses, lend a different perspective and many times while evaluating deals, we have wished we had a woman looking at the deal with us. So we have hired more women at earlier stages." But having more women at the leadership level is a “long term journey", he added.

Women investors say that apart from the weak institutional action by funds to seek more women candidates, the venture capital industry also has an image problem which restricts the number of women candidates: it is considered a very “masculine" space. “If you consider the qualities that an investor is supposed to have they are: aggressive, ruthless, huge appetite for risk, self-promotion. That is the perception. Some women are put off by this and don’t think the venture world is their cup of tea because of this image," said a woman investor, declining to be named.

Compared with the internet space, impact investing—which refers to investments made to create social change—has far more women, partly because of its traditional links with the microfinance sector that is women-centric.

Networking troubles

The skewed gender ratio makes life difficult for the few women in the venture capital world. Lightspeed’s Kumar has found that some male founders tend to feel nervous around women. “Sometimes, founders avoid making eye contact. I generally laugh and say, ‘Listen, I feel very strange when I ask you a question and you look somewhere else and answer’. This helps break the ice," she said.

One of the biggest issues that women face is in networking. At networking events, the lack of women investors is borne out starkly. Networking, both in its organized form and in more informal settings, is an essential aspect of an investor’s life. Connections are made, relationships are built, deals are struck while networking.

“When I enter networking events, I see a sea of shirts and blazers; no saris, no salwars, no pantsuits," said a senior woman investor requesting anonymity. “It’s intimidating when you’re a newcomer."

In this male-dominated environment, what makes networking tougher for women is that by inclination many male investors prefer engaging with other men. “Though I’ve never faced issues in formal, direct conversations with other investors or investment bankers, as a woman you do tend to get left out of informal communities and networking (where many deals are struck)," said Ramachandran of Flourish Ventures.

For instance, when investment consortiums are being formed to do a deal, male investors almost always reach out to other males, whom they know well and have worked with in the past. “If I get to hear of a deal being done I will pick up the phone and express my interest to participate in the round. But you need to take the initiative as opposed to being asked by male investors," she said.

It’s easier for guys to talk to other guys, agrees Kumar of Lightspeed. “Sometimes you have to butt into conversations to create room for yourself and over time I’ve gotten comfortable doing that. Overtime you build the muscle. If I have to network, the initiative is generally mine. It is unlikely to come from the other end," she said.

Other, more direct cases of gender problems faced by women include meetings turning into dates, an issue faced particularly by some younger women investors. “I’ve been in (supposedly) professional meetings which have suddenly turned into dates. It doesn’t happen very often, but it has happened on at least five occasions, which is bad enough. I’ve also been asked out on dates at events. These kinds of incidents make you wary of networking," said a woman investor declining to be named.

VCs in India raise capital primarily from pension funds, family offices and other institutional investors in the US, Europe, China and India. In the US, some LPs have begun insisting on funds having women investors. In India, though, LPs led by development finance institutions are only beginning to prod funds to address gender diversity.

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