Unicorns aside, let’s focus the lens on who is investing. Lately, a great deal has been written about the need to have more women on the investing side of the table. Researching the topic, I discovered a little known fact: As ranked by CB Insights, 17% of the top 20 Corporate VC firms in 2014 had women on the investment team. Women comprised 11% of CB Insight’s 2014 Top 20 VC list. According to a Babson College report, the national average of Women VC investors is 6%. There is not any current research that tracks the national average of women led Corporate VC investments.
I asked Anand Sanwal, Founder of CB Insight’s why he thought there are more women Corporate VC’s than in the general VC ranks, and he said he had no idea the number was so high because they don’t track it. He thought that because so many of the big VC firms have been around so long they were pretty set in the way they filled their GP pipeline. Whether you call this conscious or unconscious bias, the bias is there. The Corporate VC’s however, are newer, and may have more flexibility on how they fill their bench. A recent CB Insights report, projected that the new Corporate VC firms making first time investments in 2015 may exceed the 70 new Corporate VC’s found in 2014. That growth rate would indicate that there are many more Corporate VC openings to fill than at traditional VC firms.
Corporate VC’s have a lot of financial power behind them, but that is not all. Experienced business teams and large distribution channels support their investments and add real value to any startup company designed to scale. I asked Amy Banse, Managing Director and Head of Funds at Comcast Ventures, who ranked number five on CB Insights 2014 CVC list, how Comcast Ventures viewed their investment opportunities and I was a bit surprised by the answer. “We offer entrepreneurs all the strengths of a strategic investor, including the resources and expertise of Comcast NBC Universal but like a traditional VC firm, we measure our success by the returns of our portfolio companies.” I inquired as to whether the investments had to have some relevance to businesses that Comcast owns. She replied that it certainly is a plus if Comcast businesses can help escalate growth and get the startup cash flow to break even quickly. It is, however, not a requirement. Comcast Ventures invests in early to late stage companies in the advertising, consumer, enterprise and infrastructure spaces. DocuSign, Houzz, Instacart, Vox, Zenefits, YouNow and a smattering of VR start-ups are among the companies they have backed. Most Corporate VC’s strategically align with companies to add capital and gain business access.
To get after perspective on the value of Corporate VC’s to the venture community, I turned to Ann Winblad, co-founder and a Managing Director of Hummer Winblad Venture Partners. “Corporate VC’s have been pouring into Silicon Valley in recent years” noted Ann. They tend to invest in later stage companies and there is a significant difference among them. She expressed that one of the best in her firm’s experience is with WPP, a world leader in advertising and marketing services, who incidentally is not located in Silicon Valley.
Others such as Salesforce, Cisco, and GE corporations, all stick closely to the value they bring, in addition to capital. This in Ann’s view is the key to their success. It is also what adds value to the portfolio investments her firm makes.
All this started me thinking about how accessible women Corporate VC’s are and what that might mean for getting more women on the investing side. Clearly, every stage of equity investing needs to have women at the table. According to the Halo Report, women comprise 22% of all angel investors in the US, supplying significant early seed capital, especially to women entrepreneurs. Stepping upstream we find that women comprise only 6% of VC’s according to research from Babson College. When looking at Private Equity, Bloomberg News reports that among the top ten firms, women comprise 10.9% of senior management positions. So it is a bit surprising to find that according to CB Insight’s 2014 CVC report, there is a significant increase in the percentages of women in Corporate Venture, now at 17 %.
One comment by Ann Winblad relative to corporate VC’s, is that male corporate VC’s tend to use their platform to spin out and launch their own venture firms and women do not. The only one she could think of that had done this is Kate Mitchell, at Scale Ventures, who previously worked at Bank of America. What if more women followed Kate’s path?
In thinking how all these different stages of investing interrelate, it occurs to me that there is more power in women connecting than we realize. We need to connect all these dots and pass investment opportunities up the pipeline, including Corporate VC’s where women hold significant sway. For more women entrepreneurs, we need to have more women investing at every stage.