Although we should be optimistic that an increasing number of women VCs will help to close the VC gender gap, research shows this not to be the case. Male and female VCs both display the same bias in their questioning based on the gender of the founders. The unconscious differences in the type of questions asked to male and female founders assists in perpetuating a cycle of bias that continues to aggravate the funding disparity. It is therefore important to understand the difference in the type of questions asked to male and female entrepreneurs, and to work towards these becoming consistent. Men are asked mostly ‘promotion’ questions, which focus on potential greatness; whereas women are asked ‘prevention’ questions, which focus on negatives and risk. At this point in time, the actionable response falls squarely back on to the female entrepreneur, who must learn how to turn a prevention question into the same opportunity to promote their business that a male founder is offered by default.
As part of my series about “the five things we need to do to close the VC gender gap” I had the pleasure of interviewing Janine Manning.
Janine Manning is an award-winning angel investor with experience in helping to guide, build and grow early stage businesses using a hands-on approach. Janine is originally from New Zealand where she is a prolific angel investor. She has now brought her investment experience to the UK where she actively backs local entrepreneurs. Janine is currently a Director of Crimson Education, Stitched, Beany and co-founder of Rebecca Page.
Thank you so much for joining us! Can you tell us the “backstory” that brought you to this career path?
After university, I qualified as an accountant and quickly discovered that I enjoyed ‘rolling my sleeves up’ and working in fast-growing, early stage ventures (although they weren’t called that back then!). To build and broaden my skills, I completed an MBA 10 years later, and more recently a MSt in Social Innovation from The University of Cambridge. I’ve been a business angel for seven years and I mentor a group each year for the New Zealand Women’s Network in London. In 2018, Rebecca Page was a mentee in my start-up group. She was exploring whether she could turn her sewing hobby into a business, and at the end of the 12-week program we co-founded Rebecca Page.
Can you share a story of your most successful Angel investment? In your opinion, what was its main lesson?
In 2014, I became the lead investor and director for Crimson Education, a start-up founded by (then) teenagers Jamie Beaton and Sharndre Kushor. Jamie presented at the 2014 Ice Angels Annual Showcase in New Zealand, and all of the international ‘experts’ who attended stated, at the review the following day, that Crimson was the company they would not invest in. Crimson has since scaled to over 25 countries, has raised 90MM dollars and is currently valued at 390MM dollars. The first-round Ice Angel investors had a partial exit in 2019 at a multiple of 59 times. The lesson I learnt from this is that sometimes you need to dismiss the experts and go with your gut. I’ve also learnt that there are plenty of young, ambitious, talented people who are working hard and smart to change the world and who deserve support.
Can you share a story of an Angel or VC funding “failure” of yours? Is there a lesson or take away that you took out of that that our readers can learn from?
In one of my first investments, I had trouble with the way a founder conducted himself. As angels we undertake due diligence on investments, so I learnt the important lesson that the alignment of values needs to be an important part of the diligence process. When I’m approached to go on a board, I encourage the founder/s to undertake due diligence on me, in the same way that I will be on them!
Was there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that?
In the early 2000’s, I had the opportunity to be a very early stage investor in Xero. I wasn’t an angel back then, and I lacked the experience to evaluate an opportunity. As a very early adopter of Xero, and a big fan, I regret that I didn’t take the plunge earlier.
Ok let’s jump to the main focus of our interview. According to this article in Fortune, only 2.2% of VC dollars went to women in 2018. Can you share with our readers what can be done to help close the VC gender gap?
A good starting point is Peter Drucker’s ‘oldie-but-goodie’ observation, that ’if you can’t measure it, you can’t improve it’. Unfortunately, there is no quick fix, but initiatives such as the UK ‘Investing in Women Code’ will help to support and measure the equality of interactions by collecting, reporting and sharing consistent data. The VCs that sign up to the code commit to adopting internal practices that will improve the potential for female entrepreneurs to access the resources and investment they need to grow their businesses.
Can you recommend 5 things that need to be done on a broader societal level to close the VC gender gap. Please share a story or example for each.
- Internationalise the ‘Investing in Women Code,’ so that all female founders are aware of which VCs have committed to the principles of the code. Building up this reciprocal process, along with measuring outcomes will, over time, reduce (and hopefully ultimately eliminate!) ‘gender’ as a factor that requires assessment as to a venture’s investment worthiness.
- Introduce more data-driven approaches that can help VC firms limit gender bias and make better, fairer investment decisions. Presently, VCs evaluate investments by balancing intuition with data perceptions that can be skewed by gender stereotypes. An example of this is when pitches, with the same level of competence and passion, are presented by male and female entrepreneurs — research shows that investors are always drawn to pitches made by men.
- Although we should be optimistic that an increasing number of women VCs will help to close the VC gender gap, research shows this not to be the case. Male and female VCs both display the same bias in their questioning based on the gender of the founders. The unconscious differences in the type of questions asked to male and female founders assists in perpetuating a cycle of bias that continues to aggravate the funding disparity. It is therefore important to understand the difference in the type of questions asked to male and female entrepreneurs, and to work towards these becoming consistent. Men are asked mostly ‘promotion’ questions, which focus on potential greatness; whereas women are asked ‘prevention’ questions, which focus on negatives and risk. At this point in time, the actionable response falls squarely back on to the female entrepreneur, who must learn how to turn a prevention question into the same opportunity to promote their business that a male founder is offered by default. Although being aware of this (and preparing) will help, it also increases the risk of being knocked back on the all-important subjective ‘gut-feel’ criteria of fit and likeability. An example of these types of questions are to ask a man ‘how he is going after a market’, and a woman ‘how she plans to defend her market share given the competitive landscape’. If the woman is well-prepared, she can respond to the prevention question by giving a promotion answer that presents the opportunity of the fast-growing market and her startup’s unique ability to leverage this.
- As a pre-cursor to VC funding, build up the number of female angel investors, which is currently estimated to be 12–14% in the UK. This will help to stimulate female entrepreneurial activity early on in the start-up eco-system and this will have a flow-on effect to VC funding further down the line. It would be helpful for female angels to actively encourage other women to join them on the journey of supporting entrepreneurs with both funding and smarts. It’s a classic case of ‘play it forward’ — I had an experienced angel take me under their wing (forgive the pun!) when I first started, so now it’s my turn to do the same.
- It would be helpful if the performance of VCs, including the gender make-up of their investments, was published in a consistent format internationally. Putting a public spotlight on this will highlight discrepancies and help towards achieving a better balance. Evidence suggests that female-owned start-ups outperform their male counterparts, so you’d think that it would be entirely rational that VCs would choose to do something that’s in their own best interests!
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
During the pandemic, there’s been a positive move towards more mindful consumerism, and part of this is the rejection of fast fashion in favor of creating your own. I’d like for the joy of home sewing to spread further and become a movement. Spending time on a productive hobby, where you create something using your hands, is therapeutic for the individual and positive for both society and the environment.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
“Don’t be a know-it-all; be a learn-it-all” (Satya Nadella, Microsoft).
I’ve found that a learning mindset helps me to gain insight into the way the world changes and what is required to adapt and thrive. Learning does not need to be formal — every day is a learning opportunity and it’s a two-way thing. I learn as much from the young people I work with as they (hopefully) do from me.
Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might see this, especially if we tag them. 🙂
I’d like to meet Reid Hoffman, partner at VC firm Greylock Partners. Reid had conviction from an early age to make large scale change in the world through entrepreneurship. I find his ‘Masters of Scale’ podcasts both enlightening and practical and his book Blitzscaling (co-authored with Chris Yeh) a revelation. I like Reid’s balance of practical advice with deeper thinking surrounding the positive impact entrepreneurship can have on the world.
This was really meaningful! Thank you so much for your time.