Statistics show women in venture capital are few and far between. There are a number of reasons why more women take up marketing roles than front-facing finance jobs, and researchers have looked into the barriers for women scaling the corporate ladder. Karen McCormick is one of the few women in venture capital who never hit a wall while building her career. As partner and chief investment officer at Beringea, one of the UK’s largest and most active growth capital investors, McCormick believes the gender biases that hold women back can and should be tackled head on.
“I’ve been incredibly lucky. I haven’t felt like I haven’t been fighting an uphill battle,” she tells GrowthBusiness. “When I was doing my MBA, I worked at three different start-ups. When I ended up in venture capital, I didn’t feel like a woman in VC; I felt like a VC.”
Biases exist, but may be melting away
According to McCormick, there’s definitely a factual bias when it comes to women reaching higher levels. “A gender bias still exists in the sector, but I hope my experience suggests that bias is disintegrating quickly. Women are certainly equal, and I suspect sometimes outweigh, their male counterparts. We’re an anomaly by default rather than design,” she says.
When McCormick joined Beringea, she was the only female investor on the team, she recalls. Now, the firm is nearing a 50:50 ratio, with another women joining the investment committee soon.
“I have different views for the reason for the gender gap exists and how to fix it. A lot of people in the industry care about this. It’s definitely high on the agenda,” she adds. McCormick fields calls from headhunters on a daily basis, pushing for her consider other jobs when she’s clearly not looking. “And when we’re hiring, recruiters always ask if we’re looking for a woman. But the answer to bridging the gap isn’t in quotas.”
Diversity in investment means diversity in business
For VCs, the call for a diverse investment team isn’t just one that is moral or one driven externally through quotas or legislation. “There’s a drive from the investors. They want to see more diversity in the investment community It’s a genuine interest in pushing for diversity,” says McCormick.
Female founders often expect more from their businesses, she explains. They often want to see growth in their companies and hit more milestones before they exit. “And we’re seeing quite a few female-led businesses achieving great exits. People are scratching their heads asking ‘why didn’t we see this before?’ The answer is because most VCs are men.”
When VCs invest in a business, they evaluate it primarily based on the management team and the track record. They also look for an affiliation with the product.
“If you can’t relate to the product, and if you don’t have a passion for the product itself, it’s hard to invest in the business. Most of the time, if you have an investor on the board who can understand the product, they can see the real potential the business has to achieve a phenomenal exit,” McCormick explains.
Gender research suggests one of the underlying issues for female entrepreneurs raising money is that they’re less confident and aggressive than their male counterparts. McCormick doesn’t agree. “It’s not just confidence issues. It’s that women set higher standards for success. Female founders have a higher threshold for themselves. I found a (female-led) business in the regions that has been growing steadily, completely bootstrapped, with £10 million in revenue. I knocked on her door asked ‘why don’t you take investment?’ Her first response was ‘oh, you wouldn’t want to invest in my little company. I started in my kitchen.’ That’s what I mean. It a difference is how most female founders define success.”
Flexible working is a given, but planning is key
“When it comes to women in senior roles in venture capital, I have a slightly contrarian view,” says McCormick. More frequently, advocates for gender parity say that women tend to stagnate in mid-career positions in finance, primarily because this is when they take time out for having and raising children. The common discussion around combatting what eventually becomes a career hiccup is providing flexible working.
“But I don’t see that as a problem,” says McCormick. “Most businesses, and certainly Beringea, is built on flexible hours. This job isn’t going to be 9 to 5. Everyone (in venture capital) knows that. It’s around-the-clock. Sometimes you’ll need to go for industry dinners, or take a call later in the day. Most firms aren’t bothered about face time hours, certainly not at senior levels. Also, people are pretty flexible.”
The real problems is maternity leave, she explains. “With five full-time investors on the team, if any one of us is on maternity leave, I’ve lost 20 per cent of my workforce. We have investment targets we have to meet every year and we need to be hitting certain investment targets. I joke about it, but if all three of us got pregnant at the same time, it would be devastating for our firm, and it’s not something that can be fixed by flexible working.”
The success of an investment can only be measured in the long term, over a seven to ten-year period, which is when it starts to pay out, she explains. “If you want to attract a partner, you need to be willing to commit to people in the long term. You can’t carry a spare partner on the P&L.”
This is why McCormick has taken the lead on creating an environment on her team for open dialogue. “I joke about it, but if we were all on maternity leave, it would be devastating for the firm, and that doesn’t make business sense. And it’s not just something that affects women on the team,” she adds. “Two of my investment directors, who lead their own deals, have children under two. Shared parental leave means we should allow for flexible working. Small children go to the doctor’s a lot, and that something we can accommodate.”
Having the difficult conversations
“An open dialogue has been really useful. I feel kind of badly for the men on the senior team. It would sound awful if they asked (a female associate or partner) when they’re planning on having kids. But we need to ask that question. People feel comfortable talking to me about this since I’ve been there. I was one of the first senior women to go on maternity leave. I took a half day a week off after the first month, and I loved it. I continued to manage a couple of clients while away, and I even closed a deal when I was going into labour. I don’t recommend it, but that’s just how it happened.”
McCormick admits that with parental leave laws the way they are, and the structure of the industry the way it is, this discussion is often difficult to have.
“I don’t know if I’m on the right lines on those discussions, but I try to be. In our industry, with our structure, it’s really difficult to hire senior women of child-bearing age. Your late 20s to early 40s is when you become partner so it’s really hard in smaller firms. It’s not the kind of role we can backfill, especially if it’s someone who’s in the dealmaking team.”