Investing In Venture Is The Ultimate Power Play For Executive Women With Influence And Wealth

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Experienced CEO and founder of How Women Lead, venture capitalist and sought-after speaker on female entrepreneurship.

Despite the ongoing equity battle, there are a considerable number of women who’ve reached the top rungs of executive leadership, resulting in significant power, influence and wealth. Data shows that we are more educated, experienced and entrepreneurial than ever before. The average age of a female entrepreneur in the U.S. is 42, and 42% of American businesses are female-owned. As we hit our mid-forties, many of us start to think about our leadership in new ways; how can we up the ante and wield more influence? We actively seek board seats and advise startups. Yet, there is a huge opportunity for women to expand and use our hard-earned power, influence and wealth by becoming investors in venture capital.

Why is venture capital the move for executive women?

First and most simply, it’s a power play. It makes us more visible, and the experience often opens the door to other opportunities like corporate boards. Second, there’s a huge upside potential for generating wealth. Everyone invests in the stock market and mutual funds, but investing in a venture is a diversification strategy and, when done right, can return three to five times your money over a relatively short period of time. Why are women underinvested in venture? For many of us, it’s because it feels like a foreign language and concept. And, despite having the money to invest, we aren’t often asked to participate, a mark of the inherent bias that plagues the venture capital system.

It’s time women pursue venture investing so we can use our power to leverage change in the industry. At my venture firm, 85% of our investors are first-time investors in venture, and 30% report investing in other venture firms within just one year of that first investment. I find that a low entry point for investment, combined with a trusted, expansive network available for support and guidance, makes first-time investing more enticing. Finding that point of entry to venture and continuing to invest sets women up to be changemakers—for other women in the industry and also of the industry itself.

Despite the growing wealth and operational leadership experience of women, we remain grossly underrepresented in VC. According to the 2020 Women in VC report, only 4.9% of partners at venture capital firms are women, with just 0.2% female Hispanic partners and 0.2% Black female partners. We need more women and women of color investing and leading in venture.

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Once part of the venture capital community, women have the opportunity to demand accountability.

Key questions female investors should be asking of venture funds are:

• How many women CEOs are in your portfolio?

• How many women-led companies have you taken to an IPO?

• What are you doing to reduce bias in your evaluation process?

Asking these hard questions from a position of power puts pressure on venture firms to develop action plans to make progress where they’ve come up short. This is the type of accountability that will move the needle in getting women founders more of the venture funding they deserve while also bringing more executive women into the world of VC.

Take some time to reflect on whether your company is making an effort to involve more women. Examining your business practices is a good place to start.

Venture investing is the next logical step for executive women with the experience and resources to make an impact. Beyond the financial upside, there are additional advantages. It brings our leadership legacy to the next level and opens doors that otherwise may have remained closed. It allows us to work alongside groundbreaking innovators, contributing to the subsequent success of their ventures. Importantly, it gives women the voice they desperately need in the venture industry. A voice that will speak up for female founders and give their innovative businesses a fair chance they deserve to start, grow and flourish.


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