2019-08-05_Bloomberg_Businessweek-Europe_Edition

◼ TECHNOLOGY Bloomberg Businessweek August 5, 2019

21

PHOTOGRAPH

BY

ULYSSES

ORTEGA

FOR

BLOOMBERG

BUSINESSWEEK.

DATA:

PITCHBOOK

In 2017, shortly after becoming a venture

capitalist,JessLeeattendeda startupconference

inLosAngeles.Herbadgeidentifiedheremployer

asSequoiaCapital,anAppleInc.andGoogle

backerthatwasgearinguptoraisemorethan

$12billioninseveralnewfunds.Undermostcir-

cumstances,that’dbeenoughtogeta VCmobbed,

butthecrowdlargelyignoredLee,thefirstfemale

investingpartneratSiliconValley’smostpresti-

giousfirm.“Noonewasevenlookingatmyname

tag,”sherecalls.Inlieuofstandingaround,she

retreatedtothebathroomfora whiletoanswer

emailsonherphone.

Lee’sexperienceunderscoresthesexismthat

runsthroughmuchoftheclubbytechindustry.

Italsoshowedherthat“thisclassicnetwork-

ingmethodofgettingdealflowisprobablynot

goingtoworkforme.”Tosucceedinventurecap-

italasa youngishAsianwoman,she’dneedher

ownapproach,onethattookheruphillbattleinto

account.“Ifyouareunderestimated,youcanuse

thattoyouradvantage,”shesays.

Just11%ofAmericanventureinvestorsare

women,andSequoiahadn’thada femalepart-

nerintheU.S.sinceit wasfoundedin1972.(The

firm’sChinesefundshademployedwomenpart-

ners.)In2015,MikeMoritz,thefirm’sbest-known

partner,brushedoffa questionaboutthepossibil-

ityofhiringa womanbyimplyingthatnonewere

qualified.“Whatwe’renotpreparedtodois lower

ourstandards,”hetoldBloombergTV.Heclarified

thattherewere“manyremarkablewomen”can-

didates,butSequoiawoundupbackinthenewsa

fewmonthslaterwhenanexoticdancersuedone

ofhiscolleagues.ThedancersaidthatMichael

Goguen,a Sequoiapartnerfortwodecades,had

beenpayingmillionsofdollarstohushanextra-

maritalaffair.Goguendeniedtheallegationsand

countersued;Sequoiaseveredalltiestohim.Lee,

whowasalreadybeingrecruited,joinedthefol-

lowingyear.

LeedeclinedtocommentonGoguen’sexit

orMoritz’sremarks,butshenotesthatSequoia

hasbackeddozensofwomenfoundersoverthe

years.Shesaysthefirmhasalsogonetogreat

lengthstoensureshesucceeds.Likeallnewpart-

ners,shewasinvitedtoboardmeetingsatport-

foliocompaniesandgivenanofficialmentor.She

hasa standingMondayappointmentwithBryan

Schreier,thepartnerwhobackedfile-sharing

service Dropbox, to decipher Sequoia’s weekly

partners meetings and brainstorm ways to help

the six portfolio companies on whose boards

Lee serves.

Lee led her first investment, in yardwork app

Setter,in 2017 andfollowedupwithbetsonbusi-

nessesincludingWonolo(staffing),Ironclad(legal

services),andMaven (women’shealth). The

firstdealshelostoutonwasa proposedinvest-

mentinfitnessappMirror.Twopeoplefamil-

iarwiththenegotiationsaya moreexperienced

Sequoiapartnerbegantalkswiththecompany,

thenpassedthedealtoLee,who,likeMirror

founderBrynnJinnettPutnam,is a womaninher

30s.ThesesourcessayPutnamsawthemoveas

a bait-and-switchbySequoiaandreturnedtoher

existinginvestor,SparkCapital’sKevinThau,for

anadditional$25million.A Mirrorspokeswoman

saysthecompanychoseThau“fora numberof

differentreasons.”

Since then, Lee says, she’s leaned more

onteammemberstoclosea dealinsteadof“trying

todoit alone.”LatelastyearshebroughtMoritz

toNewYorktodelivera termsheettofoundersof

theWing,thewomen’ssocialclubandco-working

space,resultingina $75millionroundoffunding.

Lee’ssituationis groundedina rarelyacknowl-

edgedrealityforwomenintech.Despitepaying

lipservicetoa risingsisterhood,womeninves-

torswillsometimestrytoavoidwomenfound-

ers,andviceversa.Asa woman,sayslongtime

angelinvestorMagdalenaYesil,who’sfunded

manywomen-ledcompanies,“youarealready

theoutsider”andmightworryaboutdrawing

unwantedattentiontogenderbyteamingupwith

“yetanotherfemale.”

Thatstigmais fadingasSequoiaandotherfirms

grapplewithhowtorepresentwomenina more

meaningfulway.Thatstarted,bymostaccounts,

withanunsuccessfullawsuitfiled in 2012 by

KleinerPerkinspartnerEllenPao.Whilethesuit

failed,itmadefirmsmoresensitivetogender

discrimination.

Today, VCs are less likely to blame the “pipe-

line problem,” saying firms have to work harder

to seek out female founders. They’re also less

likely to take a “one and done” approach to hir-

ing a senior woman. Along with Lee, Sequoia has

added three more women as U.S. partners.

“On all my deals now, there’s at least one other

woman investor, sometimes more,” says Trae

Vasallo, a longtime partner at Kleiner Perkins

who launched her own firm, Defy, in 2016. “That’s

never been the case before.” Vasallo says groups

such as AllRaise, a two-year-old diversity non-

profit in which Lee is active, have also helped

encourage collaboration among women in the

field. The group’s stated goal is to increase the

share of female venture partners to 18% within 10

years and raise the proportion of funding going

● Industries’ share of

U.S. VC deals, by gender

of majority of investment

leadership team

Female Male

Finance

Energy

Materials and resources

Business products

and services

12% 10%

Consumer

26% 14%

Health care

17% 20%

Information technology

41% 50%