2019-08-05_Bloomberg_Businessweek-Europe_Edition

(Nandana) #1
◼ 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%
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