female founder owns 48¢ in equity for every

dollar owned by a male founder.) That means

the bias women face while raising money can

come back to bite them later by placing them

at the mercy of their board.

For many of those watching the female-

founder shakeout, the real question is what

comes next. Investors have a long history of

giving disgraced men—including Kalanick,

who has raised more than $700 million for

his new venture, CloudKitchens—another

shot. But while some of the women who have

left their CEO roles in the past 18 months

have rejoined their companies in some less

influential form, none have yet moved on to

their next big thing.

And none would speak on the record,

expressing fear and fragility about how closely

they now know they’re being watched. “This

is not just a ‘dust off your pants’ experience.

It’s really psychologically scarring,” says one

founder who was forced to resign from her

company.

While this founder wasn’t ready to discuss

her next move, she, like many of the other

women who have spent their careers trying to

navigate a system stacked against them, says

she’s worried about the long-term implica-

tions of her public downfall. If women leaders

come to be seen as a risky bet for funders,

what little money is going their way could dry

up. And then there’s the effect on would-be

entrepreneurs themselves.

“Is watching all of this go down this

massive deterrent for women to start compa-

nies?” this founder asks. “They’re watching

all these other women and wondering: ‘If

that’s the price of admission, why do I want

to do it?’ ”

The outcome was a bit different at Everlane, another venture-

backed retailer that promises “radical transparency” and that

this summer also faced employee allegations that it had allowed

anti-Black language and behavior. In June, cofounder and CEO

Michael Preysman acknowledged on Instagram that he had “fall-

en short of addressing issues of institutional racism both inside

the company and in how we present ourselves to the world.” He

remained CEO and, three months later, LVMH-backed private

equity giant L Catterton led a new $85 million investment in the

company.

Preysman—like Pinterest’s Ben Silbermann and Carta’s Henry

Ward, both of whom have also weathered allegations of discrimina-

tion this year—is proof that male founders who rely on marketing

that touts their companies’ social missions are also vulnerable to

damaging charges of hypocrisy. But unlike Aflalo, none faced sig-

nificant consequences.

“Female founders 100% deserve to be removed from their posts

for horrific behavior, but the fact that there are no repercussions

for men who are running these companies is crazy,” says Ifeoma

Ozoma, a former Pinterest public policy manager whose claims

of racism have been widely reported. “I can’t imagine a situation

where a woman in Ben’s position would still be there.” (A Pinter-

est spokesperson says the company is conducting an independent

review of its culture.)

The two men most often trotted out to refute claims that

women founders are more likely to be ousted are former Uber

CEO Travis Kalanick and former WeWork CEO Adam Neu-

mann. Both were pushed out of their companies in the midst of

reports of bad behavior, but only after months or years of being

able to shrug off the allegations—and amid circumstances that

went beyond claims of “toxic culture” or employee mistreatment.

Kalanick, whose company was the subject of well-chronicled

regulatory and customer complaints by 2014, didn’t step down

as CEO until 2017, months after former employee Susan Fowler’s

blog post about the company’s rampant sexual harassment went

viral. At WeWork, a stalled IPO did what internal and external

reports of Neumann’s hard-partying leadership and fostering of

a “frat-boy culture” couldn’t, and WeWork’s board finally pushed

him out in September 2019. (Uber did not respond to a request

for comment; WeWork declined to comment.)

The cases of Kalanick and Neumann are a harsh reminder that

it takes more than some bad press and a soured public opinion to

fire a founder. Ultimately, the most power to purge or protect lies

with investors, especially those who make up the company’s board

of directors. “Boards do have an accountability and a responsibil-

ity here,” says All Raise’s Kostka. “There’s just a different standard.

When something does happen, it seems like they will allow more

evidence and more time for a man.”

Further complicating the issue is the question of how much

control a founder has managed to retain after selling stakes to

investors. Both Kalanick and Neumann maintained controlling

stakes in their companies throughout fundraising, from investors

willing to grant “founder-friendly” terms that few women say they

feel able to ask for. (According to a study last year, the average

4

SHARE OF STARTUPS VALUED

AT $1 BILLION OR MORE RUN

BY FEMALE FOUNDER-CEOS

That’s smaller than the percentage of

female CEOs in the Fortune 500 ,

which stands at 7.4%.

INVESTOR’S GUIDE • FEMALE FOUNDERS

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