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