Editor’s Note: This is a guest post by Dave McClure, Founding Partner & TroubleMaker, 500 Startups.
Apologies in advance to everyone I’m going to offend with this post, men and women included. If I appear to be moronic, self-centered, or sexist… it’s only because I am (I’m a guy). Still I believe my heart is in the right place, and unlike my head, hopefully it’s not in my pants. But whether you agree with me or not, I’d like to get past “talking” about gender issues and start taking action… action as in get off your butt and write a check for some startup who could really use the money.
Over the past decade I’ve been a strong supporter, promoter, and investor of/in women in tech. In the past two years alone, 500 Startups has invested in 50+ women CEOs and ~100 women co-founders. In fact some of our best-performing companies are/were led by women — SlideShare, Wildfire, TaskRabbit are just a few, and many others are kicking ass too.
So forgive me if i’m getting a little tired of people telling me: 1) Why I need to put more women speakers on panels at conferences (we’re trying), 2) How women are still at a disadvantage in tech (yeah, i know), or 3) What MEN should be doing to help WOMEN in tech (sure they could do more, but frankly it’s your problem not theirs).
To which I reply: Physician, Heal Thy Damn Self. You don’t need men to solve the problem.
Stop Talking About The Problem and Become Part of The Solution.
I’d like to CHALLENGE every woman in tech who’s a) got a nice car, b) owns a nice house, or c) is making over $125K a year to start thinking of themselves as the next Ron Conway or Esther Dyson in the making, and commit to investing in startups… some of which might even be run or founded by women. Contrary to popular belief, you don’t need to be rich, you don’t need to have an exit already, and you don’t even need to know much about angel investing (although I encourage you to learn more via Angel List, Quora, Women 2.0, angel networks, blog posts and other resources). You just have to be willing to step up and empower yourself to make a difference.
Even a small check can have a big impact, especially when companies are raising their first $50-250K. You probably have something to offer that might even be more important than the money — but still, money counts too and is an important part of the equation. You can invest in women, in men, or in your dog, I don’t really care… but put your wallet to work. It’s really not as hard as you think. There are thousands of great new companies looking for investors on Angel List, and via other networks. In just a few clicks, you can research several companies, connect with the founders, decide which one(s) you like, and put your money where your mouth is.
In summary: STOP TALKING about what’s not working and start TAKING ACTION to create solutions — open up your checkbook, and write a check for your favorite startup. And if you feel like it, write three little checks instead of just one bigger one.
Take The WIN Challenge: Commit NOW to Invest in 3 Startups.
What I’m challenging you to do RIGHT NOW is to COMMIT PUBLICLY to make three (3) investments of $5,000 or more in startup companies in the next 12 months. If you’re ready to do that, then please click on this link NOW. If you’re not ready yet, then keep reading.
For some of you $5-10K might seem like a lot, but I bet you’ve spent far more on a vacation, on the deluxe package on your new car, on your MBA or graduate degrees, or possibly even your wardrobe. For most of us in Silicon Valley, $5K is a manageable amount we can afford to lose, and indeed many of us throw that sum or more away on far more frivolous things… like the stock market or real estate ;)
While making money investing in startups is not guaranteed, investing in startups is one of the best ways to learn about how the industry works. And whether or not you make money, I bet it can do as much for YOU as for your bank account or the founders you invest in. My own personal investing experiences have been some of the best ways for me to learn how founders and investors can grow and lead companies. And, in a few cases I made money too.
Lastly, as mentioned you don’t have to invest only in women-led startups, but obviously you might want to do that if you think it’s a good investment. We certainly have found a few.
Women Can Be More Active, Visible, Vocal as Angel Investors.
While many women have broken through barriers to become startup founders, VCs, board members, or tech CEOs (in fact, I hear this pregnant lady did it just yesterday), one of the roles where women have largely FAILED to make much visible impact is in angel investing. Esther Dyson is one of the more famous women angels and has been investing for decades, and notable folks like Caterina Fake, Marissa Mayer, and Randi Zuckerberg have also become angels in recent years, as have others from Facebook, Google, LinkedIn, Twitter, Yahoo, Amazon, Microsoft, eBay, and other non-tech companies as well. Even folks as young and new to the industry as Danielle Morrill, a first-time entrepreneur herself and mentor at 500 Startups, has made several small investments in other companies. But they are exceptions.
Aside from a few stories here and there, we generally don’t hear about women angel investors anywhere near as much as Ron Conway, Peter Thiel, Reid Hoffman, or even less famous / less rich dudes doing angel investing. There are probably hundreds of women angel investors who you and I have never heard of as well… and that’s just a damn shame.
Perhaps this is because they don’t like to brag about it as much as guys do, or because they don’t feel the need to get their names in the press. Or perhaps it’s because the press doesn’t feel it’s necessary to highlight women as angel investors. Or maybe it’s because women don’t feel like angel investing in tech startups is a good bet. But it’s not because they don’t have the money… there are likely THOUSANDS of modestly well-to-do women in tech with $25-100K or more sitting around, but who have never even thought seriously about investing in startups.
Meanwhile, there is UNENDING whining and complaining re: not enough women as tech speakers, tech VCs, tech founders, tech board members, etc — but hardly anyone talking about getting more women to be investors who can create their own solutions. With all the sound and fury of people accusing men of bias and discrimination (which I don’t deny), you’d think there’d be more women stepping up to the plate to fund their sisters-in-arms. Unfortunately, it isn’t so — there just aren’t many women investors, and those that are, aren’t being visible or vocal enough.
One successful female exec I know even told me “There’s a special place in Hell for women who ‘make it’, but aren’t willing to turn around and help their peers who haven’t.” (Her words, not mine). Seriously ladies: WHAT IS YOUR PROBLEM? If you’re a believer, then be an investor.
Ultimately, as with other tough race and gender barriers to break through, the biggest problem in my opinion is the lack of visible role models to help get the ball rolling. It takes risk, it takes leadership, and it takes broad-based participation to create a path for others to follow. We need more examples of women as angel investors who make money and impact from their investing. But we can’t wait for only the rich and famous to lead the way — everyone can be a role model, and it only takes a few tiny first steps to get started. So why don’t you get started?
Even Poor Village Idiots Can Become Good Angel Investors
If your excuse for not getting started as an angel is you don’t think you know what you’re doing — congratulations, you’re in good company. Even experienced VCs will tell you they have to make educated guesses, and sometimes rookies are as good as veterans at picking winners.
When I left PayPal in 2004, I was not even a single-millionaire — I had about $300K in savings, and I had just put a down payment on a small house on the east coast where my mom lives (note: I don’t own a home in California; it’s expensive out here so I’m still a renter). However, I started doing ~3 investments per year, at around $25k each. After 4 years and several mis-steps, I had invested in 13 companies including Mint.com (later sold to Intuit for $170M) and in SlideShare (run by a female CEO, recently sold to LinkedIn for $120M). After 8 years, I’m now up ~2x, perhaps another 1-2x on paper. I may not be Warren Buffet, but it seems I’ve done as well or better than others who invested in the housing or stock market.
While I was fortunate to have some notable wins, even if I hadn’t made money on those deals, the experience has been a great one for ME personally. Sure, I made some dumb mistakes, and I invested in companies that didn’t work out. I had a lot to learn about legal structure and valuation, and it took me almost 4-5 years to really figure out what I should be doing. But there is no way I’d have been able to start my own fund years later had I not dived in early as a rookie angel investor. Furthermore, there is no way I’d have dived in early without peer examples at PayPal and role models like Ron, Peter, and Reid who were actively visible angels.
But unfortunately for women, all those role models are men. Although Esther, Caterina, Marissa and others should be lauded for their efforts, they just haven’t been quite as public or as attention-seeking as their male counterparts. More important, we don’t just need three famous rich women investors… we need three thousand not-so-famous, not-so-rich women to step up and change the landscape.
You Don’t Have to Be An Ass Like Me, but Stop Being a Wallflower.
Ultimately, the problem certainly isn’t that there aren’t enough women with money as investors, nor any lack of talented women founders with good ideas or products — there are plenty, thanks to organizations like Women 2.0, Girls In Tech, and many more every day. But over and over, I see talented rookie women founders left high and dry by both men (who don’t get their business or them), as well as women (who don’t see themselves as part of the problem or solution).
In closing: you don’t have to be as much of an asshole or loudmouth as me, and you don’t have to take any of my suggestions above. But I hope you realize you don’t have to be rich or famous to make a difference — you just have to have the gumption to get started.
So I hope you’ll take our challenge, and make an investment — in others, as well as yourself.
(ps – thanks to many women who helped proofread early drafts of this post… most of whom I didn’t listen to about how to make it better / more effective. special thanks to my partners at 500 Startups: Christine Tsai, Christen O’Brien, and Bedy Yang — you rock.)
(pps – if you’re a woman who has made an angel investment of at least $5K in the past few years, PLEASE SAY SO in the comments below. tell us who you are, what companies you invested in… assuming you feel comfortable about what you’re doing, it helps to know!)