The social impact project is building awareness through its research and podcast to get at least 30 per cent of women to make up space in the venture capital industry by 2035.
There’s a problem in the investment community: In 2019, only 15.2 per cent of partners at venture capital firms in Canada were women, and even lower in the United States at just 13.2 per cent.1
With venture capital being the primary funding source for most technology companies, some speculate that this stream deeply affects the types of projects being created. Unlike many industries that experienced losses during the pandemic, venture investment thrived and hit record highs in 2021.
Despite this, the first eight months of 2021 saw companies with solely female founders raising only 2.2 per cent of that funding—a lower share than any of the previous five years.2
Saskatchewan entrepreneur Katrina German has launched EthicalDigital.ca with the lofty goal of changing the trajectory of the internet. German’s team has expanded their marketing services to include major research projects, one of which named The Allyship, is an initiative aiming to adjust the number of women in venture capital to at least 30 per cent.
She says The Allyship is an initiative partnership with Silicon Valley venture capitalist Neal Dempsey, working to combat the underrepresentation of women in the venture capital industry through research and large-scale communications “to accelerate the current pace of social change.”
Pushing forward
Katrina German, Ethical Digital
“There’s an opportunity for businesses to step up and make people’s lives better,” German emphasizes. “We need to be talking to the decision-makers responsible for all of the big actions online. And who are some of the biggest players funding the internet? Venture capitalists.”
As part of The Allyship, Ethical Digital has launched an intensive eight-month research project with the Diversity Institute at Ryerson University to discover the barriers for women entering the profession.
German says the results will inform The Allyship’s large-scale industry awareness and action campaign that will function as a roadmap for venture capitalists, entrepreneurs pursuing investment, and policymakers.
“If you can be influencing the funding that’s going into the internet you’re going to be influencing the types of projects that are coming out, and right now women are receiving an all time low of investment from venture capital over the pandemic,” German says.
“If the internet is the future we need everybody contributing to that future, including women, including people of colour, you know, we need a very diverse group who are going to be dictating what that future of the internet looks like.”
Teaming up
Neal Dempsey, Bay Partners
The Allyship is working in partnership with U.S. venture capitalist Neal Dempsey. Dempsey is the managing partner at Bay Partners, a 35-year-old venture firm in Silicon Valley, California, which reports over $3 billion in successful returns.
With his decades of experience and ranking as one of the Top 100 Venture Capitalists on Forbes Midas List in 2013, Dempsey’s passion for the initiative and his well-developed network have introduced The Allyship to other venture capitalists in the global investment community.
“This program is something that I wish I could have been a part of ten years ago,” Dempsey says reflecting on his career journey and past successes.
He became an active ally five years ago after meeting Katherine Regnier, founder of Coconut Software, who was the only female finalist in his mentorship program, “Neal’s Running Start.” Impressed by the successful culture and company Regnier built, Dempsey committed to investing in and working with other women-led businesses.
“We need to have more women in the venture capital business and women in these technology companies,” Dempsey says.
Since then, Dempsey’s firm has been investing in more companies with diverse management teams and female CEOs. He is also releasing a podcast called Passing the Mic: The VC Exchange, where he speaks with women venture capitalists and female founders in interviews uncovering women’s lived experiences, insights, and solutions to address the diversity gap.
“What excites me is the opportunity to get more women involved. I think we’re going to get more women to consider being venture capitalists, investors, to start their own business or join a technology company because they feel welcomed in the space,” Dempsey says.
Proof in the numbers
“Increasing gender equality in venture capital is not only the right thing, but it’s also good for business,” Dempsey continues.
Academic research shows that firms with 10 per cent more female investing partners have higher fund returns and more profitable exits; whereas a lack of demographic diversity in venture capital teams is associated with lower investment performance.3
The Allyship is just getting started, and German is hopeful that the project will have a substantial impact on the investment space, internet, and future.
“Ethical Digital is changing the trajectory of the internet, and I’m proud to be one of many groups tackling this issue with our unique approach,” German says.
“My goal would be in fifty years people are [asking], ‘What are you talking about women in technology? That’s not an issue, there’s too many women in technology and it’s the most diverse industry of all.”
References
1Female Funders, “Women in Venture Report 2019.” https://femalefunders.com/women-in-venture/
2Glasner, Joanna, “Something Ventured: Despite Blockbuster Venture Investment, Female Founders’ Share Of VC Funding Falls.” Crunchbase News, September 2021. https://news.crunchbase.com/news/something-ventured-blockbuster-ventureinvestment-female-founders-funding-falls/
3Chilazi, Siri. “Advancing Gender Equality in Venture Capital.” Women and Public Policy Program, Harvard Kennedy School, October 2019. https://wappp.hks.harvard.edu/files/wappp/files/gender_and_culture_in_
vc_literature_review_final.pdf