By: Heather Johnson
Many of you will be familiar with communications consultant Merrie Spaeth, who served two terms in the White House under President Ronald Reagan and now has her own firm. I’m a huge fan of the work she does, and she recently shared a fascinating article exploring the unique communication challenges that female entrepreneurs face.
When Venture Capitalists asked women a question, they were often “prevention”-style questions, such as “What do you see that could go wrong?” This led to defensive answers.
Men, however, were asked “promotion”-geared questions, such as, “Where do you see huge opportunities for a payoff?” which led to confident answers, and they were given “another opportunity to promote their idea and their expectation of success.”
Spaeth observed that women were “assumed to be more cautious, more conservative, [and] less likely to take risks.” As someone who has worked in the financial services and private equity space my entire career, the differences she described didn’t surprise me.
After all, the gender imbalance within private equity firms is glaringly obvious. According to Pitchbook, only 11% of upper-level private equity executives within U.S.-based firms were women.
So, how can people raise this percentage and encourage diversity?
Women can build their own communities to support one another.
In my experience, I’ve noticed that women and men network differently. Women build fewer relationships, but they are deeper.
They also turn to peers outside of their company for advice on negotiating salary, work-life balance, and dealing with family stressors, since many do not have a co-worker with which they can (or want to) share things.
Women are also seeking out other women at their level of experience and expertise through formal means, such as industry-specific groups. I’ve seen more and more of these crop up in recent years. In fact, I recently started a group for women in private equity and already have many members on-board.
Hire women into roles at all levels.
Anyone in a position of making hiring decisions needs to make sure they are hiring people at all levels, from investor relations positions to more senior roles.
Having this entire continuum ensures there’s a pipeline of female employees ready to rise up the ranks. Also, having senior-level women on a team makes it easier to recruit younger women to join — and then grow within a firm.
Take chances on hiring.
People can sometimes be hesitant to hire employees who have different backgrounds. However, people who hail from different environments — and have had different experiences — bring different, refreshing perspectives.
Companies with homogenous workforces are also missing out on great ideas — for example, I’ve seen firms with women in operating partner roles lend great perspectives on deal sourcing. Above all, experts have proven that diversity is also crucial to the bottom line.
In 2019, Pacific Corporate Group reported that private equity and venture capital funds with gender-balanced senior investment teams “generated 10%-20% higher returns compared with funds that have a majority of male or female leaders.”
[Related: Quota or No Quota?]
Heather Johnson is a partner with Chartwell Partners.
Originally published at https://www.ellevatenetwork.com.