You're listening to Bloomberg Business Week with krol Messer and Tim Stenebek on Bloomberg Radio.
One of the things we talk a lot about here at Bloomberg. We've done some great reporting what goes on with female founded startups. No secret that they account for only a tiny, tiny portion of the venture capital that's deployed each year. So here's some numbers for you. In twenty twenty one, for instance, female founders secured only two percent of venture capital in the US. That's according to the research firm pitchbook that follows all of this, Tim, and.
That was a year that VC money really flowed. I mean twenty twenty one, those were the boom years. The last eighteen months have been a different story entirely. We've got with us right now Test name Dohadwala, founding partner of Excelstar Ventures. The VC firm says it invests in quote clear disruptive technology. They've got a lot of medtech on there, really cool stuff and really cool companies that they've invested, and they're also passionate about funding women and
minority led companies. Very pleased to have test name with us this afternoon. So test name give us an idea of what you've experienced and what you've experienced working as a VC, and also what you've experienced as far as the companies that you funded. Is this a is the problem? I kind of know the answer here, but I'm still going to ask this anyway. Is the problem that only two percent of the companies are actually founded by female founders?
No? I mean I think that there it's a systemic problem, and I think that the issue is that it's it's an everybody problem. It's not just a you know, the funds that are focused on investing in women. Everybody needs to work at this problem. So, for example, I know that in VC firms, only twelve percent of VC firms have women as decision makers, and sixty five percent of VC firms still don't even have a single female partner, and females are noted to be more likely to invest
in female led companies. So I think that itself, we just don't have enough women investors in decision making roles investing in women. So I that's one of the issues.
Testing. I want to jump in off though for a moment, because I remember Bluemberg did a story I think it was out during the pandemic, and it was even about female venture capitalists were less inclined to even invest in female founded ventures, and whether it was pressure within a firm or what have you, it's just like everyone stays away. Help me out, So go ahead, continue with your reasons why, because it's just mind blowing.
So it's I think there's a little bit of well, you know, this person is experienced entrepreneur, they've had several exits. Well, if you keep investing in just experienced entrepreneurs that have had prior exits, and you're probably going to keep investing in males because a lot of female led companies are first time entrepreneurs, and you have to be willing to take a risk on a first time entrepreneur, and it
may appear more risky. But I also think some of it has to do with the way we ask questions. There's been a lot of research that says that all investors ask women sort of risk mitigation type questions, and we ask men growth mindset questions. And so if you're going to change the way you ask questions to your entrepreneurs, you're going to have a different outcome in the way
you perceive the company. So For example, at excel Start, we have a really structured way we do diligence, and so we make sure that we're asking same type of questions to all of our entrepreneurs. We have a quantitative and a qualitative way that we do it. We have a matrix that we fill out and a really robust report.
But if you're sort of just flying by the seeder cuffs, then your own subconscious biases are going to determine what type of questions you're asking, and that changes the outcome of how you perceive the company and the opportunity that it may be that it may have.
What do the data show as far as returns and who's leading companies?
So I mean, if you think about the data right now, I think there's only been twenty women who have ever led a company to an IPO. And I don't think that's because women don't want to lead companies to IPOs.
I think that there's a bias. One of our companies just recently was determining whether they wanted to hire a certain executive and not the CEO role, but in a very senior important role, and there was some question around whether or not that women would be able to potentially in a few years be a key management director while leading the company to an IPO, and a few not just myself, but another male board member spoke up and said, well, she we haven't even hired her. Let's get her in
the door. Let's see how she does, and we'll make a decision when the time comes whether or not she'll be suited to be in the role during an IPO. So there are some assumptions that are made before women can even get into the door and make an impact in the company.
So Devil's advocate a little bit because I do believe, especially in a capitalistic society, that money talks, and if there's a good business, I don't care if a monkey or a frog is running it, like people are going to invest in it. Is there something else that's missing that just I mean, look at the creator of spanks.
She created a billion dollar business like people women create, you know, Kardashians like whatever, go everywhere you want, Like people create billion dollar Oprah, like people create women specifically create successful businesses. But I'm just I'm wondering if there's something else missing in the trajectory that doesn't allow women to take their ideas and really run with it or attract again the investors that ultimately create a female run
Google alphabet a female run Tesla. You know what I mean?
Well, I think that I do think that there are a female I think a lot of female. When you think about entrepreneurs, a lot of them are thinking about what is in their realm of expertise or what have they experience in life that drives them to found a
certain company. Right, So, if a female is finding founding a company based on the female experience and she's pitching it to male venture partners, there is a possibility that isn't going to resonate, and we have to look we have to look at the reality that we're faced with. If you're if the decision makers are going to be men and they're the ones who are you know, owning the lion's share of investment dollars, then you have to I'm not telling you to change your idea. What I'm
suggesting is that you people need to be aware. Women need to be aware of these biases and then adjust their pitch such that it may still be a wonderful opportunity based on the male experience, but they need to make sure that they present it in a way that resonates with their male counterpart. Not everything about the female experience will resonate with males, and so you have to perhaps adjust your pitch. Think about how you know, how are you doing the market sizing, What are you talking
about exits? Do you have enough exit potentials? A lot of times, for example, if in a women's health company, whether we like this or not, in med tech, there aren't that many large medtech players that have sizeable women's health divisions, right, and so if you have a women's health medtech company, but you don't have perhaps a very distinct way of exiting to a sizable acquirer that shows an acquisitive nature, then investor is going to push back on that.
So I go ahead, no that' no no, no, no, no, no, you're saying really smart things. I guess that I'm just thinking again, I'm playing Devil's advocate. Like if Mark Zuckerberg had been Maria Zuckerberg and she created Facebook? Would would she have gotten the money to create Facebook? Now?
Meta? I don't know, because I do see some of our female entrepren and they are fab many of them, I mean, some of them have issues just like our male entrepreneurs do. But I just find that females also don't have as much of a network. I don't know if it's the sort of that old boys network that continues to prevail, but they just don't seem to know enough investors. And I also find them that they're not
as assertive with their investors and asking for introductions. So only my male for example, when we're sitting in the board and we're sort of, well, I have this company and we're experiencing XYZ, this could be helpful. These are why my thoughts are this, and I'm giving advice to
a company. Most of the time my male CEOs will say, hey, can you introduce me to that CEO so I can learn a little bit more about you know, what you're talking about, so I can really understand whether it be clinical design or you know, acquiring customers something another company. It's very rare that a female will proactively ask me. It happens, but you will proactively ask me to make introductions for them I have to offer. I will go back and look at my rolodex and say who can
I introduce you to? But they will not proactively ask me, as an investor to make introductions for them, which I I have some, but that makes a big difference.
We're gonna let the guy wait. The guy in the room want to say, I.
Just want to ask a question quick. I just want to ask a question, Okay, And just you know one phrase. The most exciting area you're investing in right.
Now, ooh, personalizable tailored medtech companies that function very much like therapeutics, and their functionality is able to basically shift and conform to the anatomy of our human bodies and able to really create therapy in a way that only therapeutics have been able to do in the past.
I have to say, I have a niece who's a doctor, and she's a good friend that has doctor do and they say, it's amazing, like the differences of things that aren't done for women in healthcare and medical devices. I'll talk to you about it, but it's just the perspective of and things that are covered by insurance for men versus women. And just Matt talked about it with breastfeeding for his wife specifically, and just things you know that come problems and stuff that you know there isn't research
followed for women. So you make such a valid point, and you think about the in roads. And I also think about if this money isn't going to these companies, women who are starting companies like you, think about it, if they were allowed to run with it, what kind of businesses they would create? What that would mean for you know, public companies, market caps, economic momentum, right, job hiring, Like, how much we are ignoring at this point.
There is actually a company that I know that would have been a fabulous company, would have changed the trajectory of a disease that we all struggle with as women. And unfortunately, because the Acquirer spun off their women's health division, the technology was shelved, even after they paid a lot of money for it, and never made it to market. It's really sad.
That's amazing. That's amazing. Hey, listen, incredible stuff. Come back soon. We'd love to continue this conversation with you. I really feel like this was a very productive one because I feel like it's a topic we've talked about for years, but you really got to some of the core of the problems. Tusney Doha Dwala, she's founding partner at Excelstar Ventures, joining us on Zoom from Boston, really cool conversation.
Yeah, a lot of cool companies they've invested in. No, but data, augmenics and more. This is Bloomberg