Venture capitalists who do not have women in charge find it hard to understand businesses that cater to women, the CEO of Nykaa said.
On Saturday, a top executive at Nykaa, a beauty, and wellness e-commerce site, claimed that male-dominated venture capital firms that lack women in high-level decision-making roles fail to understand a women-centric company.
CEO Adwaita Nayar of Nykaa told attendees at a FICCI event that the founders of her company had tried harder to find investors initially in the past. They got rejected because there are not so many women in higher positions at venture capital firms.
“Initially, we must have talked to around 100 investors. They all answered no, we are not interested. These are the same investors who are suddenly very keen. A big part of the issue is that many venture capital firms do not have any women in investment positions. You cannot comprehend women-centric business until you have women making decisions on the opposite end,” Nayar explained.
She co-founded Nykaa with her mother, Falguni Nayar, and her brothers joined three years ago.
“I believe that perceiving gender discrimination has occurred in various ways over the previous 9-10 years to me,” Nayar remarked.
The Real Bias
Incident 1-Nykaa
When the firm contacted bankers for its first public offering, Nayar observed that bankers were applauding her brother for building up the business, so she interfered and informed them that she had helped Nykaa build up the business.
“I had to stop them at one point. I assisted in the development of this company. As a result, you must speak out for yourself. You have to make room for yourself. You stand for yourself due to prejudiced times. They do appear often,” said Nayar.
Incident 2-Other Women in VC
To persuade a billionaire to invest in their fund, a lady venture capitalist joined a male colleague. The potential limited partner (LP) was in his mid-50s and wealthy in financial services. She and her colleague were pitching together, but the investor only talked to the male partner, says the woman investor. She felt virtually ignored.
Another female VC stated she is regularly “mansplained” to in board meetings “by other investor board members. A male board member will either complete my words for me or ignore me while another man says the same thing in a different manner and is then heard. I’ve been pointing them out,” she explained.
Due to gender disparity, women investors still face discrimination from investors, colleagues, and entrepreneurs.
Situation in India in Venture Capital Firms
The Indian venture industry is much more male-dominated than the US. Venture capital firms in India have tried to hire more women in the last few years. Most are still mostly run by men, especially at the top level.
According to Mint, just three of the top twenty venture capital companies in India have one female partner: India Quotient, Lightspeed India, and Kalaari Capital. The rest of them don’t have a single woman partner.
According to International Finance Corporation (IFC) research, women make up about 7% of top investment professionals in India’s private equity and venture capital sectors. This is much low compared to other countries.
Need for More Women Investors
Aside from the larger sexism issue, recruiting more women investors makes commercial sense as more women utilize the internet. Women consumers are helping to fuel growth in industries such as content, e-commerce, and healthcare.
For example, two female entrepreneurs present to a group of angel investors a period product that is a replacement for pads and tampons for younger women and teens. In this scenario, only women can connect with the use cases of the products and explain them to men.
Apart from apparent benefits, more female investors are needed to create a positive work environment at funds, companies, and the whole startup ecosystem. “Working styles vary by gender, so having variety in thinking is beneficial—it results to even more balanced decision-making,” said Ruchira Shukla, IFC’s venture capital practice’s regional head (South Asia).
Power and Wealth Connection
Most funds do not make a real effort to recruit more women. Funds often employ investment specialists from management consultancies, tech businesses, significant startups, or previous entrepreneurs. They either hire recruiters or utilize social media. You’ll hire a guy if you view 70 male profiles and 10 female ones. If you view an equal number of profiles, you will employ an equal number of men and women. Males still dominate the investing function, which is the core of power and money. Even after being aware of the issue, many male investors do not regard it as a serious concern.
An investor requires to be aggressive, ruthless, risk-taking, and self-promotional. That is how people think. Because of this image, some women are turned off and do not believe the venture business is for them,” stated a female investor.
Difficulty in Networking
The absence of female investors is evident during networking events. Networking creates connections, relationships, and transactions.
When I go to networking gatherings, I see a lot of shirts and blazers but no saris, salwar, or pantsuits, “said a senior female investor.
The fact that many male investors prefer to network with other males makes networking difficult for women. Among the more direct examples of gender problems that women face is when meetings turn into dates, which is a problem that some young women investors face. said a woman. These types of instances make you skeptical about networking, said a woman investor.
To Conclude, When there aren’t many women investors, it shows how the startup world works. However, in India, LPs headed by development finance institutions are only now pushing funds to address gender diversity.
Women must take a position for themselves when it comes to expressing out in any field; only then can the boundaries be erased.
Published By: JAINAM SHETH
Edited By : KRITIKA KASHYAP
