May 6, 2015, 12:04 PM ETConference Presentation, Panel

Women: Key Players in High-Growth Investment Strategies

Despite women comprising over 60% of PhDs and more than half of the college-educated population in the U.S. for 30 years, they remain significantly underrepresented in private equity and venture capital.
Less than 5% of venture capital capital flows to women-led companies, a statistic that has remained stagnant for 20 years despite over 1,200 early-stage deals seeking investment annually.
Fewer than 5% of general partners (GPs) in venture capital firms are women, creating a disconnect between the supply of qualified female talent and the realization of investment opportunities.
Research cited by CalSTRS indicates that companies with three or more women on their boards outperform those with fewer female directors, debunking the notion that diversity is merely a social initiative rather than a financial strategy.
MIT and other institutions have published data showing that diverse, inclusive teams outperform homogeneous teams, even when the individual intelligence of diverse candidates is lower on average.

CalSTRS, managing nearly $200 billion in assets with a 72% female population, is actively pressuring private equity firms to increase female representation, citing the failure of current "one woman in the room" meetings.
Chris Ailman (CalSTRS) proposes a "Rooney Rule" equivalent for corporate boards, mandating that at least one diverse candidate be interviewed for every open seat, even if the candidate is not a former CEO but holds executive roles like CFO or COO.
Seema Chandra launched "Girls Who Invest," a newly incorporated initiative designed to create a massive pipeline of women entering asset management by engaging high schools, colleges, and business schools.
Melody Carlson (Ariel Investments) introduced the "Three Ps" framework (People, Philanthropy, Purchasing) to hold corporations accountable, noting that success is linked to hiring diverse leadership and engaging diverse suppliers.
Shana Madra (entrepreneur and former Google Ventures investor) advocates for entrepreneurs to demand diversity from GPs during due diligence, suggesting that hot deal flow could force institutional changes if top founders only accept capital from diverse teams.
Panelists argue that individual investors should leverage their purchasing power by demanding women-owned or minority-owned firms in 401(k) lineups and engaging financial advisors to shift capital allocation based on customer preference.

The industry suffers from separate business networks where men and women do not socialize or network at the same volume, hindering the trust-based "gut checks" essential to private equity deal-making.
Unconscious bias is pervasive; a Harvard/Wharton study cited indicates that attractive white women are 60% less likely to receive funding than white males when all other factors are equal.
Women in finance face a "Series A crunch," where they secure seed funding but struggle to access follow-on capital from male-dominated Series A and later-stage funds.
Bias extends to equity crowdfunding, which panelists fear may exacerbate the gap by limiting women to micro-funding ($115k vs. male counterparts) without the mentorship and network access required for scaling to $100M+ rounds.
A significant barrier is the lack of "household name" female entrepreneurs and GPs in Silicon Valley to serve as role models and disrupt the established "male handshake" network.
Panelists note that while institutional VC has lagged, women have found success in microlending and specific angel groups (Springboard, Golden Seeds, Astia), though these remain a "sideshow" without top-level disruption.

Seema Chandra distinguishes between mentors and sponsors, urging women to identify male allies who will actively accelerate their careers and measuring their performance on sponsorship outcomes.
Melody Carlson argues against "check-the-box" diversity, insisting board members must be willing to speak up on inclusion issues or risk being tokenized without driving change.
The panel highlights the critical need for women to "pull each other up" through networking, countering the fear of competition for limited slots, with examples like the "30% Club" in the UK and regional centers like "Girls Who Invest."
CalSTRS is implementing a compensation-linked metric for sponsors to ensure they are actively mentoring and promoting women, moving beyond voluntary initiatives to enforceable cultural standards.
Shana Madra suggests that the transfer of wealth to women (due to the aging baby boomer generation) will eventually force the financial services industry to diversify to serve these new customers.
A specific anecdote involving a female hedge fund manager illustrates deep-seated bias, where her investment ideas were attributed to her husband by male allocators despite her demonstrating expert knowledge.

Panelists express concern that without addressing the "top of the pyramid" (LPs and GPs), bottom-level initiatives like angel groups and crowdfunding will be "trampled down" by the dominant institutional strategy.
The consensus is that the industry must stop "admiring the problem" and move toward holding companies accountable through shareholder voting, as demonstrated by CalSTRS' proxy voting influence on corporate boards.
The panel identifies a lack of "diversity of thought" in homogeneous teams, arguing that true inclusion requires not just demographic diversity but the presence of individuals willing to challenge the status quo.
There is an acknowledgment that while the "pipeline" problem is real, the "culture" problem is more immediate, with firms often claiming a lack of resumes as an excuse for not interviewing women.
The discussion concludes with a unified call to action: entrepreneurs must demand diversity, LPs must enforce it, and women must build robust support networks to ensure sustained growth and retention in the investment sector.