The gender gap in venture capital (VC) only grows wider as one moves up the rungs. Female cheque writers remain the exception in the industry, as shown by the recent DealStreetAsia – DATA VANTAGE report on female investors in Southeast Asia’s venture ecosystem.
VC firms founded and led by women are even rarer. Valerie Van Vu, who established early-stage VC firm Ansible Ventures last year, says her decision to launch the firm as a solo general partner (GP) to back female founders was met with questions and even discouragement.
“As a woman and new fund manager who entered the startup investing game later than my male counterparts at more established large funds, I faced a steeper wall of scepticism. I was rejected by a prospective LP for being a solo GP but later found out that they invested in another male solo GP,” she recounted in an interview for the DealStreetAsia report.
The former Vietnam head at Venturra Capital says the gender gap in VC has wider repercussions for diversity in the startup world, especially as fundraising becomes tougher for most businesses.
“The tech industry is entering its second year of a downturn, and the global economy appears to be on the brink of a recession. This means that raising capital will become more challenging for everyone, particularly those without access to the exclusive network of powerful VC players. Although there are more discussions and mentorship programmes for gender diversity in VCs, we need to be more efficient and make clearer progress,” she said.
Excerpts of the interview:
Could you share your journey in VC leading to your establishing Ansible Ventures?
In 2019, I joined VC investing after a three-year stint in alternative investment consulting, where I first developed my passion for startups and venture capital. As the Vietnam country head at Venturra Capital, I led over a dozen investments and had a front-row seat in building the startup ecosystem in Vietnam. During this time, I observed a funding gap at the pre-seed stage for the country. In late 2021, I began incubating the idea of starting an angel syndicate or a pre-seed fund. After receiving the advice and endorsement of my mentors, I officially launched Ansible Ventures in 2022.
What were the challenges you faced during this journey? How difficult is it for a woman in a male-dominated industry?
Some individuals have questioned me about my intention to invest only in female founders. Additionally, some even discouraged me from pursuing this path, which is not a question or treatment that male general partners typically face. Networking events hosted by venture capitalists have also shown a preference for male participants, with women sometimes being discussed disrespectfully.
As a woman and new fund manager who entered the startup investing game later than my male counterparts at more established large funds, I faced a steeper wall of scepticism. I was rejected by a prospective LP for being a solo GP but later found out that they invested in another male solo GP.
Why do we see fewer women in investment decision-making roles at VCs in the region?
Venture capital’s lack of diversity is far from new, and this is not just a regional issue. VC investment and recruitment are still largely based on relationship models. As long as there are more men in positions of power who are more likely to invest in those who they know, this will be perpetuated. Women have less access to this exclusive network and therefore are less likely to secure promotion to decision-making roles.
Do you think there is a correlation between the lack of diversity at VC firms and the gender funding gap among startups?
There is a clear correlation between the lack of diversity at VC firms and the gender funding gap among startups. In the past, male VCs rejected startups such as Pinterest, Stitch Fix, and Bumble because they didn’t feel excited or connected to the problem being solved. This highlights the importance of diversity in thoughts and experiences brought by female investors.
Research shows that female founders who received early support from female investors were only half as likely to secure follow-on funding compared to those who received early investment from male investors. I am also proud to announce that my latest investment is a female-led startup.
Are things getting better now? How do you expect gender diversity in VCs to look in the next few years?
I am neutral regarding this question. The tech industry is entering its second year of a downturn, and the global economy appears to be on the brink of a recession. This means that raising capital will become more challenging for everyone, particularly those without access to the exclusive network of powerful VC players. Although there are more discussions and mentorship programmes for gender diversity in VCs, we need to be more efficient and make clearer progress.
Do you think LPs care about gender diversity at the VCs they commit capital to?
Yes, some limited partners, such as impact funds or impact-driven family offices, are pushing for gender diversity in the general partners that they commit capital to. However, according to a study by Morgan Stanley, only half of the VC firms surveyed have ever been asked by their LPs to prioritize investments in women and minority founders. Most haven’t actively made a requirement for VCs to hire female partners or invest in female-led startups.
What advice would you give other aspiring women VCs?
Ask for what you want and be willing to take risks. You may not always get what you ask for, and rejection can be painful. However, persistence can increase your chances of success. Additionally, strive to be a lifelong learner and maintain a growth mindset throughout your career.
This interview appeared in the Women in SE Asia’s VC Ecosystem 2023 report, which is available exclusively to DealStreetAsia – DATA VANTAGE subscribers. Subscribe/upgrade your subscription now to access our entire set of reports.