What ails the PE and VC industry in gender diversity

“Of course gender diversity is important. I will be happy to have the women in my team associate with Winpe if they have free time. We are a busy fund.”

Now the flip side. “We have just one woman in the team so gender diversity is not a priority”.

“We have just one woman on the team and she is pregnant so we may end up with none. You can see why gender diversity is not important.”

“The only currency we care about is internal rate of return (IRR) and our LPs are happy with that.”

I can’t decide which bothers me more. The condescending tokenism towards gender diversity or the blatant disregard and disrespect for it. The tokenism bothers me because it does disservice to talented women, categorizing them as causes that need to be subsidized. Instead of looking at them as individuals with expertise, it slots them into a generic group based on gender.

It quite clearly misses the logic of ‘lets find the best talent’, ending up with a check-the-box exercise. Is gender diversity only about hiring a woman? Have you met your goal with that one hire? Maybe you have if that’s the only thing your LPs asked for. I should mention this instance when the only thing an LP’s gender action plan asked was for the fund manager’s team to get POSH training. Really? Could the bar have been set any lower?

Then there are fund managers who don’t care. At least they are honest. Not that it makes a difference to the women in their teams who are not even aware of how insignificant they are in the scheme of things.

Who said that IRR and gender diversity are mutually exclusive?!! Imagine, planning your motherhood while not realizing that your firm assumes that you are not coming back to work.

Let me share this fascinating insight I read—by questioning the state of equality in the industry and acknowledging that it is highly skewed in favour of men, it is possible that we are bringing into question the success of male leaders and their right to it. Would they have seen equal success if things were equitable? This makes some men uncomfortable and resistant. Interesting point, isn’t it, especially as you consider the number of alpha males in the PE/VC industry!

In all fairness, not everyone is this bad. There are fantastic investors, both men and women, confident and secure enough in their self-worth and pushing for gender diversity. I am fortunate to know them and work with them. People who are truly committed in a long term manner and are making efforts to change the situation. But what about the rest? Who is calling them out? Where are the women and the LPs?

Are LPs walking the talk themselves? How are they integrating gender into their operations and decision making? Is it enough to diligence a fund with a checklist that focuses only on point-in-time data and overlooks other critical factors? Are they not rewarding tokenism and engendering more of it? Most LPs say that it is difficult for them to push for gender diversity as they “owe it to their investors” to invest for maximum returns. But wait, isn’t there research to show that gender balanced teams deliver better financial performance? I also want to call out the women in the industry. Why are we so busy that we cannot take a stand for ourselves. Why are we willing to ignore the sub-text? Maybe because we are used to it and that has been the way to function. But are we so keen to be one of “the boys”, that we forget to claim our place? We can keep talking about the business case and the moral case with the industry, but for real change to come, women will have to come forward and take their place in the sun.

Nupur Garg is the founder of Winpe, and Board Member, Senior Advisor, PE industry.