An exciting and progressive shift has been happening within the startup investment space, with an increasing number of venture capital firms recognizing the need for greater focus on women-led startups. However, according to Pitchbook, women receive less than 3% of all venture capital investment, and nearly three-quarters of US VC firms do not have a single female investing partner.
The likelihood of a woman-led company receiving investment escalates by 30% when a woman is part of the investment committee and by 50% if it is a woman VC making the decision. Arguably, it is more crucial to have women on investment committees than promoting female entrepreneurship alone. The significance of women investors goes beyond investing in women, women should also direct the course of innovation, and invest according to their perspective and vantage point.
Historically, women-led companies required extensive support and guidance due to limited access to resources and networks, demanding greater time commitment from investors. The current landscape reveals a positive shift, with an increasing number of women-led businesses demonstrating robust management and operational independence, mitigating previous challenges, removing any bandwidth excuse by investors. That said, supporting companies that necessitate additional assistance and time investment is crucial to fostering growth for women.
From a Challenging Start to Widespread Investments
Reema Khan
exemplifies the transformative impact that female investors are bringing to Venture Capital. Reema founded Green Sands , a boutique VC investment firm, in 2017. Boasting iconic companies such as Spotify , SpaceX , Airbnb , Colossal , and Pasqal , Green Sands invests in healthcare, technology, space, and frontier tech.
As a woman Founder/CEO, Reema was scrutinized for not investing enough in women-led companies. In the early days, she would answer sheepishly, “We invest in the best founders and companies, we don’t need a gender lens because we aren’t biased.” In reality, women-led companies constituted a small fraction of Green Sands’ deal flow when evaluated against all other qualifying criteria for a company.
“It was something we really struggled with,” Reema intimated. Today, she is proud to say that some of the crown jewel companies in her portfolio are women-founded or led. These include BioAge (founded by Kristen Fortney), Space Perspective (co-founded by Jane Poynter), Encoded Therapeutics (co-founded by Stephanie Tagliatela), Stepful (co-founded by Tressia Hobeika, Elve Speed (founded by Diana Gamzina), Commure (led by CEO Ashwini Zenooz), and SpaceX (co-led by COO Gwynne Shotwell).
Reema emphasizes that Green Sands’ increasing proportion of women-led companies in the portfolio is especially gratifying as it has required no compromise on investment criteria. “It does our women-led companies an injustice to say we are giving them a priority for funding based on gender; we invested in them for their excellence,” she says.
A Future that Includes More Women-led Startups and Funds
Reema asserts that her portfolio’s focus on merit inherently necessitates greater investment in women-led companies as a VC. It is imperative to focus on investments in women-led technology and healthcare startups to balance out our ecosystem and tech and health landscape. “The way you ask a question limits and directs the answers,” she said. “Whether positive or negative, there is inherent bias in everything. Biases are fallacies unsubstantiated by facts, so we must add more input and facts by and about women; why would we want to invest in companies that are built with fallacies? Incorporating women into the building process helps counteract biases, fostering balance in the healthcare and technology sectors.”
To Reema, a few glaring examples of this come to mind: In healthcare, endometriosis is the most misdiagnosed disease due to male-dominated diagnostic and treatment bias . In technology, Generative AI is hindered by a deficiency in data about, and originating from women . According to NIH, there is an under-representation of women in clinical trials even for prevalent diseases across genders such as cardiovascular disease, and women athletes do not have access to the same quality of sports medicine that male athletes have. According to Harvard most products and services have an implicit bias toward male consumers.
Even wealthy women do not have the ability to become LPs in seasoned growth equity funds to back women meaningfully. There are many $10 million to $30 million women led and women focused funds that invest in seed stage companies, but hardly any $500 million and above in size that can invest in those companies’ growth like Green Sands. While Green Sands LPs include endowments, foundations, insurance companies, and other institutional investors, Green Sands reserves an allocation for women LPs with a low barrier to entry. On a mission to empower women to become stakeholders in shaping society for the betterment of our collective future, Reema and her team are enabling women across diverse economic strata to engage in investment. Women’s dollars should enable great innovations, and also create wealth for women. In general, financial services stand to benefit tremendously from focusing on women in offering products and services for this huge market. According to Nielsen , by 2028, women are projected to own 75 percent of discretionary spending in the United States. Women’s spending power is up to $10 trillion annually in US alone.
Creating Cultural Shifts
Beyond investing, Reema actively works on bringing cultural shifts through policy advocacy through platforms like the United Nations. “I am often asked why I spend so much time in the nonprofit or policy world and call it part of my investment thesis. Educating women in STEM is not the answer alone. We will create a highly qualified and frustrated class of women if we do not align the culture to foster inclusivity, diversity, and equity,” said Reema in her statement at the United Nations on Women in Science Day in 2023.
In acknowledging the trailblazing efforts of other women, Reema said “An incredible woman that I am a big fan of is MacKenzie Scott , who is empowering organizations that are helping undo biases and change cultures. I have studied her pattern of philanthropic donations, they aren’t random. Her contributions, though not limited to a single sector, vividly reflect her values, and lay a rich foundation for cultural change toward inclusivity and diversity.”
Moreover, Green Sands bi-annually awards the Green Sands Prize , honoring individuals who make a profound impact on the world. Interestingly, all the awardees to date have been women. Addressing inquiries about whether it’s exclusively a women’s prize, Reema explained, “Numerous awards are predominantly or solely bestowed upon men without being labeled as men’s prizes. The Green Sands Prize is a testament to excellence. The recipients, thus far, have simply been the most outstanding candidates for this honor.”
The 2023 Green Sands Prize was given to Gwynne Shotwel l of SpaceX, recognizing her contributions to the space industry, science, and technology. “Gwynne Shotwell’s contributions to STEM and business extend beyond her technical and business acumen; she symbolizes progress, equality, and limitless potential. She is a trailblazer who had the courage to go first, take on risks and personal responsibility to open a path for others to follow,” said Reema.
There is a lot of pressure on women to overperform. Reema highlighted an example. Recently at a conference, the organizers decided to have all women speakers on every subject, even though it was not a women’s conference per se. The attendees were mostly men, and the speakers were not announced before the event. Instead of being excited by this, many women in the audience were nervous, they wanted to be sure that every one of the speakers was incredible. They felt that there was no room for error. “Every time a woman goes up to address the world, we feel she represents not just herself, but all our abilities. There is immense pressure to be an ambassador for all women. On the other hand, no man represents all men. One failed woman CEO, one failed woman entrepreneur weighs heavier on our average since the sample size is so small. This can make women risk averse and critical of each other; we must reject this imagined pressure” emphasized Reema.
Reema views the future with optimism, highlighting the importance of robust networks among women at various echelons to dismantle glass ceilings. In Reema’s experience, women often have a scarcity mindset, especially early in their careers. Women think that the top of the mountain has room for only one, because we are used to seeing so few women at the summits. If we want to get far in this struggle, the African proverb, ‘if you want to go fast go alone, if you want to go far, go together’, certainly holds true. “As I am growing older, I am both receiving and dispensing more generosity in women’s circles. I wish I had this when I was young and struggling to make it. I hope I can be there for other young women now” said Reema. Sometimes it is not even about funding, or success, it’s simply about believing in and opening doors for each other.
There is a steady, albeit very slow growth in the VC dollars going into women-led companies. They may be small, but the number of women led funds is growing. There are still very few women led growth equity funds, and even fewer women as LPs in funds. This movement for a more equitable investment landscape has Green Sands at the forefront. Reema highlighted, “our team includes powerful men who are also fathers and husbands that want to see a brighter and more equitable future for women. Empowering women in VC, healthcare, and technology leadership transcends equity. It’s about introducing potent, diverse viewpoints that are pivotal for meaningful and quality innovation that steers us toward real progress.”
Amanda Reseburg About the Author: Amanda Reseburg has been a freelance journalist since 2016, with work featured in Scary Mommy and the Beloit Daily News. She was a creative entrepreneur for 13 years and founded her own hospice photography volunteer program, profiled by PBS. She lives in Orlando with her husband and three children.
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