500 Startups was a wake-up call

James Riley
Editorial Director

The 500 Startups scandal in Victoria appears to have jolted the country’s venture capital community into acknowledging the need for more female involvement in the tech and innovation ecosystem.

So says Vicky Lay, one of four managing directors at Artesian Ventures, a venture capital firm that does everything from early stage to series funding and, along with AirTree Ventures, topped the list of major Australian VC funds backing female led startups in a survey conducted by the AFR.

Last August the Victorian government nixed almost $3 million in funding from global accelerator 500 Startups after more than a month of negotiations that followed revelations of sexual harassment allegations against founder Dave McClure.

Vicky Lay: Seeing a lot more female analysts and associates hired in Aussie VCs

The government’s $60 million innovation fund LaunchVic terminated the funding after 500 Melbourne lead Rachael Neumann resigned from the organisation.

At the time, LaunchVic chief executive Kate Cornick said the government no longer held trust in the organisation without Ms Neumann’s involvement.

Ms Lay says the local fallout from the 500 Startups incident has galvanised the local VC scene into looking at how it treats women.

“After the 500 Startups debacle, everybody got scared,” says Ms Lay. “Prior to that it was something people just didn’t want to talk about.

“Then it happened and everybody thought we probably need to do something about this,” she says.

While the 500 Startups scandal may have highlighted the problem, Ms Lay is hopeful that momentum for stronger female participation keeps going.

“What I have seen a lot of (lately) is female analysts and associates being hired. I have seen a lot of female intern roles being created.”

At 28 years of age, Ms Lay has already seen a lot of the VC world both here and overseas. She has already managed a startup and pitched along the famous Sand Hill Road in Silicon Valley.

As Ms Lay writes in her Linkedin profile, she has had to contend with ‘minority’ issues along the way and is committed to changing entrenched attitudes.

“Being a relatively young, Asian, female founder turned VC who grew up in the not-so-polished parts of Western Sydney, I am the epitome of what you would call a ‘minority’ among the founder/board member/investor circles and frankly, I’d like to change that,” Ms Lay writes in her profile.

Ms Lay recently served on a panel at the World Capital Markets Symposium 2018 in Kuala Lumpur which examined “the challenges impacting the progress of women in leadership roles”

One line of thought on some women being at a disadvantage when it comes to pitching for capital, more pay or a job opportunity is that women tend to be more honest in their self-appraisal while men tend to talk themselves up beyond their actual competency.

Ms Lay says some women do come across as more reserved than their male counterparts.

“I have noticed that women are more honest or just more reserved, not just in the pitch room but also negotiating as employees or when asking for a job. They tend to think they are not qualified. It’s more of an empowerment issue. Thinking I can reach those higher numbers or I can do that job,” she says.

Another necessity for dissolving gender imbalance in the capital arena is getting more woman involved in the pointy end of the money flow.

“There need to be more female voices controlling money,” says Ms Lay. “We need to get more women at the table controlling funds and capital allocation and providing a different perspective on the investment committee.

“That would really help,” she says.

Early stage investor Sydney Angels does a good job of smoothing out potential gender imbalance in sifting through pitch documents.

“They do a blind screening so all gender references are removed from the pitch presentations. That removes some of the unconscious bias that we have.

“In my own work, I have engaged in that (bias) and I haven’t noticed until after looking at the results.

“Doing gender neutral screening as you would do with resumes is a good approach.”

Innovationaus.com will host a Women in VC Forum on February 27. The forum brings together leading venture capitalists and entrepreneurs to examine the barriers to female talent in VC sector as well as the best strategies for fundraising, deal sourcing and portfolio management.

Do you know more? Contact James Riley via Email.

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