Through Diane yoo
When it comes to approaching a career as a venture capitalist, several factors work against me: I am young, a woman and a minority.
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I knew from the start that my ascent to the top would be rocky, dotted with roadblocks. I also knew that I would be sidelined or downright ignored as I tried to achieve success. A very small number of venture capital managers are women, and an even smaller number are Asian women. I wasn’t working assuming my trip would go smoothly. However, I knew I had as much to offer the VC world as I did to anyone else.
There is still a large chasm when it comes to opportunities for minority women in finance. Recognizing this disparity is the “first step” in bridging the gap, and then making a concerted effort towards diversity initiatives is the “second step”. The changes will not happen overnight. Instead, the path to real, permanent change is a constant effort.
Watch out for the gap
Seeing where the gaps exist and recognizing them is a crucial part of solving the problem. Several factors contribute to the existing gender and minority gap in the financial sector. These include:
- There is a major disparity between women and minority business owners in obtaining venture capital financing. At the start of 2021, companies with female founders had raised just 2.2% of all venture capital funds. This is a lower share than the previous five calendar years. It can be a losing situation when venture capitalists want to support teams that âlook like themâ. Meanwhile, all-female or female-led teams are looking for venture capitalists who âlook like themâ and are strapped for resources.
- Studies show that although women and men enter finance in almost equal numbers, men tend to reach the top faster. The silver lining is that more women and minorities are joining venture capital firms and private equity firms, but key roles remain elusive for women and minorities.
- Men grow up and enter the financial industry with the many men like them who came before them. They have lots of models. Women and minorities, however, must seek their role models among the few to reach the top despite unequal circumstances.
- Enrollment in business schools and financial diplomas is always unfavorable to men.
- Businesses can discuss diversity, especially following significant civil rights events such as the #MeToo movement or the death of George Floyd. But very often the conversation does not turn into action.
A change will happen
All is not lost. There are still ways to encourage women and minorities to seek finance positions, seek senior positions, and be role models for the next generation.
- Encourage young women and minorities to consider jobs in the financial sector through initiatives such as Girls who investâEncouraging minorities to access these positions and implementing hiring policies that will enable women and minorities to access high-level managerial positions.
- Make the voices of women and minorities already heard in the most senior positions in their company. Let people hear their stories and see what their path involved.
- Businesses and businesses need to recognize that diversity benefits everyone, from customers to senior executives.
Changing the financial world to accept women and minority leaders will not be an overnight solution. The first step, recognizing the problem, has already been taken. People are talking about diversity more than ever. Real magic comes when talk becomes action.
Drawing: Dom guzman
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