About Astia

Friday, February 11, 2011

Sharon Vosmek Interviews with www.EcoSalon.com

Sharon Vosmek is being interviewed for an www.ecosalon.com piece. Here are the questions she has addressed, we thought you might be interested in hearing what she had to say.

Are VCs focused enough on supporting women and minority entrepreneurs?

I don't see this as the work of VCs. Their job is to make investments that return the best IRR to their LPs. And what we know about this is that companies that have women in executive leadership, outperform those that do not. Therefore, what we expect to see is a greater number and percentage of investments going in to companies with women in those roles. Not because they need support, but because they outperform the market.

Should they be focused on groups, as such? Why delineate between the bearers of good ideas?

I think the first answer addresses this.

Is there biased against efforts spearheaded by women and/or minorities? Why?

No 1. In our society, men and women are still by-and-large in separate business networks. And no. 2, 95% of VCs and 85% of Angels are men. How this plays out is as follows. VC and Angel investment relies heavily on trusted business relationships - often for early stage investors, the only risk that can be mitigated is that of the individuals involved and if they are known to the investor. Trusted business relationships are always going to win in this scenario. Therefore if you take points 1 and 2, you can see how within the high-growth space, groups who are not naturally in each others' networks, will suffer as a result. Entrepreneurs will suffer because they will lack access to capital. Investors will suffer because they will lack access to the full compliment of deals. This is a societal issue, not one of VC or Angel per se.

Are women and minorities even stepping to plate to play as entrepreneurs anyway? If not, why not?

Yes they are.

What are the benefits of targeting investments in these groups? To society? To theeconomy? To investors?

The benefits are three fold as the question presumes. For investors - higher returns where women are in leadership with men. For society - half the population's talents can be fully realized (women are half of MBAs, half of PhDs, more than half of all college graduates - there is an abundant pool of talent at the ready). For the economy - it means jobs. If women had the same access to capital as their male counterparts we would see 6 million jobs added to the economy in 5 years, 2million in year one alone*. This is the economic recovery we all seek. Seems a simple solution.

*source: Babson College

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