Correction: An earlier version of this commentary cited an incorrect date for a conversation at a meeting of investors in Care.com. The conversation took place in 2013, not 2006. The following version has been updated.
Amanda Bennett is a freelance editor and writer.
So this week, we saw a woman who reportedly earned a base salary of more than $200,000, a bonus of maybe half that again plus a share of her deals’ profits sue her former firm because she wasn’t made partner — a promotion that would have earned her way more. She’s seeking as much as $16 million in compensation for gender discrimination. In other words, a probable millionaire is suing some billionaires and would-be billionaires over not being able to become a multimillionaire. Got it?
Boo-hoo, you might think. Here I am trying to figure out how to cover the co-pay for my kid’s braces. Why should I care about some rich brat or whether a Silicon Valley venture capital firm has one female partner, 500 or none?
You should care. As far away as such megabucks travails may seem, the issues being aired in Ellen Pao’s lawsuit against Kleiner Perkins Caufield & Byers have an impact of all of us — and on women in particular.
First, think about what venture capital is. When you are big, established and safe, there’s lots of money — bank loans, bonds, commercial paper — to keep your business running and growing. But what if you’re a start-up with a promising idea but no track record? Venture capital bridges the gap.
Pao was a junior partner at Kleiner Perkins, which is the rock star of the breed, its investments having helped launch the likes of Amazon, Google and Twitter. She claims she wasn’t promoted because she is a woman.
As her suit is far from the first to highlight, Silicon Valley itself is one of the last really hard-core bastions of sexism and exclusion, with women subjected to a level of harassment and casual dismissal that harks back to a much older, darker era. Yet within that culture lurks the perhaps a bit more genteel, but just as isolated, world of money. Of the 92 venture capital firms looked at by Fortune Magazine, only 17 had even one senior female leader.
Make no mistake: Venture capital is a world where who you know counts. It’s a world that one venture capital expert called “a tight and trusted circle of business colleagues who act as gatekeepers for high-potential deals.” If women are locked out of decision-making, they’re locked out of the money. Women are majority owners of more than a third of all businesses in the United States, employing 16 percent of all Americans. Yet only 2.7 percent of the companies getting venture funding in recent years had a female chief executive. That means that these businesses are, in important ways, being starved of the means to grow and thrive.
And guess what? For all you women who see dropping out of the corporate rat race and starting your own business as a way around the barriers you face at work, this means that you can’t hide. If you want to be super-successful, sooner or later you’re going to come up against the venture capitalists.
Don’t get me wrong. It’s not that I think adding women to the top of these firms is going to make them nicer, softer or friendlier. The business of investing in start-ups is a cutthroat one, ruthlessly measured by results. Gender parity extends to the ability to be a jerk.
No, I think the advantage lies in breaking down the “people like me” thing. It might, for one thing, bring in creative new thinking to solve problems, the way it’s done in the world of philanthropy. It might help reduce some of the bozo thinking we see when men aim products at women. When Dell produced a laptop for women, it came in pink. It was called Della (get it?) and it could be used, its makers said, for finding recipes, weight-loss information and cooking tips. By the way — this was in 2009. Six years ago. Seriously.
It might also result in products that serve entirely different needs. Men saw the power of making access to transportation easy, frictionless and convenient. Good for them. I use Uber several times a week.
But would a man have seen what Sheila Marcelo saw: the need for a way to connect caregivers with those who need child, elder and pet care? As Bloomberg’s Lisa Kassenaar reports, a man asked Marcelo at a 2013 investor meeting who would possibly be a repeat buyer of household help? The only female investor in the room spoke up, says Kassenaar: She had already used Care.com eight times.
To get influence, we have to get over our basic ambivalence and distaste for women with money and power. We fret and plot and discuss and research about women getting to the top. Then when they do, we crucify them. (“I can’t respect Sheryl Sandberg,” one woman told me at a recent party. “She’s rich and privileged.”)
So watch Ellen Pao. Whatever you think of her or her case, watch her as a sign of women increasingly asking for their place in the world of money.
It’s not for nothing that, in my long career in investigative journalism, one of our favorite mottoes was “follow the money.” You find the money, you find the power.