• Academia: A group of researchers have published their findings on VC decision-making, after being "invited to silently observe [Swedish] governmental VC decision-making meetings and, more important, the conversations they had about entrepreneurs applying for funding."
The purpose was to better understand investment decision-making, with the VCs hoping that the findings could help them improve their own processes. But the results were different than either side expected:
The language used to describe male and female entrepreneurs was radically different. And these differences have very real consequences for those seeking funding.
For example, unproven, young male founders were referred to as "promising," whereas unproven, young female founders were referred to as "inexperienced." Or "Cautious and sensible" vs. "too cautious."
In terms of results, female founders on average received 25% of their ask, compared to a 52% mark for the men. A majority of women (who comprised 21% of the sample) were denied funding altogether, while only 38% of men were turned down.
Yes, this is Sweden rather than Silicon Valley. But: (1) Women own around 1/3 of all businesses in Sweden, so its hardly a more chauvinistic market in this regard. (2) Government VCs actually are required to take "European equality criteria and multiple gender requirements" into account when making their decisions, which highlights just how deep these unconscious biases run. (3) Two of the seven VCs were women, which is a higher percentage than we'd see in most U.S. venture firms.
• Stepping back: Menlo Ventures yesterday announced the close of its fourteenth early-stage fund with $450 million in capital commitments, but without longtime partners Doug Carlisle (35-years with the firm), John Jarve (30 years) and Pravin Vazirani (16 years). A spokeswoman says that each will maintain current portfolio company board seats, but none will participate in new deals.
• I'm still confused: Treasury Sec. Mnuchin yesterday testified that the White House does not support legislation that would separate commercial banks from investment banks, despite its repeated invocations of a rule that did exactly that."We never said we were in favor of Glass-Steagall. We said we were in favor of a 21st-century Glass-Steagall. It couldn't be clearer."
• Coming attractions: Innovation Endeavors is in talks to expand its capital base beyond the bank account of Google executive chairman Eric Schmidt, according to multiple sources. No word yet on fundraising targets for the early-stage VC firm, which has been solely backed by Schmidt since its 2010 formation.
• Market theory: Famed short-seller Jim Chanos yesterday told Axios that he believes the markets are pricing in a President Pence: "I think they're beginning to factor it [Pence] in, that's for sure. The markets are hoping for Vice President Pence to become President... a more stable person being able to enact a Republican agenda."
• Recommended reading: Ryan Mac of Forbes has the bizarre story of 1-Page, a San Francisco-based HR software company that went public via a reverse merger in Australia, despite its CEO having neither a viable product nor an apparent clue about what it means to be a public company. And its shareholders don't come off much better. If you've had a rough week and want to feel smarter about yourself, this is for you.
• Have a great weekend. Go Celtics!