Why Your Title Doesn't Mean You Have Power in VC

[00:00:00] We discovered two big pieces of data that are important. Number one is just because you have the title does not mean that you have power and influence. And so as the title of partner has less and less often meant that you're a true decision maker inside of the firm, we started asking ourselves, how do we know people have power and influence? That's one piece of it.

[00:00:19] The second piece, though, is that there is now a narrative around the kinds of work that we're doing that says DEI is dangerous or risky or expensive or doesn't get returns. And our job is to highlight the data that actually says when you have diverse decision makers, it's good for business.

[00:00:40] This is Inspiring Women, and I'm Laurie McGraw, and I am speaking with Paige Hendricks-Buckner, and she is the CEO of All Raise. And this is important because she is trying to solve the problem where women are receiving not just pennies on the dollar, but a pittance on the dollar of venture capital. She's doing this by bringing more women, more people, non-binary, into leadership in the world of venture.

[00:01:08] Paige, I'm so excited to talk to you. Thank you for being on Inspiring Women. I am so honored to be here. Big fan, Laurie. So thanks for having me today. All right, let's dive in. Paige, let's start with the state of play. So venture, we've been all trying to move the needle here in terms of the trillions and billions of dollars that are spent on all kinds of innovative companies that are out there.

[00:01:30] And women-led companies, women founders receive just a fraction, an abysmal fraction. The needle has not moved. We've tried to increase board membership. We've tried to increase more female founders. What are you trying to do to move the needle? Well, first and foremost, I'm thrilled to have this conversation because it's important to acknowledge both the progress and then also how far we have to go.

[00:01:57] So I want to start with what All Raise is focused on right now, and then I want to come back to the stat around female founders. So All Raise was started to help investors, founders, and operators, specifically women and non-binary folks, be very successful in their roles. And there were two big metrics we were looking at. One was doubling the percentage of funding going to women and non-binary founders at the earliest stages. And the second was to double the percentage of women and non-binary VCs in partner plus seats or decision-making seats.

[00:02:25] In 2024, we decided to narrow our focus specifically to women and non-binary venture capitalists because, one, that was our strongest network. So we thought there was a huge opportunity for us to double down on making impact. And the second was because we know that if you can change who's writing checks, you can change who's getting checks. And so that's why we decided to focus.

[00:02:46] And with all of that said, last year, I'm excited to report that we, in concert with so many people in the ecosystem, officially hit that milestone of doubling the number of women and non-binary VCs in partner plus roles. But we discovered two big pieces of data that are important. Number one is just because you have the title does not mean that you have power and influence.

[00:03:06] And so as the title of partner has less and less often meant that you're a true decision-maker inside of the firm, we started asking ourselves, how do we know people have power and influence? That's one piece of it. The second piece, though, is that there is now a narrative around the kinds of work that we're doing that says DEI is dangerous or risky or expensive or doesn't get returns.

[00:03:30] And our job is to highlight the data that actually says when you have diverse decision-makers, it's good for business. And so, for example, we know that VC firms with at least 10% more women partners see 1.5% higher returns and 9.7% more profitable exits. And we also know that gender-diverse companies are 25% more likely to outperform their peers. So that's a little bit of what we've been focusing on by a little bit, as you can tell, quite a bit.

[00:03:56] But the reason why this is important is because if we want to see more innovation in the world that solves for women and non-binary folks, and by the way, therefore, for everyone, we need to be at the table making decisions, writing checks, hiring and wiring, as we like to say. So those data points are so important. And we can't say them enough because we know that women-led companies, they are going to make better decisions. They are less risk-averse. They're capital-efficient.

[00:04:24] They are all the things that should naturally mean that they are investable. And yet the data also shows that the questions that women-founded companies, you know, they're asked in a VC kind of cycle, they're more around the risks, the negatives, as opposed to the opportunity and where the companies can go.

[00:04:45] So it's interesting that you commented on not just the title, you know, in terms of where the power is and where the decisions are made or where the power is. So how do you advise? How does All Raise push to make sure that women are in those places of power and so that we can make better decisions about companies that have tremendous opportunity? Yeah. Yeah.

[00:05:11] So I want to first talk about a couple of examples that I've heard of people being in that decision-making seat and leading to opportunity for a firm. And so I won't name this person because I haven't asked for permission, but I'll share that there is a woman who is a managing partner at a firm who explained to her partners when she came in that there was a huge opportunity in the fertility space. And neither of them had had personal experience with this as they were both men and their partners had not had that experience.

[00:05:37] And so they were able from a personal experience and also their whole network able to educate their firm and make some really exciting investments as a result. So I think the way that I want to make sure that folks are thinking about it is we are adding value to firms by adding that perspective, but then also the network as a result. Because it's one thing to know it, it's another to have the deal flow. And in this case, this investor is a member of our community had both.

[00:06:04] I think the second piece of it, though, as we come back to women founders and the opportunity there and not talking about the risk, is that we need more stories about their success. And so I think about, for example, Maven Clinic and what Kate Ryder and team have done over there, right?

[00:06:19] So you see the women who are on that cap table, by the way, the women on their team, but also the stories and the way that they're positioning themselves as experts in the ecosystem and telling the story about their growing valuation, about the importance of the different kinds of markets that they serve and the opportunity. I think it's both a combination of having somebody in the firm to see it, but then also for firms where you don't have a woman at the decision-making table because they're really small and they're not bringing in more people or because they just haven't hired that person.

[00:06:49] You also need those stories out in the ecosystem and top publications so people see, oh my gosh, there's a huge opportunity here. We're going to miss out if we aren't making these kind of investments in companies like Maven Health. So I think it's a combination of the right eyes in the firm, but also stories that people can pattern match against.

[00:07:08] When she was on Inspiring Women, she said some things that I really took to heart in terms of what others can learn from when she talked about the people that she was speaking to on the other side of the funder table. And she knew quickly who was really listening to her and understanding what her value thesis was and who was not. And so she didn't spend a lot of time.

[00:07:33] Most, many founders don't know that lesson and many female founders don't know that lesson. And so that to me was extremely great advice for other women leaders. So when you're working on the other side of the table and teaching venture firms on why it's so important to not miss out on, you know, opportunities like Maven, how are you convincing them? It seems like the data alone is not enough.

[00:08:03] So what's great is that there are so many leading firms that don't need convincing because they have people internally who are able to demonstrate. They're great examples of why you need to invest in women on your team. So I'm thinking of Holly Maloney at General Catalyst as a great example. We were just talking about Holly earlier, right? She has incredible experience. Everybody that I've spoken to works with her and says she's a great board member. She's a savvy investor. She adds so much value.

[00:08:30] And I know that General Catalyst is grateful to have her in the room. And I know that every portfolio company that she invests in is excited to have her on their cap table. And so there are firms that are already doing this right now. And they're seeing the value already. And they're promoting those people. They're helping them get speaking engagements to show off their credibility, which I think is really exciting.

[00:08:50] I think also in firms that are doing it really well, we are trying to highlight those firms more because I think people lead or people are following who's doing it and want to mimic firms that are both doing well and have great talent at their firms. And so another person I'm thinking about is Jess Lee at Sequoia Capital, right? She is a founder who came into Sequoia. She's doing some great work on products there as well.

[00:09:13] But when you look at Jess Lee and the kind of company she's invested in, again, another Maven Clinic investor, she is somebody that we want to pattern match against. And that's a great firm. Sequoia is a great big firm that people aspire to be like. So I guess what I would say is Allraise's job is to elevate the stories of people who are doing this very well and explain that in firms that get it and are making savvy investments,

[00:09:37] they have really great women inside their firms, non-binary folks inside their firms who are knocking it out of the park. And so we want to continue to elevate those stories. The other example I want to give you or a couple of things that I want to talk to you about is in these firms that are doing it well, they have clear sponsorship opportunities, which means that they have someone who is sponsoring the junior talent who is coming up and helping them learn the politics of the firm internally, but then also helping them understand how to be a great VC or how to be a great board member.

[00:10:07] And I'll give an example of a pair that I won't share out loud, but it's been so cool because I've heard them both talk about each other. But the person who sponsored this incredible woman investor made sure that that pipeline was full of diverse talent, so they brought the right person in. And then when they were hired, has taken them under their wing to make sure that not only are they understanding how to participate in the firm politics, get their deals done, get them across the line at the investment committee meetings, but then also that they're getting credibility externally. And it's got to be both.

[00:10:37] Yep. Because if you're helping someone internally, but you're not actually talking about them externally, doesn't help them build credibility in the ecosystem, which is how you win deals and how you are able to demonstrate that I'm an investor that founders want to work with. Right. So, Paige, if the firms don't really need convincing, okay, because they believe the data,

[00:10:59] and you've done a great job at All Raise, and you've doubled the volume of the power brokers who are in the funding seats to make them more diverse, but we're still a long way away from the vision of what is truly sort of, you know, the environment we want to be in. So what's blocking progress? Let's talk about the headwinds that are there. And there are, I would say, some new headwinds in terms of cultures out there.

[00:11:27] We're in the most exciting time of innovation with AI and all of that. That's definitely a bro culture out there. So what are you thinking about? What are the obstacles that you're facing? And what can we do about them? Absolutely. So the first that I would love to talk about with you is the gap between people's title and their actual power and influence. And I actually think this is one of the first reasons why women are not getting access to capital.

[00:11:57] Non-binary folks are not getting access to capital on the founder side of the table. So we may have grown the number of people who are here, but when we started digging in and trying to figure out, well, why is there still this gap? What we learned is that only 1.6% of AUM is managed by women and people of color in the United States. So even if I can write checks, how much capital can I really command, whether it's because of the size of my firm or it's because of where I am in my career journey?

[00:12:23] Number two is that while we have over 18% of people in partner roles, we knew last year that only 12.6% of deals in the industry are led by women. So then the question is, who's leading the deal? Then who gets attribution for that deal? And by the way, is it a hot deal? Is it a deal that everybody is super hyped about? And then last but not least, that 11.2% of board seats are held by women once a venture firm makes an investment. So the question we're asking ourselves again there is, what are the quality of those board seats?

[00:12:53] And how are people using that to build their track record? These indicators and a few others to ask, how can we help our community members grow their power and influence? Because they can actually write a check. They can write a big check, especially in the world that we are in now with huge valuations and AI taking up so much space in the market. You need to be able to command a big check for some of these big hot companies. How do we help them grow that? The second piece that I want to flag too is just where people are in the market right now.

[00:13:22] And one is the exciting change in women running their own firms. And so we're currently tracking 325 women who have founded their own firms and are raising funds one through three. And we're defining those as emerging firms. And so, you know, they might raise a $10 million fund or they might raise a billion dollar fund. But we're following where they're investing at the early stage of the growth, which sectors are they investing in?

[00:13:49] And what's also interesting, though, is when you look at the number of people who are in principal-plus roles at firms with a billion-plus in AUM, there are about 328 women in those roles. So if you think about that, there are 325 women running their own firms, 328 women at these big firms. And the question is, how can we help them both be successful? Because while, on average, these women over here who are running their own firms may have less AUM to command, they're still making really exciting bets and they have control in their firms.

[00:14:18] They have ownership in a management company. They get to make decisions about who to hire and who to wire to. And then over here, we have these people who maybe can write larger checks on average. They have the ability to get promoted inside of these big firms and they can share deal flow across the network. So I think part of our job to be done here is to weave those two together so we can help these firms build their track record and get DPI, because that's important at the end of the day, and then also help these people grow their track record over time so that they can build credibility and get promoted.

[00:14:46] So I think if you consider where the gaps are right now in power and influence, I think that has a huge impact on what we're seeing get invested in. And so we need to continue to play both sides of the board. Where's the pipeline? Where's the pipeline of these women leaders? So if there are 600 to 700 women either, you know, in the powers of influence and power and position, as well as starting their own funding firms, you know, where's the pipeline for these people?

[00:15:15] I think the, I would imagine the pipeline for starting your own firm is a lot less than just growing within a firm. That's a great question. So in our annual report, which we'll publish next month, we actually talk about three groups. First, about roughly 40% came from operating roles at startups and tech companies. These are founders, CEOs, and executives who have built companies before they've actually built funds. Interesting. The second group, I know, I know, very interesting. And a really exciting profile, right?

[00:15:44] Because they know what it takes to build companies. I've talked to several of these people now who are able to capture some really exciting deal flow because they know the founders. They know the people in these companies who maybe are raising that next round and they can invest. They also bring a lot of great expertise into venture firms, which brings great value into the firms as well. A second group, about 12% came from VC roles outside of top tier legacy platforms.

[00:16:10] And so what's exciting about that is that they're bringing their expertise from all kinds of VC firms across the industry. And we want to see that, right? Even if you're not at a huge platform, you still bring lots of value. And then a third of the group, or the third group rather, the smallest at about 6.6% came directly from top tier legacy VC platforms before they went out to start their own. We're calling those spin outs.

[00:16:34] And I'm telling you, I'm hearing more and more about people who want to spin out and leave a big firm to go start their own. And I think it's a really exciting time to do that. It's both hard to fundraise because the LP environment is tough. And we know that many funds that raise fund one will not raise fund two across the board. However, it's also a really exciting time because there's so much innovation happening. If you're going to bet on yourself, I think now is a time to bet on yourself.

[00:17:00] So those are indicators that sound very positive and that like, you know, naturally we would get to a place of parity sometime in the near future. But that also seems incredibly unlikely. So what are the headwinds? What are the headwinds that are in the way for women to assume these positions, to take the big risk on starting fund one? That's a big risky venture, a powerful move if you make it. And so what is stopping that from happening?

[00:17:30] And what can All Raise do about that? Well, I think it's incredibly hard to fundraise right now as a fund manager full stop. So one of our jobs to be done is to help our community members connect with LPs. And we've actually been testing a couple of different offerings to make sure that we're able to do that for fund managers in our community who are trying to raise right now. So every year we have an invite-only VC summit where we bring LPs who are aligned with the fund managers who are raising and help connect in person.

[00:17:57] So they have an opportunity to build a relationship before they need to transact. We've also been hosting small events where we connect those LPs and GPs with each other. So again, they can build relationships over time. And what's exciting is we're starting to hear from people who are actually converting. So LPs are writing checks as a result of meeting people through All Raise experiences. I think the second piece of it is that the DEI backlash is real.

[00:18:21] And there were firms who were more committed to helping both recruit and then retain women and non-binary folks. And that is just not the case. And so if they're doing it internally, there are some firms who have changed their language. There are some people who are not doing it anymore at all. And we've definitely seen women and non-binary folks shift out of those spaces and those funds because it's not a good fit for them. I think the other piece right now, and I don't know if I would describe this as a headwind, but I've been doing a lot of one-on-one interviews.

[00:18:52] It's just that VC firms, their thesis is changing. The firms themselves are changing. So especially for people who are spinning out, maybe the firm has changed what it looks like. So it's not traditional venture anymore. And people want to go earlier and they want to start their own fund and they want to get back in the game. So it's not necessarily a headwind, but it is a shift in the industry.

[00:19:13] And so firms that are now incredibly large, right, and have lots of different functions that they've added on for VCs who have built a career and credibility, they're ready to, again, make a bet on themselves. So we know it's, again, like not a headwind, but it is a reality that these firms are different in the last five years. So the last piece I would say, too, for folks who are thinking about starting their own fund right now, is just having a really competitive thesis. There's so many people in the market.

[00:19:43] And every year I've heard so many funds are not going to raise that next fund because there's so little LP capital. But then also it's not enough to say that you invest in AI, like how and why and why you and why now. And so just like a startup, you need to really have a very clear competitive advantage. So for the reality that there are headwinds in DEI, you're right. It's not, you know, people are not using that term anymore.

[00:20:09] Two years ago, there wasn't an Inspiring Woman podcast that I did that didn't have the word ally in it. You know, if you go back and now those are just things we don't talk about anymore. So I look to women to sort of like take it upon ourselves to, you know, make the advancement to do this. I've had a number of Inspiring Women conversations of late about women investing, personally investing.

[00:20:37] And that's an area that there's not enough being done. So I'm wondering, like, where are the target opportunities? I do think women learning how to, you know, be investors, take control of that. I've had a number of interesting conversations about the great wealth transfer and believing that that is a potential future opportunity for women. What are you looking to to just, despite headwinds, solve for some of these problems?

[00:21:04] Will the trends help us or do we, you know, is there more that individuals can do, other leaders can do? Well, I'm excited that you're talking about the wealth transfer to women because I think it's a really interesting opportunity right now. And I'll share with you one trend that I'm hearing increasingly are women who are stepping into running their family office who want to invest in more women, whether it's on the angel side or if they want to invest in funds. And so, in fact, this is a perfect example.

[00:21:34] I had a conversation yesterday with a woman who had sold her business and had been doing direct investments into companies, but also realized there was an opportunity to invest in funds because another woman who was running her family office, and you should dig into this and check it out. So she started doing it, and now she's interested in coming and joining us at our summit so that she can meet incredible fund managers to invest in. I have heard that story at least 10 times in this last probably two months

[00:21:59] because there are so many women who are stepping into their wealth and understanding that there's so much power there on the fund side. This woman also shared with me yesterday that when she sold her company and she and her husband were having a conversation with their wealth manager, this never came up. And she's deeply passionate about investing in women's health, and she was like, I wasn't shown any of those companies that were led by women. I was not shown the opportunity to invest in funds.

[00:22:26] And I think we need to help people understand that there's an opportunity here so that they will ask those questions. Because she's like, how else would I know if my friend didn't tell me about this opportunity? And so that is also not the first time that I've heard that, that women are looking for wealth managers who understand the opportunity to invest in markets that serve women, non-binary folks that I've talked to who are really passionate about serving communities that traditionally have not been served, or like, I have money now and I want to deploy that capital.

[00:22:54] So I think for individuals out there, angel investing has been such an exciting, and I've loved seeing this, especially when I was the founder, the rise of women and people of color and queer people as angel investors. But I think we should really think about the opportunity to become LPs as well, because there are so many women and non-binary fund managers who are professionals. And you can invest in that professional and their portfolio companies. You can still meet those companies. You can still add value and be helpful.

[00:23:23] But you can really bet on people who, like, this is their job. Yeah. This is what they're experts at. And so many women, you know, reach that point, you know, where they have funds to put into things. And so much of it goes to just philanthropic things, which is fantastic, which is fantastic. But the creation of additional sort of like capital and means is also equally fantastic. So it's a huge opportunity. I'm really excited about it, right?

[00:23:53] And fund managers are investing in such cool companies right now. Yeah. So, yes. Look at being an LP. Yes. Do it. Okay. So, Paige, as we close out on this Inspiring Women conversation, you're doing so much. I know. I know. I know. So much important work at All Raise. And thank you for doing it. And thank you for raising the, you know, the lens on this area.

[00:24:22] So the next five years, what can we look forward to? I am so excited about the next five years. So at All Raise, we are focused on helping All Raisers grow their power and influence so that they can get returns, right? We want to help them do their job better. And we do that through three key pillars. One is community. So we have a relational transactional community. We have our annual summit. We have our cohort experiences. And we have small curated dinners that we run. Number two is data.

[00:24:50] We want to be the experts in data and the ecosystem. So we have a market map of all of the women and non-binary folks who run venture funds. And we're tracking them. But we also are tracking people at firms with a billion plus in AUM to make sure that we understand what they're investing in, what they need, how we can support them. And eventually, stories of performance so that we can then highlight that through our last pillar, which is lore, L-O-R-E, for those people who aren't geeked out about the term lore.

[00:25:16] And the way that we think about that is that we want to be able to tell stories that showcase new patterns that you should pattern match against. And also some patterns have been around for a minute. So you can see the opportunities in venture that look just as diverse as we know venture is and can be. And so for us, that means learning from you, Laurie. We're launching our very first podcast this year where we're going to be talking to leaders in venture capital, men, women, non-binary folks who are shaping the future and have shaped venture thus far.

[00:25:45] And we want to produce more of that kind of content so we can showcase examples that people should be looking to when they think of successful venture capitalists and venture-backed founders. I would say overall for All Raise, what I hope in the next five years is that All Raiseers can look back and say, All Raise helped me get DPI. AllRays helped me raise my next fund. AllRays helped me build my credibility. And I wouldn't be here without AllRays. That's how I think about our work every single day.

[00:26:12] So I want to be a top cheerleader of everyone who's out there. And I want to make sure that we can measure our success so that people can see the value that AllRays brings because we've brought so much value and I think we have even more to bring. The beginning of something incredibly important and most certainly valuable. And so this has been an incredible, inspiring women conversation. I've been speaking with Paige Hendricks, Buckner, and Paige. Thank you so, so much. Thanks for having me, Lori. It's an honor to be here.

[00:26:42] Thank you.