editione1.0.2
Updated February 11, 2023Claire Díaz-Ortiz (VC3 DAO, angel investor)
Maren Bannon (January Ventures)
Claire Díaz-Ortiz and Maren Bannon are true tech veterans. Both have been working in the technology sector—from high-caliber operator roles at Genentech and Twitter to recently becoming investors themselves—for the better part of the last two decades. We talked to them about their experience “growing up female” in the tech world during these years, about investing in diverse founders and the importance of opening doors, and about male VCs who say they want to widen their pipeline but don’t want to put in the work.
Interviewed November 2020
Erika Brodnock (EB): You have both worked in the tech ecosystem for more than 15 years in various roles as operators, founders, investors; you span the whole spectrum, which I have to say is inspirational. How has it been? What are your experiences as women? And how has the industry evolved over time?
Maren Bannon (MB): To contextualize my experience, I was an engineering major in university. I remember that feeling of sitting in class surrounded by men. Unfortunately, since then, I don’t think the numbers have gotten that much better when it comes to computer science (CS) and technical degrees. That feeling of being an outsider in the class because of my gender left an imprint. I remember my first CS class; it was all about coding video games. I thought: this is not for me, I’d never been interested in video games. CS just wasn’t taught in a way that showed you the diversity of things you could build. Instead, it felt like it was taught for a certain profile of a person, and so I came away from university with my engineering degree, but didn’t actually go work as an engineer.
I ended up spending the first half of my career in health tech. I worked at Genentech, which was actually very evenly split between men and women, probably 50/50; the head of the department that I worked in was a woman. I cold emailed her to get the job; she hired me. It was a very positive work environment with a great culture. I think that was a good thing, having my early career be in that environment. I remember there was one man in our department who sexually harassed somebody, and he got fired very swiftly. I think it was a very healthy culture. I feel fortunate that I had that early in my career, but that’s probably not the typical experience in tech.
In general, I don’t think the culture for women in tech more generally has changed that much, unfortunately, in the last 15 years. There’s a lot more talk now—and I think social media amplifies all of the talk about this topic—but I don’t know if the numbers and the environments and the feeling on the ground for female founders or female employees has really changed that much in 15 years.
Claire Díaz-Ortiz (CD): For me, it’s weird because I grew up in Silicon Valley, in Berkeley, and then went to Stanford, all during those hot years. So it’s strange that I didn’t feel I was a part of the tech scene until I was about 28. But looking back, we went to a party as freshmen at the Napster founder’s house. And you know, the guy who crashed on my kitchen floor with his girlfriend (on top of a blanket, no mattress) when I studied overseas in Italy is the chief product officer at Facebook. You know, it’s like all of that was happening there, but I wasn’t aware of it. Joe Lonsdale, who started Palantir, was in my 80-person freshman dorm; we called him “Muscle Man Joe.”
But in general, I was just not aware of the extent of the white tech privilege I was raised into. And I really wasn’t in tech in any real way until I sort of happened to stumble into it. I had some random career for the first five years out of college, living in random countries doing freelance stuff, and then ended up with a blog that became really successful. At the time, blogs were mostly held on blogger.com and the folks that created Twitter were the folks that had worked at Blogger. Twitter was spun out of a two-week side project. After they had made my blog popular, they invited me to join Twitter. They put us on the homepage and then wrote a blog post about us joining. My best friend and I were traveling around the world at the time. Then we had a non-profit in Kenya, and Maren came out and volunteered. That’s how Maren and I met 12 years ago, when Maren was in business school.
So I became basically an early Twitter influencer, because there was no one on the platform at the time, certainly not from Kenya and no one tweeting about “tech for good” stuff. This is how I ended up joining Twitter as an employee. My experience at Twitter was pretty positive, but very gendered. I showed up, I started as an intern at the very end of my MBA, and there were about 50 people there—and they were mostly men. At the time, there were two bathrooms, one for the women and one for the men. But it was really frustrating because the men always used the women’s bathroom. My first salary negotiation was like a complete joke. The person I was negotiating with had just told me how he had been grossly overpaid at his past job in tech, but the reason I should only earn $65K, after both an MBA and a Master’s degree from Stanford and Oxford, was because I should feel lucky working for Twitter because it was like a “golden ticket.” But then I was told I wouldn’t even get that deal at first, and first I had to start as a contractor for $20 an hour with no stock options. I remember trying to negotiate that with the (contractor) female recruiter out in the hallway, and she was like, “Uh, yeah, there’s no room to go up.” It’s wild to look back on.
I had a good experience with the company. But I began to see how a lot of the issues of discrimination, against women in particular, were oftentimes a matter of disorganization—or lack of organization, you could say—in terms of HR and legal systems put in place to protect employees at companies that grow really fast. For a long time at early explosive startups—in those days, at least—no one was thinking of how to best put in policies in place; it was just bros coding, and then the company exploding, and then everyone was off to the races. And in those days, we were way less aware of the negative consequences of our work—hence the entire premise of that Netflix documentary on social media.
Johannes Lenhard (JL): What is the most awkward, annoying story or experience that you’re willing to share?
In the early days of building my startup, I was pitching a very well-known male investor. He heard my pitch and said, “I like you. I’d love to invest in you, but I’m just not interested in your business [which was like a class pass for kids’ activities]. If your startup were for hedge funds or golf, I would invest.” It’s fine that he wasn’t interested in my business, but calling out that hedge funds and golf were more exciting to him than kids’ activities felt a little obnoxious.
CD: So I can talk about some more recent experiences of getting into VC. We know VC is bad for women, and I saw that from the beginning. I started angel investing while doing other stuff after leaving Twitter; it was really when I started thinking about a job in VC about two years ago that I came to understand many of the systematic issues at play. When I decided to enter VC, I took about a year to talk to most of the firms in Latin America, where I live. As an author of a bunch of books, I process things through writing. During that time, I took many months to write a long piece for TechCrunch that looked at a lot of the numbers in terms of female founders and VCs in Latin America. Some of these numbers no one had actually put together before in a digestible form. So the results are dire—in Latin America, only about 7% of VC check writers are women, so only 7% of investing partners are women.
There were two themes I saw again and again. First, senior level women are consistently on the operating side, not on the investing side of the VC firms. That is the classic way for a firm to say they have a woman in leadership. It is amazing to me how little understanding there is of this, even among the women. Recently, a woman was promoted to partner in one of the top funds here, but it was an operating partner. And everyone was congratulating her; obviously, it’s a wonderful accomplishment! Big congrats! But as I was talking about it with another female investing partner [there are less than 20 of us in LatAm], I realized that even she didn’t fully understand the difference between the two roles. And she’s a VC! Imagine what chance a female founder has of understanding that a woman on the operating side is not likely to help get her a check!
Secondly, when talking to funds, I kept hearing again and again: “half our team is women” when the women work in administration, or “the first people that review our deals are women.” Yeah, because they’re analysts. Junior, junior analysts! So the idea that women are there, when they don’t have power, and have these really junior roles, is a real issue that hides that problem.
There is a list of all the women investing in LatAm that someone put together. And there’s a question in the list that says: do you have decision making power? Everyone on that list checks “yes”! I want to empower young women investors, but it’s important also to understand what “check-writing ability” and “decision-making power” in a fund really mean!
I think that the number one thing is that when you get a woman investing partner, she really is two to three times more likely to invest in a female-founded team. That’s the big lever. We just need different types of investors with different backgrounds to spot outsized opportunities.
EB: Thank you so much for sharing these insights, both of you. I am really keen to hear what you think could be done differently.
MB: I definitely agree on the more female investors; I think 30–40% of the check-writing team needs to be female to have a better chance to invest in more female founders. I think being the only female partner is a hard position to be in. Funds can promote women at these funds into check-writing roles, or hire them into those roles. Another promising path is more female-led funds. We’re seeing more and more of that, because I think the path to work your way up at some of these big funds is a slog, especially for a woman, unfortunately.
The other thing is that you have to widen your pipeline, you’ve got to get out of your networks, you’ve got to stop relying on the warm intros. Recognizing the gaps in your pipeline is the first step; then design a process to remove the bias from it. It would be helpful to see more funds actually setting goals around this. If you’re a fund with outside LPs, you can’t necessarily set a quota, but you could set a goal. If you don’t set a goal, you’re never going to actually change. A lot of these initiatives don’t feel like they’re serious because there aren’t any metrics. It is just PR.
JL: You are now both in roles where you are investing at least part of your efforts giving money to women and diverse founders. What results are you seeing? Can you already share success stories?
CD: I think what is perhaps most interesting is just the concept of planting a flag with this kind of work; we are saying we want to invest in women or founders of color. That in itself is really, really important, particularly in emerging markets like LatAm. This ensures that founders will come to you and pitch their business knowing it’s a safe space, where we’re not gonna discuss “what it’s like to be a woman with a baby starting a fintech company,” and instead we’ll just freakin’ talk about your fintech company. The thing you see in emerging markets is that the first step in VC funding is always the easier step, which is investing in all the founders that have these stamps of approval: they grew up in Nairobi or Buenos Aires, yes, but then they went to GSB [Graduate School of Business] at Stanford and got into YC [Y Combinator]. In Latin America, we’re at least seeing moves towards the second step. I’m in a fund where we do a lot of investing in founders who aren’t on the typical road.
There’s an author and investor, Nathalie Molina, and I saw a quote she had about how great mentors don’t just guide you, they actually open new doors for you. And I think of that a lot in terms of investing in female founders and emerging markets. I think what a lot of these women need is to be more accessible, for them to reach people overseas.
Let me give you an example. Maren and I are in this intimate angel group of women VCs in different geographies I put together, who invest in female founders across borders. We call ourselves the Angel Collective, and it’s been a great way to co-invest with trusted investors through our funds or as angels. So there is this one founder from Uruguay, and she is awesome. But Uruguay is a small country that not everyone has heard of. She’s called Ximena; she doesn’t have perfect English, but I think she’s really strong. There’s another investor in our group from Hustle Fund, Elizabeth Yin. Elizabeth had done one deal at that point in Latin America, which had come out of 500 Startups (where she worked before). Again, you want the stamp of approval.
When our fund decided to invest in Ximena’s company, Prometeo, basically a Plaid for LatAm, I thought this deal was an Elizabeth kind of deal. They already had a lot of revenue. It was really interesting to me, the founder’s experience when she talked to Elizabeth’s partner, Shiyan. Ximena was very nervous about the call; this was her first US investor. But they ended up really hitting it off and Hustle Fund invested. And that same founder, I sent her to one of the best funds on Sandhill Road [in Silicon Valley] and told them they needed to talk to her. Their feedback? There was “cultural dissonance.”
EB: We talked about goal setting for funds and the issue with quotas. What other practical advice would you give VCs to do better when it comes to investing in diverse founders?
CD: I see the pipeline issue as a real issue, but not in the way people think. For example, there was this VC who tweeted recently about how only a very small percentage of the people applying to him are women and that he would like to increase this number. It’s a good thing to say that on Twitter, but it’s also a stupid thing. You’re the one that should go out and find them! You go get that pipeline—it’s waiting for you!
MB: I find those comments irritating because they feel lazy. You could go out and hire diverse people on your team; there are all these different organizations and schools and events where you can meet people to change your pipeline. But it takes work. It’s complacent to say, “This is our pipeline, we did our best, and we’re just not seeing these founders. There’s a lot you can do if you actually want to take action; find a bunch of female scouts, for instance.