editione1.0.2
Updated February 11, 2023Theresia Gouw (Acrew Capital, formerly Accel)
Sonja Perkins (Project Glimmer, Broadway Angels)
Nancy Pfund (DBL Partners)
In early 2021, we met three of the most successful, seasoned, and well-known female American venture capital investors to discuss how they forged careers in the venture world over the last three decades. Theresia Gouw was a managing partner at Accel for 15 years and has since run her own firm, Acrew Capital; Sonja Perkins started investing 30 years ago and is the founder of the famous female angel collective Broadway Angels; Nancy Pfund is the founder of DBL Partners, a firm she has led for the last 13 years. All three of them were very happy to share anecdotes—some of them of annoying experiences, some outright offensive—and their biggest learnings.
Interviewed January 2021
Erika Brodnock (EB): Each of you spent the last 30 years in VC and tech, and I am keen to understand how it has been for you as women in a historically male industry.
Nancy Pfund (NP): I was always the token humanities and social science person in the room; I took a different path. I did not know what a venture capitalist was when I was in college—it was not something I dreamed of being and I just evolved to a place where it was what I wanted to do. Bob Noyce, one of the founders of Intel, whom I worked for, needed people that could reach out to broader constituencies in terms of the role and significance of electronics. That is one of the first jobs in tech I had; I started early and there were no women anywhere.
I did depend on the men that were my bosses or leaders of organizations that saw the need for a different point of view and a different talent set. Clearly, I was not an engineer, and while I felt very comfortable understanding science and engineering, I did not come from that culture. That was liberating, because it allowed me to focus on what I was interested in. But if I had not had the support of people like Bob Noyce; Bill Hambrecht, the founder of Hambrecht & Quist; or Dan Case, the eventual CEO of Hambrecht & Quist, I would not be here today.
Every career, of course, has its highs and lows, but I did really push the specific angle that I brought to bear, which was, how does technology affect society? How do you turn that into a force for good? It has always underpinned my perspective on the industry. I was lucky to find folks who also thought that was important, long before it became popular. The message is that, in the early days, it took a lot of very senior, well-rounded renaissance men to allow someone like me to flourish.
Theresia Gouw (TG): I have an interesting contrast to Nancy. I did take an engineering undergraduate degree, at a time when we were about 10% female at the undergraduate level. No one in my family is from the business world. They are all in medicine, because that was what you did when you were a first-generation immigrant from Asia, at least in my family. That was the path that was expected of you. That was not in the cards for me, but engineering was acceptable to my parents for a college degree, and it was great, because it turns out I love technology.
During my studies, I had some summer internships in traditional industries. I did my first summer internship at a research facility for one of the General Motors parts manufacturing businesses. There were a thousand full-time engineers there, two of whom were women.
While I love technology, I saw that what I wanted was to be the product manager or the business manager for a technology company. [The people who had these jobs I wanted all seemed to have gone to business school, so I decided to get a job after graduating that would help me get into business school.] I went into consulting, which was about 25% female. I was fortunate enough to get into business school, and that brought me to Silicon Valley and out to Stanford. That was where my eyes opened up to the world of startups.
I have always tried to focus on the positive aspects of being different and being the only person who looks like me in the room. Especially early in your venture career, when you are expected to go to these big tech conferences, and to try to meet interesting entrepreneurs and find new companies. I split my time between security and infrastructure, as Sonja does, as well as the more consumer-oriented things that all three of us do.
I went to this technical security conference and I realized very quickly that if they are meeting 25 or 50 VCs a day, it is likely that I am the only one who looks like me. If I can ask a smart question or make an insightful comment about their product or company, and then later when I email them and say, “Hey, I met you at so and so conference,” my first name happens to be very clearly female, then the chances that they will remember me is much higher compared to somebody who is emailing them with the first name Jim or John.
At my firm, I worked with more people named Jim or Peter than I worked with females. Early on, I said, “This is going to be something that you can choose to focus on the challenges, or instead choose to focus on your unique potential advantage in being somebody who will be easier to reconnect with, or easier to remember in a meeting or in a larger context.”
Sonja Hoel Perkins (SHP): I would say that my experience in venture has been a great one. I also fell into it, like Theresia. I do not have the typical venture capital background. The only operating experience I have is from Symantec (now NortonLifeLock) while also studying at Harvard Business School. I was first hired as an investment analyst at TA Associates in the late 1980s. I was the only woman based in Boston, although there was a female partner, Jacqui Morby, who is famous in the industry. She lived in Pittsburgh.
I was really good at sales because I had to be. I would look for companies that were growing really fast. While at TA, I ended up investing in three companies and all of them went public—all before I was 24 years old. One of them was McAfee Associates. McAfee had just agreed to sell to Symantec for $20 million. I convinced John McAfee, the founder, to sell part of the company and let the rest ride. Today, McAfee is worth over $10 billion.
As a woman in VC, some of my strengths include kindness, compassion, fairness, and just being nice. I like it when everyone wins. People remember me, which has given me a great platform to invest in some amazing companies. I am willing to take risks on people who do not fit the mold. Not all of my entrepreneurs are from “central casting,” where they have an MBA, an engineering degree, or experience as a CEO. I love backing the scrappy guy who has a great product who everyone else turned down.
My favorite companies are the ones who do well despite themselves. Having huge growth with an unpolished management team shows me there is a real market. Maybe this comes from being in VC since the 1980s. All entrepreneurs were scrappy then. The founders of F5 and Priority Call Management both had a hard time raising VC, but built multi-billion-dollar companies.
Maybe because I am a woman, I have a different perspective. All the women I know in VC are great at winning deals. It is important to identify markets and to find the best companies in those markets, but the most important thing is to win the deal.
Johannes Lenhard (JL): The industry has come quite a long way, but we would love to hear whether being a woman has been challenging. Is there any anecdote or situation you want to share?
SHP: The problem with being women in our industry is that there are so few of us. If there are any women at all, there is usually just one per firm. Nancy and Theresia’s current firms are the exceptions. Theresia and I were the only women in our original Silicon Valley firms (Accel and Menlo Ventures). We did not have networks that truly helped us with our careers.
We would occasionally go have a drink or go out to dinner with each other, but we did not share deals or due diligence. Men network very, very well—they have fun and help each other out with their careers. One of my former partners used to say, “No one is ever going to show you a good deal. You have to find it yourself.” I had to work a lot harder because almost no one ever showed me a good deal.
To remedy that, 11 years ago, Broadway Angels was founded. Broadway Angels is a group of the top women VCs, and we share deals and due diligence. Together we have invested in some amazing companies such as The RealReal, 128 Technology, Hint Water, Owlet, and so many more. The RealReal went public and many of us did very well. The CEO was only one of 20 female founders to go public, ever. She had more female investors than men, and many of her investors were Broadway Angels.
Investing in The RealReal showed me how important networks are. I wish I had learned that lesson much earlier in life. In addition to Broadway Angels, All Raise and other groups are working to build strong female networks. These efforts are relatively new but are making strong headway.
TG: That is true, and it is not a surprise for those who study other industries and ecosystems. It’s the challenge of the tyranny of one; even when you are a managing partner at a firm, if you are the only person who is in the minority, it creates challenges for deal flow. Whether or not it is an industry that you are interested in and have prior experience in, when you are the only woman in the room, sometimes all eyes turn to you to look at that deal.
Another positive trend, in addition to the creation of these all-female networks, is there are many male allies who want to be part of it. If you just look at things such as the Founders Pledge, this generation of entrepreneurs understands that having diversity of thought—however you want to define that—in your cap table and on your board is actually a competitive advantage.
We see this trend at Broadway Angels, and I see this at my own firm. There are a lot of women, such as Nancy, who was one of the first, and now me and several others, who have gone off and started their own venture funds. Our partnerships look like our networks. At my firm, we are almost 90% women and people of color on the investing team, which is almost a mirror opposite of the average venture capital firm. It was not by design, but because of who me, my partner Lauren, and the co-founders are. What is natural is you end up recruiting and hiring people who either you know or are referred to you by somebody you trust. That is why we look the way we do, and we see it as a huge advantage.
Increasingly, more and more companies are thinking about that advantage. As they think about growing the company management team or increasing their advisory board, they want us to be part of it, because we are going to be additive. Our networks are clearly different from the networks of their other investors on the cap table. It started out being challenging, but now it has actually turned into a competitive advantage in many ways.
NP: Absolutely, it has been wonderful to see the transition and the next generation of professionals that really do appreciate what we do. We can be role models, which is not something that was on our agenda earlier in our career. That is uplifting.
What is shocking is that I was on a panel with two male venture capitalists and a male moderator. They are not huge names in venture capital, but they are accomplished colleagues. It was all very friendly and upbeat. At the end, the moderator asked the question,“What is your one secret sauce? What makes you successful as an investor?”
The two men went first. The first panelist said, “I am a super seed, early stage investor. I help the entrepreneur really get through both the day-to-day aspects of starting a company, but also the psychology of it, and I am really good at that.” The second VC said, “I am very good at helping our companies to connect with strategic partners and business development, and I understand the psyche of corporations. I knit those worlds together.”
Saving me for last, the moderator then turned to me and said, “Nancy, what is your secret sauce? Is it luck?” He did not say that to anyone else. I was taken aback, but I decided not to say anything and just answered the question, “We have this double bottom line approach that helps entrepreneurs to build great companies and make the world a better place at the same time.”
When everyone had gone home, I said, “Do you realize what you did there? You diminished me by saying everything good that has happened to me is just luck. And yet, you were interested in the substance of the two answers from the other two panelists without pre-judging them.” His face just went pale, and it was obviously an unconscious bias. He apologized, but then the funny thing was that he said, “I went home and told my wife what happened, and she was furious with me.” It was a teachable moment for him. I find it humorous now, but it was a bit of a shock that such an old double standard would still exist so far into our careers.
TG: I was only a few years behind you both coming into the industry, but I was not surprised. This is partially because of personal experiences earlier in my career, but also because I had heard from several of my female entrepreneurs.
NP: I was not that surprised. What is different now is that people talk about it. MeToo made that acceptable and has played a huge role in the evolution of getting to the point where diversity is a huge value add.
EB: Looking back at the last three decades, what has changed the most, and would you say that it has been for better or for worse?
TG: The biggest positive change has been about the understanding of the economic value of diversity—not just the societal value, which as humans and citizens in the world, hopefully we all see, but the economic value of having diversity, as measured by all the things that one can measure outwardly, in your investor group, management team, and on your board, is pretty clear. Thirty years ago, I am not sure if people were studying and measuring it. Even ten years ago, the data was out there but people did not just intuitively believe it. Perhaps people thought that it was the right thing to do, but they did not necessarily think it was the right thing to do for their shareholders. I have seen a light bulb change. I would say it has probably happened within the last five years, in a very meaningful way.
Alongside that, with the rise of more people starting their own venture funds or angel investing, such as Broadway Angels, we have also seen more diversity at early-stage funding. You start to see the beginning of a virtuous cycle: someone who has a different set of networks becomes successful as an entrepreneur, they become an angel investor, maybe they join Broadway Angels so that they can have a network to do that, and they invest in their networks. This starts to create the virtuous cycle of different networks and types of people both having access to venture funding, and being funders of startups. It really is one ecosystem.
NP: I would point to the Harvard study that was done after MeToo, that showed that where there are 10% more female partners in firms, there was an almost 10% increase in profitable exits and a 1.5% spike in overall fund returns each year. It is fabulous to have that data, which we never had in the beginning.
Our awakening came in our double bottom line practice back in 2006. We were a pioneer in measuring various social dimensions, including the diversity of our workforce and our management teams. We were sitting around a table and going through our annual report draft, and I said, “We have a lot of female CEOs or founders. How many do we have? What is the national average?”
It took a month to find one study from Babson College that said that 2% of venture-backed companies had women in their founding or C-suite teams. You cannot believe how hard it was for us to find something on that. Our percentage of women was 26% at the time and I said, “Wow, we are really doing better than the national average, but that national average is pathetic.” That began an odyssey of measuring, which we still do to this day.
Now, we are always around 50%. We were focused on other metrics, as well, but it popped off the page that there was something different about our portfolio. The rigor of measurement and the license to talk about it acts as a megaphone for these changes that need to be made. It is all happening, and happening in ways we could not have predicted.
SHP: The advent of the iPhone really changed the industry tremendously. Now billions and billions of people had a computer in their hands, and the market for VC-funded companies grew tremendously. The billion-dollar valuations and billionaire venture capitalists attracted a different kind of person. Profits have become more important than good.
I only invest in “people and companies that matter.” I ask myself: If the company went away, would the world miss it? VC has attracted a different person—one who is a lot more profit and greed-oriented.
JL: Growing up female in this world over the last three decades, what have you learned that you wish you would have known in the beginning and that you can now share with the next generation?
NP: It is okay to be you. It is okay to be different. Be smart about it, do not walk into a room and make it obvious how different you are, but use it as a tool of distinction that adds to your effectiveness. If you stay true to what you really care about, and are able to be friendly, upfront, and cooperative, you are going to be able to open doors that you never knew existed.
SHP: Networks matter. It took me a while in my career to cultivate meaningful networks, especially with women. I wish I had started earlier. The other is, live your values. Do not do the deal just because it is going to be profitable. Don’t invest in a company if you would not let your kids use the product. Live your values at work and at home.
TG: What I would say to my younger self is, at the right time, do not be afraid to bet on yourself.
NP: So true. That first phrase is important: at the right time. You do not have to do it the day you graduate from college!
TG: Part of what gives you confidence in those moments is when you can look at other people before you—that you can relate to for whatever reason—and say, “I can do that.” I agree with Nancy, and I am certainly not thinking right out of college. For myself and a lot of other women of my generation, we have done the opposite.
I saw a sociological study that was based on MIT cohort data, which looked at what percentage of MIT graduates started their own companies 10, 20, and 30 years out. The difference was dramatic in the percentages of female graduates versus the percentages of male graduates. In general, women were waiting 10–20 years longer before making those changes. I hope that the next generation of entrepreneurs and VCs closes that gap.