The investment sector is still predominantly male. Sanna Westman, investment manager in venture capital firm Creandum, points out the benefits to be reaped if more women were investors and company founders.
Creandum, a Swedish company and Nordic leader in VC fund investment, speaks out on behalf of equality in the investment world. It has examined how equality is achieved in practice, both in its own operations and in its portfolio companies. The company trained personnel to recognise biases, and shines a spotlight on equality at industry events. Creandum was involved in Female Founder Office Hours, arranged by female founders and female VC investors, at the Helsinki Slush startup event. Why should we be talking about equality, Sanna Westman?
“Because it’s about winning and doing the right thing. Research shows that diverse teams perform better. We believe we would perform better ourselves if our teams were more diverse,” Westman says.
“There are only a few female founders and CEOs in our portfolio companies. But we don’t believe that men are always better leaders than women. In order to be winning, companies should use their whole potential,” she adds.
The feeling that the present situation is not right is, in Westman’s opinion, a natural reaction to information about inequality.
What has been done in Creandum?
“When Creandum started to address equality, one of the first steps was to educat ourselves about unconscious biases and prejudices that can affect decision-making. We started to use that information to adjust our investment process. At Creandum, for instance, we consciously avoid the same argument that works to men’s advantage and women’s disadvantage”, Westman says.
Creandum sends both male and female speakers to events outside the company. It could also insist that the organisers arrange a more equal line-up. An all-male panel is not an event in which Creandum staff want to participate. The company endeavours to make its website and other material gender neutral.
Admittedly, Creandum itself is far from being a paragon of equality. Sanna Westman is the only woman in the 10-person investment team, and the first to take maternity leave.
“We all understand that equality is important, and we all want to promote it. Nevertheless, we know too little about how to do that in practice. Change takes time, but at least we’ve made a start,” she comments.
What’s the situation in portfolio companies?
Information is needed to bring about change. A few months ago, when Creandum measured the status of equality in 43 of its portfolio companies, 35% of their personnel were female, while 21% of management team members and 10.5% of board members were female. The plan is to conduct the same survey at regular intervals.
“We hope that over time we’ll see some improvement in these figures. Many companies are still quite small. We know that those companies with more equality are the ones that grew that way from the start. That’s why we encourage our portfolio companies to make choices that support diversity as early as possible,” explains Westman.
The more females there are in the management teams of portfolio companies, the more females there will be also at other levels. So, influencing who heads the company possibly also promotes diversity throughout the company. Gender distribution among board members does not, however, seem to have so clear a correlation to gender distribution throughout the company.
It is a surprise to Westman that many startups make clear the importance of diversity and bring it up in discussions with an investor. People are clearly aware of the issue. “It’s still a long way before informing and talking is transformed into action,” she points out.
Why is it harder for females to obtain financing?
Although the evidence shows that companies led by females perform better than those led by males, it is harder for females to receive startup or growth financing. Westman goes back to unconscious attitudes and behaviours in identifying the reason.
“It’s easy to be drawn into what you recognize. The boards of large investment companies generally consist of elderly white men, who tend to select white men as executive managers. They, in turn, recruit men for their staff. Perhaps they’ve missed something – both in the recruitment interviews and when interviewing founders.”
“Maybe we should expand our view of what a good founder looks like and how a founder communicates,” says Westman.
So that more women can rise to management positions, innovative companies should have more women also at other levels. Westman makes a comparison to sports: a large pool of active participants is needed to breed top athletes. Role models and support are also necessary. That is exactly why Creandum personnel talk and write publicly about equality and why they support Female Founder events at Slush.
Creandum picked on gender equality in particular because you have to start somewhere. Diversity also has many other dimensions. Their turn will come later.
Photos: Junnu Lusa
Sanna Westman
Who she is: Investment Manager at Creandum since June 2017. Board Observer on the boards of Careship, FirstVet, Emidemic Sound and KRY. Lives in Stockholm, Sweden
Education: BSc, Business and Economics, Handelshögskolan i Stockholm.
Earlier positions: Head of business development for the Qliro Group and later headed the subsidiaries Bodystore.com and FitnessMarket. Before that McKinsey & Company.
Known also for: Former fencer at European Championship level.
Creandum Advisor AB
What it is: Venture capital company with funds investing in innovative companies seeking international growth through technology.
Where it is: Stockholm, San Francisco and Berlin. Team of 16 people.
Funds: Latest fund (Creandum IV) 2016. Raised altogether MEUR 435 and financed 75 companies including, for instance, Klarna and Virta. Tesi has invested in the Creandum II, III and IV funds.
Website: creandum.com
See also: Female Founder Office Hours