>> We don't generally talk about IPOs very often here at The Damage Report,
but perhaps we should, because a recent report breaking down some of the factors
that have gone into what sort of people are launching them and who is not. It's actually
pretty fascinating. And joining us now, to break it down is the editor
in chief of Business Insider, Alyson Shontell, welcome to the Damage Report.
>> Thanks for having me. >> Glad to have you here. So, what's
lacking from this group of recently launched IPOs? >> Yeah, women, lots and lots of women. So over
400 companies went public in the US last year, and only about 4 were founded and led by women.
And so, that's a pretty steep contrast and historically it's not much better. When we
pulled data with NASDAQ to look at how many examples we could find of female founders who
were able to scale their companies to IPO and kind of maintain CEO as they were going public.
That number we could come up with was only about 20. So that's 20 out of 1000s of companies that
are publicly traded on the stock exchanges. So there's a pretty wide gap between how big a woman
can tend to scale their business versus a man. >> That's pretty amazing.
That historic number almost makes the number for this last year seem not as bad by comparison, but
still obviously horrific if you're talking about 1%. So, I know some of this is probably gonna go
into the area of speculation, but what are some initial, potential hypotheses as to why this is?
>> Yeah, so it's funny you say that about last year. Last year was
exponential growth, I guess you could say. In the chart before it was 1 or 2,
and actually about 13 of the 20 examples we could find were in the last 7 to 8 years.
So I guess things are improving, although we would like to see it improved quite a bit more.
So some of the reasons, I think one that is widely discussed is what's going on in venture capital.
The fact that there are, of course, more men than women in venture capital seats of power
with more capital behind them and that's part of it. And I think if you get more diversity within
venture capital, then you could get more diversity around ideas, and which ideas are worth backing.
Of the trillions of dollars that are spent in venture capital every year only about less than
3% goes to all women founded teams. If you throw a man co-founder in the mix, like a woman and a man,
then it increases to about 14%. And then you don't even want to know for BIPOC women how bad it is.
It's less than a percent. So BIPOC women aren't even getting a single percentage
of venture capital dollars. So that's that's a huge issue. And there's a lot of other reasons
you could say. I think that maybe because it's harder to get funding if you're a woman.
Women themselves are pushed to think of ideas that they
uniquely can solve rather than solving the biggest problems in the world.
And so the ideas probably aren't as big. So Jeff Bezos wasn't uniquely qualified to
start a bookstore online, he just did it. He thought it was a huge sector that he
should be going after. Elon Musk had no qualification to start rocket companies
or anything like that, but he wanted to tackle giant ideas.
And I think we also need more women to just feel more comfortable pursuing these giant,
huge ideas that maybe they're not uniquely qualified for,
but they want to tackle it anyways. >> It also seems like in venture capital
you have so few women represented there, and women are being pushed into working on
ideas or solutions or products that are specifically geared towards women.
They also might not seem as appealing to a group of investors that don't
necessarily know or value that world. >> Yep, I think there's definitely a
cyclical problem here to some extent. >> So you also mentioned, so the part
of the problem is the funding. You also mentioned and maintaining CEO after receiving the funding.
Is that something that we've seen, that women are sort of being pushed out of leadership
roles once I guess that has been passed? >> Well, so there's a couple things. One
is when we looked at women who were CEOs of companies that they didn't
found who were taking companies public, we only found about nine examples of that.
So even when you're looking at CEO positions of women, whether they founded the company or not,
there's not that many examples, at least that are publicly traded currently. And then, yeah, I mean,
I think that if you look at corporate America, about 7% of all Fortune 500 CEOs are women.
And often there are studies that show women get kind of put in sometimes the COO position or
the number two position, but it's really hard for them to get to that number one position.
It's a little bit yet to be seen if the current
ranking class of women who are like the Sheryl Sandbergs, who are COOS.
And could probably easily be CEOs in their own right, do make it on to that next step
of becoming CEO. Wiil they become the Mark Zuckerberg? I think that's another thing that
we hope to see a shift in, but right now a lot of women are getting stuck in number twos.
>> So we talked a little bit about some of the consequences that could come from more women
being represented in venture capital, other than I guess some of the obvious equality
benefits to more women receiving funding and leading IPOs. What are some of the other,
either economic or social, consequences that you could see coming from that change?
>> Yeah, I think that there's a lot, it's not just some moral obligation that women and men
should be equal. Melinda Gates wrote a good book on this called The Moment of Lift. And
out of all of her research and all the work she's done, she found that
if you just lift up women in society, it actually lifts up the rest of society around.
It creates more economic opportunity and whatnot. And there's a lot of studies that also show that
companies can run more effectively often when women are in charge. Not to say that men are
bad leaders, they're often tremendous. But women,
for whatever reason, you can see lifts in bottom lines based on different studies.
All sorts of kind of economic gain just within companies themselves when you have more women
in power. So there's good business reasons to do this. It's not just some moral stance,
although I agree with that as well. >> So look at obviously,
the numbers in terms of the IPOs.
We talked about they're going up, but they only seem to be going up so much because the
basement was so low on that. Does it seem like there's movement in this direction? Are
there initiatives that are being worked on that seem to be working to provide more diversity?
>> I think there's definitely more attention going into it.
I was talking to one another female founder, and she was saying, look,
first we needed to fill the stadium. We need to get more women in the arena. And we spent
the last decade really trying to advocate for that, and there's more advocating we can do.
But now that they're in the arena, then we need to get them to bigger and bigger positions,
and more and more capital behind them and things like that. So I think that's the phase of growth
that we're in now. One is continuing to encourage women that
entrepreneurship should be a path that more people should consider.
If you want really women to be as powerful as men, look at the most powerful people in the world. And
one good example of this is the billionaires list that Forbes does every year. All of them are men,
and they're men founders specifically, or they inherited wealth from their dads who
are founders, or the grandpa's who are founders.
And so if you want to reach the same scale of power that men have, you need to build equal
wealth if you're a woman. And the only way to do that is to create the next Fortune 500 companies.
And so I'm encouraging more women to consider that route earlier, I think it's also important too,
>> Sort of getting that ambition going at an earlier age basically?
>> Yes. >> Okay, well,
Allison, really appreciate you joining us on the show today and breaking down this support,
very fascinating and I appreciate it. >> Thank you, Jon.