Women Executives Lead Companies To Greater Financial Success, But Disparity Remains
BY GRACE MOEN FOR HEALTH 2.0
(Lisa Suennen, investor and Venture Valkyrie, on stage at Health 2.0 VentureConnect 2018)
Women make up 50.8% of the United States population, but only 10.2% of digital health startup leadership. The ramifications of this grossly disproportionate stat have rippling consequences across industry, humanity, and bottom lines. Brent Stackhouse of Mount Sinai Ventures expressed his concern during our Investor Soundoff interview last year: “I worry what the impact is when communities are underrepresented inside companies that are trying to solve problems addressing the health and wellness of those same communities” he said. To illustrate the real gender imbalance even further, a recent study found that very few American consumers could name a famous female tech leader, but of those who could, roughly half named Alexa and Siri. This is a facepalm moment if there ever was one.
Hope does exist, but with a (giant) grain of salt. Rock Health’s quarterly and annual reports are the crowning jewels of industry data and from the latest batch of research we learn that women are taking on leadership roles in larger numbers, albeit at a snail's pace. The number of female digital health VC partners rose from 11.4% in 2015 to 12.2% in 2018. And women in CEO positions for digital health startups rose from 8.8% in 2015 to 10.2% in 2018.
Despite these embarrassingly low rates of women in leadership roles, there is a mountain of data that suggests female leadership actually increases ROI and the bottom line within organizations. McKinsey & Co reports that companies with female leadership are 21% more profitable than those who are male-dominated. Back in Q3 of 2017, Health IT News reported that “the average deal size for companies led by women CEOs was $31.4 million compared to $11.3 million for those with men CEOs.” While only 17% of funded startups have women on their executive teams, those who do are poised to do very well. Research by Rock Health has seen women raise 64% more on their first round of funding relative to their male-led counterparts. And if optics and consumer trust are important to these organizations, they should also note that a majority of Americans say they would trust “big tech” more if more women were at the helm. There’s a glimmer of pride here knowing that our digital health sector includes more female investors than traditional capital raising groups at 11% vs. 7% respectively.
These investment stats are exciting, but aren’t yet translating into greater numbers of women in those leadership roles. For women who get to the top though, they appear to do quite well. So what will it take to move the needle? Sheryl says lean in. Michelle says that’s not the full story. Others tout girls education as the pivotal investment required. We spoke with Indu Subaiya, co-founder of Health 2.0 and EVP at HIMSS, to get her take on it. “Often it comes down to who you know and I think there's a dynamic that can set in if you're not vigilant. If you're a man making a decision based on who you know, you end up hiring other men you know. It’s convenient. Therefore it’s important to expand your realm. Diverse voices exist” she says, “try harder.” One way to do so is to go outside your own industry, think cross-sector, and for women to recommend other women.
Dawn Owens, former CEO of Optum Health and president of TripleTree, a group that invests in growth-stage health care technologies, has similar ideas on how to lift women into positions of leadership. In a recent interview she said, "pick your head up – don't just be great at what you do … Build relationships, invest in people, and the 'soft stuff,' and don't hesitate to leverage who and what you know. Understand the broader context. It's OK to advocate for yourself; in fact, you have to. Know yourself."
The walls of the exclusionary boys club of venture capital are slowly crumbling. We know this because there are some shining examples of for-women-by-women investment groups that exist today, including but not limited to Female Founders Fund, Aligned Partners, Halogen Ventures, Urban Innovation Fund, Glasswing Ventures, Fika Ventures, SoGal Ventures, 1843 Capital, Illuminate Ventures, Brilliant Ventures, Relentless Venture Fund, and Springboard Growth Capital, an investment firm that focuses on women-led startups such as ClassPass and Health 2.0 alum including Medable and b.well. And, of course, there is C-Sweetener, Lisa Suennen’s mentorship initiative. Get to know these groups, your career will thank you.
If we know that female leadership is good for the bottom line and good for public image, and you also spend time on the conference circuit, you may be equally irritated that “manels” -- or male-dominated panels -- are still a thing. Gender disparity played out on stage is as antiquated as it is lazy. Halle Tecco, investor and outspoken advocate for the death of manels will hold conference organizer’s feet to the fire if she sees this discrimination in action. Exhibit A and Exhibit B:
(Courtesy of Halle Tecco's Twitter account)
Health 2.0 isn’t perfect, but we are proud of a conference legacy that includes some of the highest industry rates for narrowing the gap between male and female representation on stage. At our upcoming Health 2.0 VentureConnect event, Feb 13, at HIMSS Global, come meet Megan Zweig (Rock Health), Emma Cartmel (Cartmell Ventures), Rebecca MacKinnon (Springboard), Liz Rockett (KP Ventures), Rebecca Kaul (MD Anderson), Michelle Longmire (Medable), Kristen Valdes (b.well), Julia Cheek (Everly Well), and Lisa Bair (Quantuvis), bringing our onstage gender ratio to an even 50:50 split.