Which Comes First, System-Change or Financial Returns from Gender Lens Investing?



Something’s gotta give. By 2025, two-thirds of private wealth will be in female hands. Yet, today, only 10 percent of venture capital financing goes to women. 

What gives, or rather, who?

lens-640x480I’ve been all over this week’s SOCAP conference rounding up views on gender lens investing. On the second morning of the conference, Criterion Institute’s Joy Anderson highlighted the need for a “worldview change” that “puts gender analysis into finance to get better outcomes.” At lunch, Elevar Equity’s Johanna Posada said, “It’s about delivering returns.”

 Your trusty gender correspondent wonders: which comes first? How do gender lens investors get worldview change without returns? How do they get returns without worldview change?

[blockquote author=”Nancy Pfund, DBL Partners” pull=”pullleft”](Gender lens investing is) a post-card from the future, …. an early indicator of what will be normal later.[/blockquote]

As Anderson put it, ‘we don’t want to be a niche within a fringe.” For her, gender lens investing is the thin edge of the wedge for system-wide transformation in the finance.  Such a transformation requires a  dispiriting awareness of the current system’s gender-related limitations – what Fran Seegull of ImpactAssets called “market failures.”

venture-funding-rounds-in-female-funded-startupsIt also requires a big dose of positive reinforcement. To Nancy Pfund of DBL Partners, gender lens investing is a “post-card from the future, …. an early indicator of what will be normal later.”

In the post-lunch doldrums, I found myself in several conversations about what will get us from what seems somewhat strange now to what we hope will be the new normal later. Here’s my cheat sheet:

  1. Hire more women managers and directors. Stephanie Nieman of SJF Ventures points out that investment firms with women on their boards or as managers are three times more likely to invest in women.
  2. Do a “gender audit” of your business. Maria Denise Duarte of Agora Partnerships reports that such an audit by one of her clients in Guatemala revealed that a majority of their customers were female, and their better understanding increased the company’s profitability.
  3. Remember that gender isn’t only about women. Changing gender roles are challenging, but can benefit BOTH men and women, suggests Andy Lower of ADAP Capital. A new report from Oxfam and Value for Women calls for improving support for women’s entrepreneurship, including through direct engagement with men.
  4. Have your head examined. Donella Meadows found that the highest lever for systems change is “the mindset out of which the system arises.” This reminded me of what Michelle Long of Balle stressed in the conference’s opening plenary:  people feel good when they are “connected to purpose, to each other, to the natural world and to their capacity for generosity.”  

That may not be the mindset of contemporary finance, but it aptly describes the worldview of SOCAP. And it underscores the relevance of gender lens investing – which shares many of these values, to progress on reshaping both our financial markets and our society as a whole.

I gotta go. Ben and Jerry’s is offering free scoops of ice cream in the Big Top.  More tomorrow on what else has gotta give.

[seperator style=”style1″]Disclosure[/seperator]

Photo by Palo Alto Impact.

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