The Pregnant Entrepreneur And The VC Who Wouldn't Fund Her(forbes.com)
forbes.com
The Pregnant Entrepreneur And The VC Who Wouldn't Fund Her
http://www.forbes.com/2011/04/21/pregnant-entrepreneur-ceo-and-the-venture-capitalist.html
48 comments
What point do you draw the line? Say a woman entrepreneur got married a year ago and it's getting to be 'about that time'. The inlaws are asking when they're going to hear the patter of tiny feet? Or what if you hear a couple saying 'they're trying for a child'?
Do you want to hire someone at this age? What's the difference, they've got the same goals, one is pregnant, one isn't yet.
It rapidly turns into sexism. So she's going to have to take a while off. She'll have some hormone stuff to deal with. What do you know about that couple? Maybe Dad's going to be the one changing the diapers and getting up at 3. What right do you have to judge?
The whole point is that life goes on and constantly discriminating against women because of this is just wrong.
The point is that she thinks she can handle it, she thinks her team can handle the slack, she's putting her ass on the line. Fair enough, go for it.
Do you want to hire someone at this age? What's the difference, they've got the same goals, one is pregnant, one isn't yet.
It rapidly turns into sexism. So she's going to have to take a while off. She'll have some hormone stuff to deal with. What do you know about that couple? Maybe Dad's going to be the one changing the diapers and getting up at 3. What right do you have to judge?
The whole point is that life goes on and constantly discriminating against women because of this is just wrong.
The point is that she thinks she can handle it, she thinks her team can handle the slack, she's putting her ass on the line. Fair enough, go for it.
Do you want to hire someone at this age? What's the difference, they've got the same goals, one is pregnant, one isn't yet.
The only difference is that with a hiring decision, the law demands the hiring manager should ignore the risks to the business. In aggregate, this is a transfer of wealth from shareholders to pregnant women (in practice, childless women are also harmed [1]).
What right do you have to judge?
The VC has not only the right to determine how his fund's money is spent, but also the responsibility to do so in order to maximize returns.
As long as P(big success | funds preggo) < P(big success | funds slightly less awesome non-preggo), it is the VC's responsibility to choose the non-pregnant person. He would be throwing away his client's money otherwise.
[1] In practice the biggest losers seem to be childless women since the market for hiring women becomes a lemon market. Employers are not able to differentiate lemons from cherries and wind up paying all sellers less. https://en.wikipedia.org/wiki/The_Market_for_Lemons
The only difference is that with a hiring decision, the law demands the hiring manager should ignore the risks to the business. In aggregate, this is a transfer of wealth from shareholders to pregnant women (in practice, childless women are also harmed [1]).
What right do you have to judge?
The VC has not only the right to determine how his fund's money is spent, but also the responsibility to do so in order to maximize returns.
As long as P(big success | funds preggo) < P(big success | funds slightly less awesome non-preggo), it is the VC's responsibility to choose the non-pregnant person. He would be throwing away his client's money otherwise.
[1] In practice the biggest losers seem to be childless women since the market for hiring women becomes a lemon market. Employers are not able to differentiate lemons from cherries and wind up paying all sellers less. https://en.wikipedia.org/wiki/The_Market_for_Lemons
>As long as P(big success | funds preggo) < P(big success | funds slightly less awesome non-preggo), it is the VC's responsibility to choose the non-pregnant person. He would be throwing away his client's money otherwise.
With that line of logic, where do you stop? Is there any variable on which its not OK to condition?
I actually think its fair enough to say that there are certain factors that we all agree, as a society, that we should ignore, when it comes to decisions like this.
Sometimes we might codify that agreement to ignore into law, like the hiring law you mention which prevents discrimination on certain grounds. But the reason it has been so codified, is because we agree that type of discrimination is globally bad, right?
Would you really argue that VCs are supposed to absolutely anything to maximise returns, within the law, even something we all know is bad?
With that line of logic, where do you stop? Is there any variable on which its not OK to condition?
I actually think its fair enough to say that there are certain factors that we all agree, as a society, that we should ignore, when it comes to decisions like this.
Sometimes we might codify that agreement to ignore into law, like the hiring law you mention which prevents discrimination on certain grounds. But the reason it has been so codified, is because we agree that type of discrimination is globally bad, right?
Would you really argue that VCs are supposed to absolutely anything to maximise returns, within the law, even something we all know is bad?
I don't see any compelling reason why the choices of an entrepreneur are a variable that the VC should ignore. Could you explain why you believe this?
(As a side note, I also see no reason why shareholders of corporations should have any special obligation to subsidize parents. But that's a separate debate.)
(As a side note, I also see no reason why shareholders of corporations should have any special obligation to subsidize parents. But that's a separate debate.)
> I don't see any compelling reason why the choices of an entrepreneur are a variable that the VC should ignore.
Many people agree that e.g. the entrepreneur's religion and sexual preferences are variables the VC should ignore, even if they were statistically correlated to success. Do you disagree with that position?
> I also see no reason why shareholders of corporations should have any special obligation to subsidize parents.
I do: the parents are subsidizing the future. The shareholders' money is going to be pretty worthless to them in the long run if there is no next generation of workforce from whom to purchase goods and services.
Many people agree that e.g. the entrepreneur's religion and sexual preferences are variables the VC should ignore, even if they were statistically correlated to success. Do you disagree with that position?
> I also see no reason why shareholders of corporations should have any special obligation to subsidize parents.
I do: the parents are subsidizing the future. The shareholders' money is going to be pretty worthless to them in the long run if there is no next generation of workforce from whom to purchase goods and services.
Do you disagree with that position?
Yes.
But lets ignore my position, I'd like to extend your logic. You want VCs to make suboptimal investments for political reasons. Should you also be obligated to invest some fraction of your 401k in businesses you think are a suboptimal investment? If not, why not?
I do: the parents are subsidizing the future. The shareholders' money is going to be pretty worthless to them in the long run if there is no next generation of workforce from whom to purchase goods and services.
This argument is far more broad than you realize.
For example: "parents are subsidizing the future. The childless career woman's money is going to be pretty worthless to her in the long run if there is no next generation of workforce...".
Therefore, we should force childless career women to subsidize parents.
Do you believe the latter as well? If not, why not? What distinguishes childless career women from shareholders?
Yes.
But lets ignore my position, I'd like to extend your logic. You want VCs to make suboptimal investments for political reasons. Should you also be obligated to invest some fraction of your 401k in businesses you think are a suboptimal investment? If not, why not?
I do: the parents are subsidizing the future. The shareholders' money is going to be pretty worthless to them in the long run if there is no next generation of workforce from whom to purchase goods and services.
This argument is far more broad than you realize.
For example: "parents are subsidizing the future. The childless career woman's money is going to be pretty worthless to her in the long run if there is no next generation of workforce...".
Therefore, we should force childless career women to subsidize parents.
Do you believe the latter as well? If not, why not? What distinguishes childless career women from shareholders?
I believe childless people of both sexes should have to pay their share of the cost of raising the next generation, yes.
Do you believe all investors (including Joe 401k) should be forced to make bad bets for political purposes, or only some? If so, which ones?
> The VC has not only the right to determine how his fund's money is spent, but also the responsibility to do so in order to maximize returns.
That's one way to look at it. Another way to look at it is that societies that tolerate an ethos that maximizes return on financial capital at the cost of burning human capital, are going to end up in evolution's recycle bin, to be replaced by societies that don't. And part of the point of ethics is to find solutions less cruel and drastic than waiting for evolution to solve problems for us.
That's one way to look at it. Another way to look at it is that societies that tolerate an ethos that maximizes return on financial capital at the cost of burning human capital, are going to end up in evolution's recycle bin, to be replaced by societies that don't. And part of the point of ethics is to find solutions less cruel and drastic than waiting for evolution to solve problems for us.
How is human capital burned by funding the person most likely to succeed?
It's burned by creating an atmosphere in which people get to thinking they need to start a company instead of having children. (Or thinking they'll have children "later" which typically amounts to the same thing - "life is what happens when you're busy making other plans".)
A right to discriminate? What you're advocating is a right to discriminate based on your unfounded feelings that a pregnant woman can't handle it.
You're basically a sexist but you don't want to admit it. That's what all this boils down to. Let's tell the women they're not good enough because popping out a sprog makes their brains go mushy.
Sounds harsh? Take a good look in the mirror.
What is your real problem with the women founder?
EDIT: I get angry at this shit as my sister, one of the most driven and talented people I know is at nearing this stage in life and I would bet on her a thousand times over other people. She's an amazing woman and I would happily bet on her founding a successful company in a heartbeat regardless of whether she was having a child or not.
You're basically a sexist but you don't want to admit it. That's what all this boils down to. Let's tell the women they're not good enough because popping out a sprog makes their brains go mushy.
Sounds harsh? Take a good look in the mirror.
What is your real problem with the women founder?
EDIT: I get angry at this shit as my sister, one of the most driven and talented people I know is at nearing this stage in life and I would bet on her a thousand times over other people. She's an amazing woman and I would happily bet on her founding a successful company in a heartbeat regardless of whether she was having a child or not.
> The point is that she thinks she can handle it, she thinks her team can handle the slack, she's putting her ass on the line. Fair enough, go for it.
There's no obligation for anybody else to put their ass on the line along with her.
If she thinks she can do it, then more power to her.
But if I think she's unlikely to succeed, she's not getting my money, pregnant or not.
There's no obligation for anybody else to put their ass on the line along with her.
If she thinks she can do it, then more power to her.
But if I think she's unlikely to succeed, she's not getting my money, pregnant or not.
So you're just going to disregard the entire point of the article in your comment?
Most of the article seemed to be pointing out that she could do it, regardless of what the VC thinks.
Or did you mean the "nobody questions an expecting father's ability to work" part?
I just don't think it's true. If I were going to invest money in a small business run by a man expecting a child, I'd question whether he'd be able to handle both running a business and having a baby.
Unless I missed it, there's actually no evidence showing the VC from the article wouldn't do the same thing.
Or did you mean the "nobody questions an expecting father's ability to work" part?
I just don't think it's true. If I were going to invest money in a small business run by a man expecting a child, I'd question whether he'd be able to handle both running a business and having a baby.
Unless I missed it, there's actually no evidence showing the VC from the article wouldn't do the same thing.
victork2 mentioned "anybody" having children and "both parents". I think it's clear that anybody who will have to deal with a new baby is going to be under additional stress. And the party becoming pregnant is going to be under even more stress. It is reasonable for those stress factors to be taken into consideration if you're making a decision about a person's likelihood for success. You can't simply ignore those facts for fear of being labeled a sexist, or anti-family, or something like that. Reality has a way of ignoring what is politically correct.
> victork2 mentioned "anybody" having children and "both parents".
That's great, but the practical reality is that you're unlikely to see a male founder asked anything similar, or be judged based on it. There's still a societal conception that "the woman will take care of the kids," so the new-child flak that would potentially make a founder look worse doesn't necessarily affect potential male founders to the same degree. It still boils down to a male-privilege issue (I mean, like the story said, have you ever heard of somebody claiming that an expectant father being likely to cause his company to fail?).
(Aside: the story sucks and is misleading, however, because a VC did fund her project. Good for both of them. I hope they kick ass.)
That's great, but the practical reality is that you're unlikely to see a male founder asked anything similar, or be judged based on it. There's still a societal conception that "the woman will take care of the kids," so the new-child flak that would potentially make a founder look worse doesn't necessarily affect potential male founders to the same degree. It still boils down to a male-privilege issue (I mean, like the story said, have you ever heard of somebody claiming that an expectant father being likely to cause his company to fail?).
(Aside: the story sucks and is misleading, however, because a VC did fund her project. Good for both of them. I hope they kick ass.)
It's difficult for men to breastfeed the kids, that is one of the problems... And why is it not a female-privilege issue? How many jobs are so great that they are preferable to taking care of your own kids?
I can say with absolute certainty that if my wife could bring home the same salary as I do, I would trade places with her in a heartbeat and be a stay-at-home dad. It's not even a ? in my mind.
I don't think it is sexism at all to take basic statistics about people's lives into account.
[deleted]
Um. The headline here says "The VC Who Wouldn't Fund Her" but the article talks about a VC that did fund her though expressed his doubts. Also he's one of "thirty plus" investors.
Both articles were written a month ago and the company she founded has already shut down: http://blog.profounder.com/2012/02/17/profounder-shutting-do...
However I'm sure Forbes and Business Insider are very grateful for the ad impressions.
Both articles were written a month ago and the company she founded has already shut down: http://blog.profounder.com/2012/02/17/profounder-shutting-do...
However I'm sure Forbes and Business Insider are very grateful for the ad impressions.
It's particularly significant that this is twins we're talking about, not just a "typical" pregnancy.
Let me tell you from personal experience that twins, two babies in parallel, are FAR more than twice the work of two sequential babies.
Be afraid. Be very afraid.
Let me tell you from personal experience that twins, two babies in parallel, are FAR more than twice the work of two sequential babies.
Be afraid. Be very afraid.
I'm sorry but to me it sounds like a lot of bla bla about how their startup is all about work life balance, and a small footnote addressing the real "problem": "yeah, I have planned for that".
It's crazy to assume that having twins won't have any impact whatsoever. Even if she says she will hire full time help. Is that a 100% certainty? Or just a 70% certainty or whatever? Even if she is 100% determined now to have full time help, she might change her mind once the babies are there (nobody knows what it really feels like before they have their own kids). Even with full time help, I suppose either she won't be breastfeeding or it will be a lot of hassle.
So while I won't say it is impossible to work at the same time (although personally I can't see how, I have a lot of respect for anyone with twins to begin with...), there still is some distraction. Seems to me it should be the right of a VC to take that into account.
It's crazy to assume that having twins won't have any impact whatsoever. Even if she says she will hire full time help. Is that a 100% certainty? Or just a 70% certainty or whatever? Even if she is 100% determined now to have full time help, she might change her mind once the babies are there (nobody knows what it really feels like before they have their own kids). Even with full time help, I suppose either she won't be breastfeeding or it will be a lot of hassle.
So while I won't say it is impossible to work at the same time (although personally I can't see how, I have a lot of respect for anyone with twins to begin with...), there still is some distraction. Seems to me it should be the right of a VC to take that into account.
> I've never heard someone ask the same of a founder-CEO-dad, worrying about a slightly different dirty little thought: "An expectant father/CEO will fail his company."
Well, of course I don't have any way of experiencing both and comparing them, but isn't a pregnancy much more difficult for the pregnant female? No matter how many times the dad runs out to buy watermelon at 4 in the morning, he doesn't have a living thing growing in his uterus.
I don't agree with the statement, "a pregnant ceo will fail her company". I might agree with the statement, "all else being equal, the person with less to overcome is more likely to succeed". And likeliness of success is pretty much what VCs do.
Well, of course I don't have any way of experiencing both and comparing them, but isn't a pregnancy much more difficult for the pregnant female? No matter how many times the dad runs out to buy watermelon at 4 in the morning, he doesn't have a living thing growing in his uterus.
I don't agree with the statement, "a pregnant ceo will fail her company". I might agree with the statement, "all else being equal, the person with less to overcome is more likely to succeed". And likeliness of success is pretty much what VCs do.
I've seen at least one company go on the back burner due to a founder-CEO becoming a dad. It's a very real concern. That said, I know quite a few new parents running startups without visible incident, so who knows.
At the risk of being a sexist pig, not funding a pregnant entrepreneur sounds like a pretty smart move. Attempting to start a company and a family at the same time would indicate to me incredibly poor judgement, and a lack of commitment to both the company and the family.
Headline is completely misleading and unfair to the VC in question.
From his post where he voiced his thoughts on the topic- "Ultimately I decided to invest, namely because I gave a commitment to invest and decided that pregnancy shouldn’t impact my decision."
http://www.businessinsider.com/women-founders-2011-4
From his post where he voiced his thoughts on the topic- "Ultimately I decided to invest, namely because I gave a commitment to invest and decided that pregnancy shouldn’t impact my decision."
http://www.businessinsider.com/women-founders-2011-4
Kids and startups are doable. Like she mentioned in the article - its about prioritizing and the support you have at home and at work. I'm speaking as a father of two boys and a as someone at his third venture.
The most unintentionally interesting point of this article, which was written in 2011, is that going to profounder.com reveals that they are now closing down, due to regulatory restrictions that prevent them from growing their business.
The most unintentionally interesting point of this article, which was written in 2011, is that going to profounder.com reveals that they are now closing down, due to regulatory restrictions that prevent them from growing their business.
Looking at this from a purely business point of view (which I guess a VC does), funding is not charity. Investing in someone who's about to start a family, male or female, sounds like a bad investment.
So, is a VC a bad person for not investing in what could be a bad investment?
So, is a VC a bad person for not investing in what could be a bad investment?
I'm guessing the original author didn't read the BI article because the VC DID fund her.
I'm quite sure that most people in the Valley-VC-feedback-loop have no idea how they appear to the rest of America. Someone doubting another person's ability because she's a woman in a public blog, and then that woman calmly writing a public response, and then commenters here agreeing with the VC--it's like you guys are on another planet, one that mirrors 19th-century society.
Not her ability because she is a woman, but because she is pregnant. In what enlightened part of the world would that not plant a seed of doubt in people's minds?
"Nearly all my 30-plus investors responded immediately with enthusiasm and congratulations, and many of them also offered to help [...]"
i certainly did not expect this. i'm always pessimistic about gender issues in the real world. maybe it is better than i think (not good, that's for sure).
i certainly did not expect this. i'm always pessimistic about gender issues in the real world. maybe it is better than i think (not good, that's for sure).
They all said, "A baby and a start up? Good luck with that."
It doesn't matter if you're a man or a woman: starting up a company when you know you have twins on the way is a really ballsy move. Like, ballsy to the point that I personally believe it shows a lack of dedication to the company, the babies, or perhaps a bit of both.
A startup company is basically a newborn baby. It requires continuous attention and care, cleaning and feeding. Except, unlike in the case of twins, it can't be given a bath and fed alongside another baby. This baby is an attention-hungry baby with special needs and demands, which requires focused, dedicated care to thrive and grow.
And to reverse the analogy, caring for children is in itself a full-time job, just as hard if not harder than starting a company. When shit hits the fan and you get 3 hours of sleep every night for a week, which of your dependents becomes your priority? Are you going to care for your children or get hard work done?
I'm not arguing that it can't be done, but I also think there's little argument that taking on both significantlty drives down the odds of success, to the point that it's questionable why any VC would give them their money.
I say either found your company before you have kids and wait until the company is no longer a newborn, or have your kids before you found and wait until the kids are no longer newborns.
A startup company is basically a newborn baby. It requires continuous attention and care, cleaning and feeding. Except, unlike in the case of twins, it can't be given a bath and fed alongside another baby. This baby is an attention-hungry baby with special needs and demands, which requires focused, dedicated care to thrive and grow.
And to reverse the analogy, caring for children is in itself a full-time job, just as hard if not harder than starting a company. When shit hits the fan and you get 3 hours of sleep every night for a week, which of your dependents becomes your priority? Are you going to care for your children or get hard work done?
I'm not arguing that it can't be done, but I also think there's little argument that taking on both significantlty drives down the odds of success, to the point that it's questionable why any VC would give them their money.
I say either found your company before you have kids and wait until the company is no longer a newborn, or have your kids before you found and wait until the kids are no longer newborns.
The problem is instead that to make the asset class decide we're worth their investment, we can't have families or pretty much anything else beyond providing them returns to support their lifestyle.
Good grief. Steve Jobs and Bill Gates ripped all of you guys off soooo bad and it's like none of you get it. 80k at 80 hours a week is less than someone makes in a supermarket. Suckers, all of you.
Good grief. Steve Jobs and Bill Gates ripped all of you guys off soooo bad and it's like none of you get it. 80k at 80 hours a week is less than someone makes in a supermarket. Suckers, all of you.
Actually, that works out to $20/hr, which would be pretty good for a supermarket salary.
$20.00/hour is not at all unheard of for an experienced checker at a major chain (it varies a lot depending on the area of the country, though).
However, let's play devil's advocate and extend it to the man's case too. If I put myself in the role of a VC I would think twice about hiring anybody who's going to have children soon. Children, from what I gathered, are emotionally and physically draining for both parents. If you add up the challenges of having a startup, which is like another child well that's a good damn reason to refuse investing.
The problem is that pregnancy and a child coming soon can be physically seen on a woman, but we can't ask a VC to be blind on that.