Reading: Want a Stronger, More Successful Company? Invest in Women. (Duh.)

Edy Dorsen sees more and more women 40+ pitching their companies to Women’s Venture Capital Fund, the firm she started in 2013. What makes going out on their own so appealing in midlife? Older entrepreneurs have both the desire to carve their own path and the experience to make it work, Dorsen says. She insists funding women isn’t a feel-good endeavor; it just makes good business sense. Studies show that gender diverse leadership generates better financial performance and greater productivity and innovation.

In this enlightening and informative Q&A, Dorsen dives deep into what the venture capital landscape looks like today, and how women over 40 can make a splash and get the money they need to grow their businesses.

CoveyClub: When you created your firm in 2013, leadership teams that included women got 5% of VC funding. (And that’s a low bar.) Now, according to Fortune in 2017, Female founders got 2% of VC dollars. Everyone knows the stats about how women founders offer better returns, how diverse teams return higher revenue, and yet the numbers don’t move. What are we not saying or doing?

Edith Dorsen: Barriers continue to be perpetuated. There’s a bent in Silicon Valley to fund entrepreneurs who are part of successful teams. And in most cases, women have not previously been part of successful tech teams. They’re not in the club, and it’s hard to break into the club. I call it the invirtuous circle.

At least now it’s talked about a lot: the unconscious bias. We all have it. We need to call it out more and more. But frankly VC is a very high-risk business. In high-risk anything, we feel more comfortable with those who look and sound like us, and who have experiences like our own. So until more decision-makers with capital come from diverse backgrounds, we will continue to butt up against conscious or unconscious bias.

So how do we move ahead? Responsibility lies with investors — not just with VCs. People and institutions who give their money to funds have to demand that diverse teams and female entrepreneurs be allowed equal opportunities to pitch and be heard.

CoveyClub: What about older women, 40+? What percent of VC money are they getting?

Edith Dorsen: In our first fund, we probably backed more mid-career women. I really liked them. These women would come out of the tech industry with 15-plus years of experience and skills.

But in general [being an entrepreneur] is more challenging. You can’t just step out of a big corporation and decide to be an entrepreneur — you have to have a skillset and a proclivity for it. There are funds which will not embrace older women, so you have to find those who are open to entrepreneurs of different backgrounds and experiences.

On the VC side, there was one group of VCs, like three men I went to school with at Harvard Business School, who became stunning successes right out of the gate. I had no interest in VC when I graduated. I would not have succeeded. For me, I went out and did other things. I worked on Wall Street and at McKinsey, in senior management roles, in operating and non-financial roles. It all made me a better VC. It makes it easier to relate to our portfolio leadership teams and contribute to their success.

CoveyClub: What do you think of the studies that say that when pitching, women get more questions about avoiding loss, while more men get questions about expanding revenue?

Edith Dorsen: I’m sure there are many VCs who don’t give to entrepreneurs who look or sound different — female, ethnic, older — who don’t fit their profile of what is successful. It is a privileged little bastion of small groups that are unscrutinized and unregulated. Private clubs, almost. They have functioned like that and continue to do so.

How do you respond when it happens? Turn it around, be agile. Don’t be hostile. Respond in a way that is selling, promoting, advocating. Get there by practicing a lot. It’s just like a job interview, but more important. The more you practice the better you get. After each time you pitch, evaluate what went well and what didn’t so that becomes a basis for improvement. That’s what I learned from Wall Street. When we came out of a big meeting, we always had a post-mortem on what worked and what didn’t.

CoveyClub: What do you say about women using more commanding presentation styles? I’ve actually heard a story about one woman thinking that by throwing her books down on the table with a loud noise started the discussion off right?

Edith Dorsen: I would never do that. It wouldn’t be well-received among the investors I pitch to. Yes, you have to project confidence. To know your subject matter, and project self-awareness and humility. At Women’s Venture Capital Fund, that’s what we look for in the entrepreneurs we fund. There’s a wonderful book called The Confidence Code by Claire Shipman. They did a lot of research. They found there was a gap in perception that women have faced. [It has to do with] overzealousness for reaching perfection. We beat ourselves up for being imperfect. Men stand three feet from the mirror, think they look terrific and pat themselves on the back. Women stand three inches away and tear themselves apart.

If I could wave a magic wand and change one thing for young and mid-career women, it would be that. I plead totally guilty to that for a long time. Only when I got into venture capitalism I realized that perfection did not exist.

CoveyClub: Should women founders look for VCs who are female?

Edith Dorsen: No. Any founder needs diverse sources of capital. For any one round of financing, you want multiple VCs to participate. I would explore and approach VC funds where there are women. But it’s more important that the fund fits your criteria. It gets me annoyed when we get approached and there’s no fit with the entrepreneur. They haven’t done their homework.

Also, there’s not enough of us. So if you limit yourself to female VCs,  you’re limiting your prospects.

CoveyClub: What do you see are the differences in what men and women invest in? Why are there those differences?

Edith Dorsen: Products and services geared to families and children have been a hard place for men to appreciate the sizable market opportunities. But [there are two companies in our portfolio], HopSkipDrive, which is ride sharing for children, and Riveter, for professional women, are both high-growth, early stage opportunities that male VCs did embrace. Maybe they wouldn’t have done it years ago, but it’s a sign of more progress.

CoveyClub: How long do you think it will be before we get to true financial equality?

Edith Dorsen: It will be a long time. [But I also] think that’s not a fair question. I don’t believe women are responsible today for 50% of start-up companies. The majority of small businesses are run by women either exclusively or with male partners.

We have made some discernible progress on the angel investing side. Companies that are further along, that have scaled, and are cash-flow positive: There are stunning examples of female success in that arena. By the time you’ve demonstrated that level of success, gender issues fall by the wayside. It’s more in the middle area where funders have to take a leap of faith, in series A and B. That’s where we have to apply our efforts. It will take a while, but there’s been more talk in the last couple of years. I hope capital will flow.