By Shanthi Marie Blanchard
“This is my story. I had a 20-minute conversation with an angel investor about business. Later that evening when I got back to my hotel room, I got an email (from him). The subject line said, “I like you a lot,” and the email said, “I will not leave Berlin until I have sex with you. Deal?”
Gesche Hass is the founder of Dreamers // Doers. The quote above was extracted from a special CNN interview that profiled female startup founders testifying about their sexual harassment and sexual violence experiences with male investors, advisers and coworkers.
Haas and the women profiled within the CNN expose are just a handful of many female founders coming forward with reports of sexual harassment. Over the past few weeks, many women in this space have emerged from the shadows to make their voices heard. With their words, they have caused cracks into the top infrastructure of the tech zeitgeist. Notably, in reaction to this recent onset of negative media visibility, men as powerful as 500 Startups founder Dave McClure and Binary Capital partner Justin Caldbeck have both recently resigned their positions.
Their vacancy is replaced by a guttural discomfort, succinctly summarized by the low murmurs and nervous conversations emerging in hallways and coffee shops and slack communities. The world, it seems, is somewhat shocked by the revelations of these women’s stories. After all, startup culture is built on an innovative and progressive mindset. Some of the world’s most philanthropically and social conscious minds - including Bill Gates, Mark Zuckerberg, and Elon Musk - all hail from the tech sector. It feels counter-intuitive that the same founders preaching global progress would perpetuate backwards attitudes and criminal behaviors towards the opposite sex. It is even more unnerving to correlate these glamorized innovators, makers, creators, doers, and those funding with the unsettling understanding that they too, could also be molesters and abusers.
It then becomes easy to see why the conversation around sexual harassment in tech is permeating around the shock factor of it all. Yet in this conversation, one incredibly important topic is not being accounted for. That is how sexual harassment severely limits the bottom line of these women’s companies and their ability to grow within the industry.
First, it's important to note that women are killing it as business owners. It is just that simple. According to the American Express 2016 State of Women-Owned Businesses Report, as of 2016, there are 11.3 million businesses owned by women within the United States. Female businesses employ over 9 million people. Female owned businesses generate over 1.6 trillion dollars in revenue. And these gains are only increasing – dramatically. In the past ten years, female owned companies have grown at a rate five times faster than the national average. Just as importantly, those companies are showing huge returns. Female founders also see greater revenue and growth in their companies than their male counterparts.
This presents a problem, because while female business owners and, more specifically, female tech founders are dominating the entrepreneurship game, they are also leaving the tech industry at a 45% higher rate than men due to the toxic bro-culture of the industry. For example, the now infamous expose on Uber’s workplace harassment policies revealed that the retention rate of Susan Fowler department slipped from being 25% female to 6 % female within a year.
“Women were transferring out of the organization and those who couldn’t transfer were quitting or preparing to quit,” she says.
And while audiences and media are rightfully paying attention to the emotional stories and experiences of women, the reality is that sexual harassment is also coming at a huge financial cost to the bottom lines of these women’s businesses, threatening to destroy their careers, companies, and employee’s futures. This becomes especially tricky when navigating the sexual harassment experiences many female founders face. As Susan Ho, co-founder of Journy says in the (CNN) exclusive, “We have a financial responsibility as owners of our business to do what is best for our business. If speaking out is going to harm our business, is that okay?”
The reality is that pointing out, calling out, or reporting inappropriate behavior means female founders are at a real risk of losing potential funding in their companies. Rachel Renock is the CEO of Wethos – an outsourcing platform that’s bringing highly skilled professionals to social impact organizations. Together with her two female partners, they began fundraising this past spring. Renock’s testimonial to the New York Times reveals that,
“…one investor told them that they should marry for money, that he liked it when women fought back because he would always win, and that they needed more attractive photos of themselves in their presentation.”
But for the three young women who had quit their advertising jobs and weren’t sure where their next meal was coming from – let alone the funding for their business – they didn’t say anything. As Renock stated they, “couldn’t imagine a world in which that $500,000 wasn’t on the table anymore.”
In a separate interview with Megyn Kelly on NBC, Renock went on to explain the reality of many founders starting out is that they have to make a choice to either put up with those kinds of relationships, or walk away from their dreams.
“You don’t know how you’re going to pay rent. You are living off ramen. So you’re kind of going to take whatever meeting you can get. And then you become very susceptible to that kind of harassment,” she says.
Even for those more established female founders who have industry recognition or monetary means to stabilize themselves throughout the funding process, retaliating against sexual harassment – even through a simple, blunt dismissal of one man’s advances - can put their economic opportunities and future in the industry at major risk. Another unnamed female entrepreneur on Kelly’s NBC exclusive explained,
“You’re making a choice at this point where you are jeopardizing yourself, where he can go and say whatever he wants about you: her business sucks. She has a bad idea.”
Having a bad reputation in the industry means getting cut off from certain financial opportunities. This is detrimental in a field where gaining financial opportunities through investors is key in getting your business off the ground - and keeping it that way. Cecilia Pagkalinawan found herself in this very situation back in 2001 during the dotcom crash.
“I was faced with raising more money, or letting go of (26) employees.” She explains when describing her encounter with a powerful venture capitalist in New York City who attempted to get her intoxicated, then groped her.
“All of my accomplishments…like, I had already raised five million dollars in venture funding. None of that mattered. I can’t believe that after all these years it still hurts.”
The emotional and psychological symptoms caused by sexual harassment through these encounters can be detrimental both to the health of the founder and their productivity, which can affect the bottom line. Depression, sleep problems, anxiety and PTSD from sexual harassment are all symptoms of survivors who have experienced sexual harassment, all of which can negatively affect female founders performance in the workplace.
Cheryl Yeoh described experiencing intrusive thoughts for around one year after Dave McClure sexually assaulted her. The anxiety she felt doing her job was so overwhelming that she turned down networking events, conferences and considered quitting her job.
The data shows that Yeoh is not alone in her sentiments. In fact, if Yeoh had quit, she would have been part of the norm. With over 60% of women saying they’ve been sexually harassed in Silicon Valley, women are leaving the tech industry in droves. And that is not good for VCs, tech companies, the 9 million women employee, or the 1.6 trillion dollars in revenue women control. Oh yes, and it’s very, very bad for the future of the tech industry.
Your move, bros.
Shanthi Marie Blanchard helps women entrepreneurs build their startups in the New York City and Bay Area as a strategic consultant. As a writer, she focuses on telling women’s stories. Her bylines include Mic.com, Her Agenda, BlogHer, The National Organization for Women (NY Blog) and the London School of Economic’s Engenderings. She is a big fan of pizza, traveling, meeting new people, and someday hopes to write the next prolific, semi-humorous (but not tacky) coming-of-age novel. When she’s not working, Shanthi is running or hosting her podcast on culture and identity in sports - Skin In The Game.