Investor Spotlight: Meet Jennifer Fonstad and Theresia Gouw

By Sallie Krawcheck

These days, you can’t talk about Silicon Valley without talking about culture. Specifically, how Silicon Valley culture can fall short when it comes to helping women thrive.

Creating and maintaining a healthy culture is very important to Jennifer Fonstad and Theresia Gouw, the founders of Silicon-Valley based venture capital firm Aspect Ventures. The Ellevest backers are passionate about startups — having each spent more than a decade in the VC world before launching Aspect — and have seen firsthand the need to make tech truly inclusive for all types of people.

I sat down with Jennifer and Theresia in San Francisco to talk about confronting unconscious bias and addressing imbalances, what entrepreneurs should pay attention to while building their businesses, and why Ellevest’s commitment to helping women invest piqued their interest.

Meet Jennifer and Theresia:

To say that life for women in Silicon Valley can be tough these days really feels like an understatement. It seems like every week we’re reading about some other gender issue. What advice do the two of you, who’ve been so successful in Silicon Valley, have for women in the field?

Theresia Gouw: I'd start with it's still worth it, so still go for it. By that, I mean two things. One is on the positive side of why it's still worth it: If you look at the five largest market-cap companies in the United States, they're all five Silicon Valley tech-backed venture firms.

So, the idea that the fastest-growing, largest part of the economy — which, by the way, contributes more than three-quarters of the R&D dollars into the economy — is not taking advantage of the full diversity and the full gender of the country seems crazy to me. This is why I say, yes, unfortunately, there have been some truly horrific stories out there. But the bigger picture, the longer term shows that it’s worth the investment on both sides to make it happen.

Culture is such a critical aspect of any successful company.

And lastly, I would say...I'm a make-lemonade-out-of-lemons kind of person. I'm encouraged by the fact that these stories are so large, and so in everybody's mind, that finally male and female leaders, from Melinda and Bill Gates to Reid Hoffman, are speaking out about why [gender diversity] is critical. If we really want to continue the pace of growth and be a leader in tech and in the global space, we need to figure out how to fix our culture and make it more inclusive for all of our talented citizens.

Jennifer Fonstad: So there's a couple of things I'd add. One is that I think Theresia hit it with this notion of culture. Culture is such a critical aspect of any successful company. Whether it's gender diversity or age diversity or ethnic diversity or even introvert-versus-extrovert type of diversity, having a culture and an environment that really pulls out the best in people and really enables them to perform at their peak and want to perform at their peak is really what drives these companies to be successful and to grow. And so that's the type of environment that any entrepreneur — male or female — would want to create in their own company in order to drive that kind of success.

So, it sounds like do it and be cognizant of the culture of the company that you're joining or the culture of the company that you're forming.

JF: That you're building.


JF: And people don't pay a lot of attention to culture building. One of the interesting aspects we try to bring into our entrepreneurs early on is to think about “How does culture play in your company from day one?”

Because you're building that in terms of how people interact around the water cooler, how they talk to each other and treat each other in meetings, how they share and communicate on a daily basis, what that platform is, how comfortable that is. All that starts from day one.

Is that something you talk to your entrepreneurs about?

JF: Absolutely.

TG: Absolutely. People talk about how the war for talent, and hiring, attracting, and retaining the best and brightest is what will ultimately determine company success. At the heart of that is what's the work environment, what's the culture you're creating, is it a place where you wanna work, does that become a competitive advantage, or in the case of an Uber, for many years, is that a competitive liability?

I think when people talk about culture a lot of times they write it off as like well, it's a nice thing to have. Well, no. As investors, as people who have had many long careers investing in startups and making money, those are the kinds of things that make a difference. Because if you can attract great talent to your company and keep them there better than the guy down the street or the gal down the street, that gives you a huge competitive advantage because these are all people-driven intellectual property businesses.

How do you think we can get more women in the C-Suite boardroom venture capital firms, get more funding for women in Silicon Valley?

JF: There's a couple of pieces to that: It's a combination of women and men taking leaps, and it's taking leaps that may not seem obvious in the beginning. I think we talked about a story we saw at Harvard Business School where women were not getting to become bigger scholars and top honors as quickly as men were on a percentage basis. And the dean of the school was trying to figure out was that because women weren't smart enough and capable enough, or could there be another reason?

If you see an imbalance — whether that's gender or other type of diversity that you want to seek more of — don't take it as a given.

So, [they] started to experiment and test different scenarios, including putting a scribe in the classroom because a big part of your grade at Harvard Business School is based on your common decision-making class. In fact, 50% of your grade is on participation. By putting a scribe in there, he found that both male and female professors had been inappropriately ascribing comments to male colleagues more frequently than with women in the classroom.

By adjusting for that...they were able to capture the actual comments and the actual insights that students were bringing to the table, which would affect their participation grade. They found that, lo and behold, women rose to the top of the class in terms of their participation percentage relative to men.

What I think is fantastic about that example is it was really the dean who thought through, “Well I don't know what the problem is, but I know that this is not right.”

...I think if you really want to drive change in Silicon Valley particularly, where you are starting from a deficit, you have to actually be creative, take experiments, and you have to constantly be iterating and monitoring and analyzing these results.

TG: I love that story for two reasons. One like Jennifer said, look, we're in Silicon Valley. Supposedly everything is very data-driven and the process that the dean at HBS took is essentially like the iterative product design process that we use in our startup companies, right? You have a hypothesis, you test out a few different features, you separate people out into cohorts, and then you measure the heck out of it ,and you change it all the time until you identify what it is.

If you don't measure it, you don't know.


TG: What that says in terms of companies and startups, is if you see an imbalance — whether that's gender or other type of diversity that you want to seek more of — don't take it as a given. Why don't you hypothesize at what might be the things in product management be, what might be the features in our on-boarding process that we would want to change so that we don't have such a leaky pipeline and test those things out? Don't put it on the other.

When we have a cohort of people who don't perform as well as another cohort in our customer sets, we don't say well, we don't want those customers. No. We say, “No, no, we want those customers to perform as well as the other customers.”...Why don't we take that same view towards our talent? These are our teammates — this is what matters, right?

So, I think another piece of that [Harvard Business School] story talks is everyone needs to understand that we have unconscious bias. Both the male and female professors were unconsciously attributing [fewer] comments to female students...That's the world we live in, but what can we do to measure it and improve it?

Why did you invest in Ellevest?

TG: The reason we invested in Ellevest, I'd like to say is the reason why we invest in all of the companies that we do: Because we think they are going to be great, huge companies that are going to impact their market.

Number one is [having a] compelling founding team with domain expertise and vision that's different and unique. Second is attacking a huge and growing and, in this case, under-served market even better. And then lastly, either a product or a vision for a product that is going to build on technology that will create scalability and competitive advantage.

JF: I will only add that we think that as part of the market that Theresia was referring to, that this opportunity for women, who are gaining a lot of financial power and are becoming wealthy in their own right, are now learning on how to use that power, learning how to invest appropriately, and use that in the way that can both grow their wealth and their asset base and share that with the rest of the community.

What advice you would give for women who are pitching venture capitalists?

JF: I'd say make sure you're solving a real problem. Make sure you've done the things that Theresia talked about, about building a really strong team. We look very carefully around the team, and not just the person pitching, but the people they've built around them. What we're looking for are not people that all look the same, but people that look different. And not just look different along gender lines, but looking different along their functional experience, their background, [and] their perspective so that you have a very strong team.

Getting back to that point about solving a real problem, oftentimes people focus on building an interesting product or an interesting feature. The question is what problem are they solving with that? How is that really going to change the market or change their perspective of the markets that you really are coming into a large marketplace in a way that you're driving change? We're thinking about products in that way as well. It's no different for women or for men in that sense, and the only [action] that I would encourage for women is to be willing to take more risks.

I agree with that. Anything to add?

TG: This is the same whether it's men or women, as the founders, you want to look at people who have different skill sets and complement one another... Even if you're the most talented point guard in the world, you don't want to have Steph Curry and Russell Westbrook and James Harden on the same team. You’ve got to find people who have different skill sets because...

I use the point guard example.

TG: There you go.

The one piece of advice that I would give to women in particular...women are really good at coming in and having their homework done and being very prepared and understanding the details and the potential downside scenarios. That's great, and you need to know how to do that, but don't forget we're investing in you because you have the right team and you have the right 10-plus-year vision.

So, don't forget to paint the long-term vision. Be honest and practical of where your business is today, but paint us the picture of why we're going to invest in you because we invest for 10, 15, 20 years. Why are you going to be a huge company? Don't forget to share that big vision.

This interview has been edited and condensed for clarity.


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Sallie Krawcheck

Sallie Krawcheck is the Founder & CEO of Ellevest.