The Wealth Equity Hill is Steeper Than We Thought

By Sallie Krawcheck

At Ellevest, we like to say that “money is power.” And of course, we all know the phrase “knowledge is power.” 

So knowledge about money has gotta be a superpower, right? Even if that knowledge is painful? (It’s a concept perhaps best captured by yet another quote, this time from Gloria Steinem: “The truth will set you free. But first it will piss you off.”)

Two articles that pissed me off last week:

One from Bloomberg found that at S&P 500 companies, women executives own a lot less equity than male execs own — to be precise, $1 for every $99 that male leaders own. And that’s despite making up 25% of the leadership overall. 

So, to make sure we're all clear, women execs earn $75 for every $100 that male execs earn, and have just $1 for every $99 of (less-visible, less-talked-about, less-written-about, more generational-wealth-creating) equity. That wealth gap at the top is even worse than it seemed. 

Because of course it is. 

And just to make sure corporate America doesn’t keep all of that inequality for itself:

We also learned last week via Forbes that, in venture capital land, women whose investors are other women are less likely to raise funding after that

Now, I knew about the “Series B cliff,” in which women entrepreneurs are less likely to raise the really big venture capital bucks — named such because funding for women “falls off a cliff” at the later stages. I had assumed it was mostly because there are fewer women venture capitalists.

Fewer women writing the big checks = fewer women entrepreneurs getting funded. Makes sense, right? 

But apparently, this funding cliff is also because of … wait for it … good ol’ gender bias. This study showed that all investors — including women investors — are less likely to say they want to invest in companies run by and funded by women. Even if literally the only difference between the pitch decks is the gender of the founder and the investor, and everything else remains the same. 

Per Forbes, “These investments can lead to assumptions that the female entrepreneur received special treatment because of her gender.” (If by “special treatment” you mean “the same treatment men give other male founders” … then why wouldn’t they?) 

So, damned if you do (get women to fund you, since that makes it harder to raise the next round), and damned if you don’t (get men to fund you, which can be harder — and which often seems to mean lower profitability). 

My solution at Ellevest: Talk about this stuff all the time, so people will become more aware of this implicit bias, and those who want a fairer world will check themselves. It’s what led to our last funding round, in which 70% of our investors were from underrepresented investor groups (including women).

With everything else that’s going on in the world, maybe these aren’t the most pressing issues. But with money and power and knowledge so inextricably linked, they help us know how steep the hill is that we’re climbing. 

But first, they piss us off.

Sallie Krawcheck Signature


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Sallie Krawcheck

Sallie Krawcheck is the Founder & CEO of Ellevest.