By Ellen McGirt
Updated: January 23, 2018 2:53 PM ET

Grit week continues with this extraordinary piece from my Fortune colleague, Michal Lev-Ram, How Investors Like Melinda Gates Are Helping These VCs Tackle Tech’s Bro Problem.

The story begins with a well-deserved victory lap for Theresia Gouw and Jennifer Fonstad, the savvy co-founders of Aspect Ventures. The two serial entrepreneur/investors didn’t set out to start a women-focused venture firm when they opened their doors in 2014, but they did intend to build on an idea that was barely a bumper sticker phrase back then: “If you have more diversity you have better financial performance,” says Gouw. Their company is 50% women.

But wait, there’s more:

Overall, women founders receive less than 3% of total VC dollars (women of color, meanwhile, get a meager 0.2%), but Aspect’s portfolio looks strikingly different from the norm: About 40% of the firm’s companies were founded by women, and 30% were started by minorities. Once, those numbers might have been a mere curiosity—today they are becoming a competitive advantage. While investing for diversity is something certain industry players have been pushing for a long time, the message is finally beginning to be received by the deep-pocketed individuals and institutions that fund the Silicon Valley ecosystem. Why? Ignoring it can be expensive.

Over the course of their careers, explains Lev-Ram, Gouw and Fonstad’s investments have resulted in a collective seven public offerings, 26 acquisitions, and more than 500 financing rounds in follow-on capital. Next up for Aspect is a new investment fund, and Melinda Gates has signed on as a limited partner. “In many ways, the venture and startup ecosystem is still a boys’ club—one that all too often excludes, disadvantages, and mistreats talented women who want to contribute to it,” she told Fortune.

Along with Aspect portfolio firms, some atypical companies have excelled in spite of tech’s dominant bro culture, outliers which now offer signposts for a more prosperous and inclusive future. Here’s one example: The Austin-based WP Engine, a full-service platform for WordPress users.

I had a chance to catch up with CEO Heather Brunner recently, to talk about her own funding milestone– the company, which now boasts an annual $100 million in revenue just completed a $250 million investment round from Silver Lake Partners. “This will really give us a chance to expand into new markets,” she told Fortune.

A tech-industry veteran, Brunner has been a force for inclusive thinking since she took the helm as CEO in 2013. She’s a participant in Fortune’s CEO Initiative, working collaboratively with other executives to better help business address pressing social issues, and made sure WP Engine was among the first companies to sign on to the Obama Administration’s Equal Pay Pledge.

And here’s the extra-gritty part: She’s learned to think about talent differently than most tech companies executives.

WP Engine employees are 55% women and, in an unusual move, 35% of employees don’t have a college degree. (Also unusual: Past scrapes with the law aren’t necessarily a barrier to employment.)

“When we decided that we were open to people without a college degree, it was game-changing for us,” says Brunner.

Instead, they reach out to a wider universe including existing WordPress users, a naturally diverse lot. Many, hold down multiple jobs, and work on the side developing websites for other people. Others only build for themselves, showcasing blogs, selling their handiwork, talking about games, whatever. None of them fit a particular profile. While they start in customer support roles, there are clear pathways to move into more complex roles in support, sales, and engineering. “A quarter of our employees got a promotion in 2017,” says Brunner.

Brunner says all the right things about the business case for inclusion, but she’s earned the right to make a philosophical one as well. “We want to inspire others by focusing on culture,” she says. “We believe that you can get outsize business results by being good and doing good.”


You May Like