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Female Executives Explain Why Diversity in Venture Funding Matters

Early in Peggy Johnson’s engineering career, the Microsoft executive thought about giving it all up.

“Many times I thought, ‘I have to leave this profession’,” Johnson, now executive vice president of business development at Microsoft, told a packed room of women Tuesday at Fortune’s Most Powerful Women Next Gen summit in Laguna Niguel, Calif. “I’m never going to be that.”

“That” was being an aggressive, opinionated outgoing leader—and a man. Johnson was not only a woman in a male-dominated profession, but a self-described introvert.

“Every year at my performance review, it was the same thing: ‘You don’t speak up enough, we don’t hear from you enough,’” Johnson said, adding that no one ever looked like her at meetings. “I was even told that this is a boys’ club and I needed to join that.”

But Johnson had other strengths: she was collaborative and built good teams. And, eventually, she found a boss who recognized and cultivated those skills. Now, she’s paying it forward.

In fact, she now manages Microsoft’s relationship with the venture capital community and has partnered with Backstage Capital’s Arlan Hamilton in starting the Backstage Accelerator, which invests in female, LGBT, and person of color founders. These founders are not only given $100,000 in capital, in exchange for 5% equity, but they are also provided a mentorship network to help them achieve their goals.

Because when it comes to venture funding, women (who receive 2% of VC dollars) have long been overlooked and underestimated, especially women of color, who Hamilton says receive only .2%.

Johnson and Hamilton, who have both been the only woman at the table during their careers, are now using their own past experiences to shift this imbalance and encourage other women to do the same, especially in the VC world.

“I don’t have a straightforward answer when it comes to how to get people to take us seriously,” Hamilton, founder and managing partner of Backstage Capital said, comparing diversifying efforts to creating a new sorority. “It wasn’t there before, so we’re trying to help build it.”

And the best way to build it, according to Hamilton, is to make sure you show up at the table, keep moving forward, and invest in other women and underrepresented groups.

“Share your privilege,” Hamilton said. “Everyone we know has a privilege, if we all work together and share that, things can definitely change for the better.”

At Microsoft, Johnson did just that and set out to build a diverse team.

“When you look at a lot of VCs the teams aren’t that diverse,” she said. “It helps when you come in to pitch to see someone like you on the other side of the table.”

Hamilton used Microsoft as an example of how efforts to diversify, like its partnership with Backstage Capital, are good for business.

“If you’ve been paying attention to the news, Microsoft is doing really well right now,” Hamilton said. “If that’s not a case study, then I don’t know what is.”