Women investors and venture capitalists have had to fight for a seat at the table. They were told not to “bother their heads” about money and most had little to no control over the family finances. But, determined women investors and venture capitalists were not deterred. They forged ahead, even if it meant disguising their true identities or “disobeying” societal norms.
In honor of Women’s History Month, we’re using this week to focus on women who broke barriers in the investment world, paving the way for the growing number of women investors and venture capitalists in the world today.
Women Investors and Venture Capitalists: What The Stats Say
A recently updated Motley Fool report gives sobering statistics about women and investing.
- Only 33% of women see themselves as investors.
- Women lack investing confidence: only 9% believe they make better investments than men.
- Only 52% of women say they feel confident managing their investments, compared to 68% of men.
Let’s dive in and look at those who did have confidence.
We can’t talk about women investors and venture capitalists without starting with Abigail Adams. She was the first female investor in America. Abigail Adams was the wife of President John Adams, but she was also a trusted confidante. He gave her complete control of the family finances, entrusting her to make the best investment decisions. So, being bold and daring, Abigail Adams invested in government and war bonds, securities that most other investors stayed away from. It proved to be an excellent choice, as she succeeded in quadrupling her initial investment.
Investment Advice From The Grave
As they say, “sometimes you just gotta do what you gotta do.”
It would be roughly 100 years before women could once again knock on those doors of the investment community. Victoria Woodhull and her sister Tennessee Claflin found a way to get around the barriers by tapping into the “skills” of their faith-healing parents. The parents advertised themselves as mediums who could communicate with the dead. So when railroad magnate Cornelius Vanderbilt sought the sisters’ advice, they arranged a séance. Then, using the cover of the séance, Woodhull gave Vanderbilt investment advice. It turned out to be excellent advice, so much so that Vanderbilt helped the sisters set up the first woman-owned brokerage firm in America.
Woodhull, Claflin & Co served women investors looking for expert advice on how to increase their wealth. The financial establishment at the time predicted a total failure and collapse of the new Woodhull investment house, but they were proved wrong. The firm’s clientele consisted of society women, small business owners, widows, actresses, and women in the “oldest profession,” all of whom had money to invest. In the first six weeks, the investment house made $700,000.
Among the stories of women investors and venture capitalists, my favorite is that of Geraldine Weiss.
Geraldine Weiss had a college degree in business and finance, but that didn’t open any doors for her at the investment houses. Finally, in 1966, at the age of 40, after facing multiple rejections, Weiss launched an investment newsletter, signing off as “G. Weiss.”
Weiss’ investment advice, published in her much sought-after newsletters, became hugely popular. Her stock selection strategies outperformed those recommended by rival publications. But, it was not until 1977, when Weiss appeared on television, that people learned she was a woman!
Weiss ultimately earned the nickname “Grande Dame of Dividends” and published her newsletter, Investment Quality Trends, for 36 years.
Viola Turner began her journey as an investor in 1920 when she became employed by North Carolina Mutual Insurance company as a cashier clerk. Mutual Insurance was located on what was known as “Black Wall Street” because the street was home to many Black-owned financial institutions. Viola eventually became personal secretary to Charles C. Spalding, one of the company’s co-founders.
Viola proved her financial abilities, slowly moving up the corporate ladder to become manager of the company’s investment portfolio. Her first move was to shift the company’s investments from mortgages and government bonds to stocks. It was a risky move, but Viola was careful to research each investment option thoroughly and cultivate key contacts with others in the investment community.
Her male colleagues didn’t express much respect for Viola, referring to her investments as “her little project.” However, that little project turned out to be big news for the company’s investment portfolio. In 1957, she became the company’s first female executive.
Serving as president of the New York Mercantile Exchange made Rosemary McFadden the first woman to serve as president of any US-based stock or futures exchange.
McFadden received an MBA from Rutgers and her law degree from Seton Hall. She began her tenure at NYMEX as a staff attorney, climbing ultimately to the position of President and COO in 1984. Not only did McFadden become the first woman president of any U.S. stock exchange, but she was appointed to head the largest energy futures exchange in the world. In heralding her appointment, the New York Times wrote, “In Powerful New Job. She Overcomes the Skeptics.”
Deborah Farrington is co-founder and managing partner of StarVest Partners, a venture capital firm launched in 1998. It is one of the largest women-majority-owned venture capital firms in the U.S.
Farrington’s interest in the world of investors and venture capitalists was sparked by her father, who worked at Lehman Brothers. Still, in the 1960s, not many girls had “become a venture capitalist” on their bucket list.
Farrington says that she visited the New York Stock Exchange when she was ten. While finding it exciting, she noticed the absence of women. She received her MBA at Harvard Business School in 1967 and launched StarVest Partners in 1998.
When Farrington launched StarVest Partners, she joined a small group of women running their own venture capital firms. Farrington is also one of the pioneers of venture capital investment in one of the hottest tech stocks today, SaaS (software-as-a-service).
Suzanne Shank is the co-founder of Siebert Cisneros Shank & Co, the first minority or woman-owned business enterprise listed as a top 10 U.S. municipal bond underwriter. Shank merged her firm with Williams Capital Group in 2019, changing the company’s name to Siebert Williams Shank & Co.
Shank received her B.S. degree in civil engineering from Georgia Institute of Technology and then went on to earn her MBA in finance at Wharton. Launching her own investment company wasn’t something Shank envisioned doing. Still, after being approached by Muriel Siebert, the first woman to own a seat on the New York Stock Exchange, and Napoleon Brandford, Shank founded Siebert Brandford Shank & Co in 1996.
Suzanne Shank has received numerous awards and honors, including being named one of the 50 Most Influential Black Women in Business by Black Enterprise and Top 25 Women in Finance by US Banker.
Probably one of the best-known women working to close the gap for women investors and venture capitalists is Sallie Krawcheck.
Krawcheck earned her undergraduate degree in political science and journalism from the University of North Carolina in 1987 and her MBA from Columbia University in 1992. She began her career at Salomon Brothers in the late 1980s, just before the market crash. Krawcheck then became CEO of Sanford Bernstein and later was named CFO of CITI before moving to Bank of America Merrill Lynch.
“Uncertainty is even more stressful than the certainty of pain. Get clear on where you stand financially, and make that plan. That’s financial self-care.” Sallie Krawcheck
Krawcheck founded Ellevest, a for-women-by-women robo-advisor. Additionally, she’s also the Chair of the Pax Ellevate Global Woman’s Index Fund, which invests in the leading companies in the world with a record of advancing women.
Sallie Krawcheck has held numerous prestigious roles, including president of the Global Wealth & Investment Division of Bank of America and CEO of Merrill Lynch. Her mission is to place more money into the hands of women, something she accomplishes through education, outreach, and advocacy.
While the world of investors and venture capitalists has evolved to become more favorable to women, the playing field is still not level. And this is despite studies showing the accomplishments of women-led funds.
For instance, a KPGM study found that hedge funds led by female managers generated higher returns than the average return of hedge funds across strategies from 2007 to 2015.
A Goldman Sachs study found that 48% of women-led hedge funds beat the market between the pandemic low in March 2020 up to August 2020. Only 37% of male-led funds outperformed the market during that same period. [Inquirer.net March 2022]
Society has advanced considerably since the days when women were denied bank loans unless they had a male co-signer. Hetty Green would definitely be impressed. However, women continue to be significantly underrepresented in the investment and venture capital world. They comprise a small fraction of fund managers, investment analysts, financial advisors, and venture capitalists. The trickle-down impact is that less venture capital funding goes to women and minority-owned startups.
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