For most of my life, I’ve felt like an outsider. Whether it was being raised by immigrant parents who didn’t understand Western social norms, or my years as an awkward kid picked last for everything, or being one of the few women Chief Intellectual Property Counsels in the niche-y field of patent law, I’ve always been most comfortable working quietly in the background.
When you’re an outsider, you spend a lot of time observing. I’m often told I think outside the box, to which I silently respond it’s because I’m not enough of an insider to even know what the confines of the box are. And when you’re an outsider, you sometimes don’t even realize you have skills that would be useful to others.
Here’s an example. In 2008 I helped launch a venture-backed company we took from $0 to $100M and IPO in three years — but I was such an outsider to venture that I didn’t realize this was unusual. There were the inevitable and valuable lessons learned during that period, and we ultimately grew the company to $300M.
After we sold the company ten years later, I started to spend more time with founders and VCs, mostly as part of the SaaStr community, which I’d been involved in from the early days (I’m married to the founder). And of course, I spent a lot of time where I’m most comfortable — quietly observing. Here’s what I saw:
- The venture world revolves around VCs and founders.
- Roughly 90% of VCs and founders are white males, higher when you look at enterprise.
- VCs and founders tend to hang out with other VCs and founders, and their networks don’t overlap much with operators, much less with women operators.
- Most b2b startups eventually want to sell their products to enterprise.
- The majority of VCs and founders have either never worked in enterprise, or haven’t done so in decades.
As I began to dip my toe in angel investing, I noticed something else: I was often the only woman on the cap table, and homogeneous groups were showing up again and again. I was bothered enough to ask a few founders if they’d noticed. These founders, to their credit, were horrified, and then even more distressed when they realized they hadn’t recognized it prior to my asking the question. They explained that they’d simply gone to their buddies for backing — they didn’t know any women who might invest and could I please help.
The Buddy Syndrome strikes again
The fact is, they weren’t wrong. When you’re in the early days of starting a company, you turn to people you know — the ones who trust you and are willing to take a chance. And people from your network tend to be people like you. (I call this the buddy syndrome.)
And beyond this, it’s a fact that fewer women invest. Women hold 71% of their assets in cash. They make up just 9% of venture decision makers and 22% of angel investors. And if you focus only on my area — enterprise — the numbers drop even more.
At the same time, I began asking my women friends: “Why don’t you angel invest?” Never been asked. Never had the opportunity. Didn’t occur to me that it was a possibility. No time to vet — and not sure I know how to vet anyway.
Why aren’t more women investing?
I heard this over and over — and from some of the most accomplished operators in the world, many of whom happened to be women… leaders who’d built the most successful tech companies in the world. In fact, many of today’s most respected operators are women.
Earlier this year one of our LPs, Reshma Saujani, Founder & CEO of Girls Who Code, released her book Brave, Not Perfect; this is based on the idea that from a young age, boys are praised when they take risks, while girls are expected to be perfect and steer clear of taking chances. Saujani’s experience is in the world of coding, but the translation to enterprise is clear: Women today are conditioned to be perfect — at work, at home, and frankly in everything we do. As a result, we give 150% to our day jobs and 150% to our family and friends. We’re not looking to meet VCs and founders in the little time we have left over. Sprinkle in the gender pay equity gap and “gap table,” and the result is that most women don’t have the liquidity, much less the desire, to invest in people they don’t know and in startups they don’t have the time to vet. Yet they’re the very people with the backgrounds the venture world could use. So these women — these ultra talented operators — were also outsiders with no obvious path to get in.
On the flip side, there’s venture. Now the value of diversity has been well established, yet venture remains homogeneous — not because no one wants the change, but because there hasn’t been a natural way for it to happen (birds of a feather, and all that). So what we wanted to do was help both sides of the equation: Give talented operators from diverse backgrounds a safe, comfortable way to join venture + make it easy for founders and VCs to bring in new experience and perspectives.
The origin of Operator Collective
The idea took hold quickly. Operators were thrilled at the idea (just look at the absurd amount of talent we’ve assembled), and they quickly referred their fellow operators. Even universities and foundations signed on as LPs, a rarity for a first-time fund. And of course as we operators have been trained to do, we built this fund to have immediate product-market fit to address that gaping lack of operational expertise in venture.
So here we go. The sidelines are bursting, and the outsiders are coming in.
Say hello to Operator Collective.