Meg Whitman, the former chief executive of Ebay who failed to get elected as California’s governor last November, is not at home tending her backyard. Since then, she has joined the boards of Hewlett-Packard, Procter & Gamble (which she left during her campaign for the Republicans) and Zipcar. Most interestingly, she has joined Kleiner Perkins Caufield & Byers, the Silicon Valley venture capital firm, as a special adviser, helping to evaluate digital investments.
Whitman is one of just a handful of women who have made it to the top of digital enterprises. Her track record in making investments depends on your point of view. Most would applaud the acquisition of PayPal, the online payment service bought by Ebay in 2002, while some would question the commercial value of the company’s subsequent acquisition of Skype, the online calling service, in 2005.
Just 5 per cent of venture capitalists are women, so Whitman’s appointment is a reason to be cheerful. At KPCB, she will join Mary Meeker, a former Morgan Stanley analyst and a formidable intellect most recently focusing on trends in mobile technologies.
Much ink has been spilled (some of it here) exploring why women entrepreneurs attract such a small slice of the venture capital pie – just 3 per cent, to be precise. Most agree that at least one contributing factor is that venture capital is still a bastion of male domination, and business networks remain quite segregated, resulting in women being out of the loop when it comes to start-up finance.
A report published in 2009 by Ernst & Young, the professional services group, titled Scaling Up, concluded that in the US, women were starting businesses “at nearly twice the rate of men – if these women entrepreneurs started with the same capital as men, they would add six million jobs to the economy in five years”.
With more women joining private equity and venture capital houses, one can hope that the experience of Sheryl Sandberg, chief operating officer of Facebook, will become less common. After giving a presentation at a well-known private equity firm, Sandberg’s request for the bathroom was met with blank faces. None of the partners knew where the women’s loos were since the firm’s investment partners were all men, as were the entrepreneurs pitching to them. A secretary had to be called upon.