Nancy Hong, PhD (BS ‘92), Ann Johnson, MS (BS ‘99, MS ‘00), and JJ Kang, PhD (PhD ‘15), faced a moment when they knew working in startup and venture capital (VC) spaces would be different for them. Kang, a venture partner at The Column Group and chief executive officer (CEO) of Appia Bio, was often the only woman at meetings. As the cofounder and founding CEO of Interana, Johnson had to pitch to potential funders who were more interested in talking to her husband and cofounder Robert Johnson, BS (BS ‘98), than to her. Hong, who is managing director at RiverVest Venture Partners, heard for 20 years how equity was within reach. Yet, year after year, she saw talented and ambitious women leave their life science VC careers.
Their experiences are part of a larger gender imbalance in entrepreneurship and venture capital. Although female founders had a breakout year in 2021, discrepancies persist on who gets funded and who writes the checks, according to a report from Pitchbook, a company that provides private market data. Despite these odds, Hong, Johnson, and Kang have thrived in their careers. In this edited discussion, they offer their thoughts on the current state of their industry and why both women and men should be optimistic about the future.
“The bigger New York VC firms wanted to go get cigars and talk about the deal with me. I mean, seriously. The established software industry still closes multimillion- dollar sales through a round of golf. What are ways you would increase access?”
Ann Johnson, MS (BS ‘99, MS ‘00)
Techer: Studies show women-founded startups generate more revenue and provide a higher rate of return for investors. Why is it still so hard to get funding?
NH: Probably on average, women CEOs are overqualified, have more hustle, and have more soft skills because they have to meet a higher bar to be venture-backed. That could explain why they generate better returns. From the VC perspective, there needs to be more women in the funding seats as well. I am super thrilled to have backed three female CEOs, and it’s probably not an accident, right? I think female CEOs should target female VCs.
AJ: I certainly would have gone to a female VC if that had been an option in our field. The funding process we went through in 2014 turned my husband into a huge feminist because we would go into meetings and VCs would ignore me, the CEO, and talk directly to him, the chief technology officer, even about sales numbers and hiring practices.
JK: There is a mentorship-apprenticeship model that also needs to be considered. You have to go through a lot of challenges and failures when you are starting out and you need a support network to help you bounce back and keep pushing. Pretty much all of my mentors, and I have had great ones, have been men. I think it is about providing those networks to women and a new generation of founders.
Techer: What do you wish more women founders knew about the pitching process?
NH: There is a softer, more emotional component to getting a deal done. Male and female founders do not appreciate the human side. Yes, it is a financial transaction, but it is really a relationship-building exercise. The majority of CEOs that I take pitches from tend to go on autopilot and it becomes a data presentation. It should be about building a conversation, making sure the audience is engaged, and eliciting questions so that there’s some back and forth. These needed skills play into women’s strengths.
AJ: When I was starting, there was this idea that the VC is a super-smart person who has this infinite amount of money and that they are going to decide whether you are worthy enough to get funded. In reality, they have made promises to their backers that they would fund a very particular type of company. Those companies must fit a very particular profile, and it can feel like rejection even if it is only a fit problem. Also, as a new technology, there is always the hope that they will truly understand the intricacies of your technology. However, as the Theranos [a defunct startup whose founder, Elizabeth Holmes, was convicted of fraud] debacle highlights, what funders really want to do is leave the intricacies to you. They often determine how much to trust your technical instincts by how much confidence you project, which is the opposite of how it works at Caltech.
JK: If you are engaging with VCs, you need to clean up the narrative of your value proposition. Understand the critical parameters of the problem you are trying to solve and clearly articulate how your efforts will directly address it.
“There has been a well-intentioned but a little bit misguided focus on training women to be CEOs and board members. The focus should be much more on access and less on thinking women need this special finishing class.”
Nancy Hong, PhD (BS ‘92)
Techer: The #MeToo movement has been one of the most catalyzing moments of our times. It also brought to light the lack of leadership and representation for women across a variety of fields. What progress have you noticed?
JK: There are more deals done now that include women, especially those from a younger generation. Over the next decade or so, these folks will make it to the partner level and push more ideas of equality and opportunity forward. The current lack of representation reflects the tail end of a leaky pipeline, but I think there is positive evolution underway for the future.
Techer: Have there been any missed opportunities?
NH: There has been a well-intentioned but a little bit misguided focus on training women to be CEOs and board members. The focus should be much more on access and less on thinking women need this special finishing class. Access versus training is a subtle distinction but it is an important one.
AJ: The bigger New York VC firms wanted to go get cigars and talk about the deal with me. I mean, seriously. The established software industry still closes multimillion-dollar sales through a round of golf. What are ways you would increase access?
NH: It is having more limited partners [who are part owners of their VC firms] saying, “Hey, we want your investment team and your portfolio to reflect a healthy diversity.” There are a lot of modern guys and gals who don’t want to discriminate based on gender, they just want the best minds working on these really hard problems. It is actually a double win—people who are doing the right thing are also doing well.
JK: I do not think it is just the younger generation being better at it. There are more established folks who are becoming more aware of it, and it is tremendously helpful when they take action. I think VCs are well-positioned to create access and opportunity by identifying some great rising stars at some of their portfolio companies and nominating them for board positions or making sure they are considered in searches for executive positions. As Nancy said, access to an opportunity is more meaningful than taking another class.
Techer: Is there anything we are not doing now that needs to be done?
JK: As leaders in our respective fields, it is our role to help other folks work through that. Our company really makes it a point to encourage paternity leave. You just have to believe that doing it will help change expectations. Each of us, as individuals, is doing what we can but I also think policy changes can help. California is requiring that boards of public companies have more diversity and everyone is having to react to that. And that moves the needle. Everything is on the table for getting to change.
NH: That is a good point, JJ. Scientists do not really like to think about politics. Maybe this is an opportunity for the technical space to build a bridge to policymakers. Maybe we should expand our mandate even more by talking to politicians.
AJ: Here’s another idea: My kids are in high school and gender fluidity is really strong in their generation. And I love it. Maybe let’s just make it not so binary. Let’s all mush it up and start over.
How Advances in Edtech Can Help Ensure Educational Equity
In 2007, supported by the Caltech Alumni Association, Bob Kieckhefer, BS (BS ’74) and Ponzy Lu, PhD (BS ’64) collaborated to give the current students a landmark that would maintain its place on the Caltech campus forever in stone.