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Hot New Trend: Women Led Startups Are Attractive to Investors

More companies are pushing to see more diversity in the board rooms. Businesses that don't have a single female board member in some cases are being fined. But why does it all matter?

Since Silicon Valley brought attention to the importance of Angel Investors in particular fields of industry, particularly in computer and tech development, the world has been aware that venture capitalists are much less likely to fund pitches from women than from men. Studies have even shown that when men and women deliver the exact same pitch, they get less funding from VC companies.

Because of this, women entrepreneurs have become adept at seeking out other ways to get their companies off the ground. They may bootstrap things, pull in investments from friends and family, pursue alternative funding, or look at crowdfunding their businesses. Women actually have a marked advantage over men when it comes to crowdfunding.

More companies, however, are pushing to see more diversity in the board rooms; in some cases, businesses that don’t have a single female board member are being fined. But why does it all matter? Why should VC firms care if companies have women involved or not?

Diversity Matters

From a very simple point of view, it is important to be aware that certain areas of our world tend to reflect a much more monochrome and single gendered understanding of how the world looks than the actual world in question. The majority of business is white and male, yet studies show over and over that more diversity in the boardroom creates a more viable and flexible business.

This is not just about including women in decision making roles, though that does help. Including people of color, veterans, disabled people, LGBT folk, and more help to create the kind of varied perspectives that allow companies to react quickly to the changing and distruptive world of business.

But from a human perspective, it’s simply the right thing to do. Science has long since disproven the notion that white men are somehow inherently better at business related tasks than marginalized people; it’s time for the business world at large to catch up.

Reduces Sexual Harassment Liabilities

Women leaders absolutely do not prevent sexual harassment, and they also are not immune from sexual harassment, but having women in decision making roles throughout a company can certainly help to create a culture where sexual harassment is less likely to be tolerated.

Since sexual harassment and assault are issues that American society is currently entangled with to an intense degree, having provisions and people in place to try and protect the company overall from accusations – or actual damage – is simply a smart move.

And, again, it is the right thing to do from a human perspective. Sexual harassment and assault can leave emotional and physical scars that last for the rest of someone’s life. Protecting a person from that sort of injury should be in every company’s best interest.

Better Visuals For The Company

Even twenty years ago, company boards were invisible. Unless you were involved in the high power world where board members operated, you were unlikely to be aware of what exactly was going on inside a boardroom.

That is no longer true. The spread of the internet and the proliferation of social media means that board members are visible – and companies which only have white men on their boards are likely to face more scrutiny from the public at large. Having marginalized people on the board – women, people of color, disabled people, and so forth – means that a company will be perceived from the get-go as being more interested in representing the world at large.

Simply More Likely To Succeed

And even if none of the human rights reasons are enough to convince you that having a significant percentage of women on a company’s board is important, here’s one more: businesses that have marginalized board members are simply more likely to succeed. They are more likely to be cautious when caution is warranted, and risks they take are more likely to pan out.

They are more likely to have well rounded business plans that embrace many different perspectives and possibilities. They are more likely to avoid some of the most common problems to occur in creating marketing plans.

Because women have been ignored and shut out of the business world for so long, they are by definition bringing fresh ideas into the marketplace. The business world is currently in a state of disruption in many different ways. Having partners who can see new ways of doing things and bring fresh, revolutionary ideas into areas of business that have yet to find a new way of being.

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