Microsoft’s M12 corporate venture fund is partnering up with the EQT Ventures and SVB Financial Group to launch a Female Founders Competition, where they’ll be handing out $4 million in venture capital to a female-led start-up.
According to the blog post over on the Microsoft website, two winning teams from Europe, North America, and Israel will be selected to receive $2 million each for their start-up.
According to Microsoft’s executive vice president of business development, Peggy Johnson, the reason they’re doing the competition and focusing on females is because Microsoft is aiming to be more diverse. Johnson writes…
“We’ve all heard the long odds facing women founders in tech. Last year, female founders received just 2.2 percent of total global venture capital funding, and only 17 percent of all startups have at least one female founder, despite the fact that gender diversity on executive teams correlates with greater profitability and value creation. […]
“[…] Study after study shows that investing in women founders returns significantly more than the market average.”
The “study” that Johnson links to comes from the site 10years.firstround.com.
Detailed figures of the study aren’t disclosed, but it’s filled with snapshot statistics like the following figure.
If that number seems suspect to you, it’s because they had to do a lot of numerical gymnastics to reach that figure.
At the very bottom of the page their methodology is exposed where they note that they had to do a bit of culling to reach certain percentages for certain figures used in their “study”. As explained in the methodology…
“While we’ve invested in over 300 companies to date, we did not include investments in (1) the 16 companies that we made in the last six months (since their share value wasn’t included in our 2014 financials), (2) the 17 companies that we invested in 2014 that did not raise follow on financing by the end of 2014 (since their share value would not have time to change either up or down) and (3) did not include our investment in Uber (as it would skew all the results – showing that companies with a name that starts with a vowel, for example, perform 100x better than all other investments).”
So how many other companies performed “100x better than all other investments” other than Uber? Was it just Uber? And how many other companies fared better because their name started with a vowel compared to other companies that didn’t start with a vowel?
Even First Round notes that you shouldn’t take their data as representative of the industry given that it’s not statistically sound at all, where they write…
“To be clear – we’re not expecting this analysis to get us an invitation to join the ASA. And we are not claiming that our data is representative of the industry…or even statistically significant. Rather, we believe that the data can provide some interesting directional insight. We found some of the learnings to be surprising — and I’m sure we’ll continue to be surprised many more times over the next ten years.”
Nevertheless, Peggy Johnson from Microsoft felt it necessary to include First Round’s data in the blog post as some sort of indicator of industry trends, when in fact it’s outlier data and not even “statistically sound”… according to First Round.
Anyway, Johnson rounds out the blog post by talking up how important diversity is, writing…
“At Microsoft, diversity and inclusion are central to the culture we’re building. To achieve our mission to empower every person and organization on the planet to achieve more, we need to be a truer reflection of the planet we serve. While our efforts are a story of steady progress, we know there is more to do to become a more diverse company.”
This is all part of Microsoft’s “diversity” agenda, part of which Phil Spencer, the head of Xbox, laid out during this past year’s E3. Spencer even went so far as to refer to himself as a “privileged white guy”.
Microsoft is going all in on the diversity agenda, especially after Intel’s diversity initiative came up short when the Intel CEO that instated the diversity agenda had to resign for corporate misconduct after he cheated on his wife with another employee at the company.
As for the M12 venture capital competition, you can learn more by visiting the Female Founders competition page. Registration will be open up until September 30th. The competition will conclude this fall.