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Cindy Padnos is the founding Managing Director of Illuminate Ventures, focusing primarily on Internet, SaaS/cloud computing, digital media, technology-enabled services and mobile communications investments. Cindy currently serves as a director of privately held companies BrightEdge, CalmSea, Wild Pockets and Xactly Corporation. Prior to founding Illuminate, Cindy was a Director of Outlook Ventures where she was one of three investment professionals responsible for committing the firm’s $140M fund.Before entering the venture capital community Cindy gained almost 20 years of operational experience culminating in her role as founder and CEO of Vivant, an innovative SaaS company, where she successfully led this venture-backed company to its acquisition (EVLV). Cindy can be found at Illuminate Ventures & on Twitter @IlluminateVC .
This is Part III of the interview.
Transcript follows & video above
- What sort of challenges do women face if they become a venture capitalist?
I dont think for me personally there is that much difference being a woman investor versus being a male. Its an interesting question. The reason I say that is I’ve worked in the Tech world my entire career. 90% of my relationships are with men because its 90% of the population in every company I’ve worked in. So I don’t think that all of a sudden that puts some new barrier or issue in place for me. In fact in some ways it has created an amazing & unique opportunity for me. There are many, many successful women entrepreneurs, women in corporate tech positions that haven’t got the same rapport & relationship with men in technology that I can have with them. It doesn’t exclude men in some way, but the natural affinity that any of us have whether we are Latino or Black American or we’re from the south or the north or whether we’re Muslim or Presbyterian, all of those things about us cause us to have a natural affinity with people who are somewhat more like us. So in an intersting way, because there are not that many of us in venture, roughly 5%, of the partners in high tech venture capital today are women, it creates an interesting camaraderie, it creates an interesting opportunity to reach out to other women in the sector, we aren’t hard to find. I don’t have any doubt that there are some things we miss out on, not being on the basketball court together, not going to other activities, not going to poker. Its not that I’m not invited, its just that poker isn’t my favorite thing to do or cigar smoking. I have no doubt there are some things along the way that we’re not connected in but we are in other ways. I also believe most of the investors I work with & sit on boards with see a value add to having someone with a slightly different perspective on the board with them.
- What needs to happen for venture firms to employ more women venture capitalists?
It’s a tough question right now because there are not many venture firms that are growing today. Venture Capital is not a scalable business. You can’t just raise more capital & go do more deals. It generally has not been successful that way. There are a few firms who have done it very well, organizations like Battery & NEA. But they’ve had a long history that has allowed them to build that & do it. They have a lot of structure around making that work properly. Most firms can’t do that. So what that means is that when you are at a point in time, like we are today, when venture capital fundraising is actually significantly below what it has been historically. Firms are not raising larger pools of capital, in fact they may be smaller. There may be fewer firms. And the result of that is that there are very few firms that are going to either add new partners or are going to get started. The data we collected on this topic a year ago is very interesting because it literally showed that smaller, newer firms, those with under $250million under management had twice the percentage of women partners than that were the largest firms. Now that sounds really exciting until you look hard at that & see that those firms only have 2 to 5 partners versus the firms that may have 5 to 15 team partners so while its great that that is happening its a slow process of building the sheer numbers, building the actual ratio. Because one partner suddenly means you are at 50% – its half the firm when its one partner in a small firm, or a third. So the percentages are a little bit deceptive when you are dealing with such small numbers. I think it will happen in some of the smaller, newer firms. I think it will happen as more firms have senior partners who choose to retire & new teams are being brought in. Realistically a very large number of venture capital partners have been successful entrepreneurs themselves before going into venture. So what does that say, first these women have to get funded, then they have to have successful exits. Then the firms who were able to help them achieve those goals can invite them to come in & join as partners in their firms. Its a lengthy process & I doubt it will happen tremendously quickly but it will happen.