Published in UT San Diego, November 18, 2013
Having access to venture money is key to growing a high-value company, but the low number of female associates and partners in venture-capital firms makes it harder for female entrepreneurs because “they have a difficult time establishing connections that lead to investment,” according to Gatekeepers of Venture Growth, a report published by the Kauffman Foundation.
In 2011, only 11 percent of the investment professionals at venture firms were women, says a survey by the National Venture Capital Association and Dow Jones VentureSource. The numbers have changed very little in the last 11 years.
However, female founders are finally making some progress. In 2004, female-founded companies represented only 4 percent of all U.S. venture deals compared with a record 13 percent of deals through the first half of 2013, shows data from PitchBook.
So what is the path for a woman to become a partner at a top venture capital firm?
For Kim Kamdar, a partner with Domain Associates, the journey started with a love for science that led her to Northwestern University, where as an undergraduate she “beat down the doors” of her professors until one allowed her to work in his lab.
Next she obtained a doctorate in biochemistry and genetics, and against the urging of her advisers (who wanted her to stay in academia and avoid “the dark side of industry”), she joined a pharmaceutical company that eventually became Novartis. As a young scientist at Novartis, she proposed a research project, secured funding from corporate headquarters in Switzerland, and was chosen to lead the team.
While visiting a Novartis affiliate in San Diego, she learned about the Kauffman Fellowship, a two-year program during which the participants work full time at a venture firm or another type of investment organization and also go through a structured curriculum tailored to their needs and interests. In 2003, Kamdar was accepted, and after she finished, she joined Domain as an associate in 2005, becoming a partner in 2011. Domain, started in 1985, focuses exclusively on the life-sciences sector and has raised more than $2.7 billion.
“When I was at Novartis, I thought that I was seeing a lot of technology and cutting-edge science. As a VC, I spend every day learning something new, and I get to work with people who are passionate about what they do and will do anything to get their technology and company off the ground,” Kamdar said. Her scientific background combined with her operating experience at Novartis have been instrumental in analyzing deals and then working with companies as they grow, helping position them for a financing or acquisition or deal with a problem executive.
Although she is one of a few female venture partners, she said that she has never felt that being a woman was an obstacle. At Novartis meetings in Switzerland, she was often the only “fraulein” in the room in a formal culture where men were addressed as “herr,” so she learned to stand up and be heard. Even recently, she said, she attended a meeting with partners from other venture firms, and she was the only woman out of about 40 participants. In contrast, three out of Domain’s 10 partners are women compared with 18 percent for life-sciences venture firms in general, according to the NVCA survey. Clean-tech had 15 percent, followed by information technology at 12 percent and the lowest percentage was in the non-high tech products and services sector at 8 percent.
One of the biggest challenges in building a venture-capital career, she said, is that it takes a long time to figure out if you’re any good. “If you’re doing well, you should fail early, particularly in the life sciences, which requires long lead times and lots of money. So in the beginning you may have a lot of failures, and you have to learn to remain calm under duress,” she said.
After gaining a solid foundation in science, Kamdar demonstrated curiosity, initiative, persistence and an ability to operate in diverse environments. Achieving success in venture capital is tough, and you need a unique set of skills and traits to become a partner at a major venture firm — a big accomplishment regardless of gender.
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Neil’s note: Rule No. 329: Fail early and fail often, but don’t make it a habit.