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By Li Gong, partner, Youbi Capital
In general, venture capital is a boys’ club. In crypto, the gender gap is even worse. Women in VC estimates that 8% of crypto fund partners are women, roughly half the number of women in general VC.
As one of the few women involved in crypto fund decision-making, I recognize this gap every day. I also rally to close it. In my view, more women buying crypto must result in more women funding crypto.
Here are three ways we, as a nascent tech sector, can work to fix the glaring gender gap in crypto VC.
Bring more women into funding and founding
Cryptocurrency, much like tech in general, is a male-dominated sector. A recent analysis of founders of the world’s leading crypto companies discovered that of the 121 listed founders, only five were female. This amounts to a little more than 4% of all founders. Worse still, all of the companies also count at least one fellow male founder.
It’s a sad reality that this overwhelming male to female ratio translates to those who fund crypto projects: venture capital. I am part of the less than one in ten women who have a seat at the funding table. Speaking from that experience, I can tell you that one way to bring more women into funding and founding is to add more of us to the crypto funnel.
In blockchain, again mirroring tech, there are far fewer women coders or programmers. As a result, our still-blossoming industry is heavily skewed to one side when it comes to those generating new ideas and founding startups. The knock-on effect of this is that there are even fewer women with the right know-how and networks to fund crypto.
Going forward, blockchain as a whole must ensure that more diverse players are taking part. This should start with the ecosystem offering education programs, workshops and opportunities for women to invest and start their careers in web3. For example, BFF is a decentralized organization with a mission to help women and non-binary people get educated, connected and financially rewarded in crypto. The group counts more than 20,000 members on Discord and hosts regular events for members to learn and grow in the space. With more women in the industry, we are likely to see more women thrive in crypto funding.
Crypto must vote with its wallet
In addition to education, the ecosystem needs to put its money where its mouth is. Crypto needs to vote with its wallet and reward funds and projects with gender diversity. From crypto investors to fund decision-makers, there needs to be a push from all sides to fight for inclusivity.
It’s heartening to see some efforts already heading in this direction. For example, Alinea helps crypto buyers take a look under the hood to meet the people behind the project. The app – founded by two young women – explains how each company makes money, how they champion diversity in the workplace, and their environmental impact on the world so customers can buy stock in companies they believe in. Revealing this insight empowers socially responsible investors to back companies that align with their worldview.
Venture capital funds, meanwhile, require incentives to change. Certainly, one way to get their attention is by impacting the bottom line. For example, if altruistic founders and investors only agree to partner with funds that count at least one woman partner, then perhaps change will come about sooner than later. It’s worth mentioning that more diverse funding boards are in the best interest of crypto VC. Greater diversity among team members is proven to result in higher innovation and creativity, two elements that are often the difference between investing early in the next big thing or not.
Ecosystem support matters
From top to bottom, the lack of crypto VC diversity is stark and remains a contributing factor to the low amount of funding that women founders receive. This is deeply saddening, since blockchain burst onto the scene with promises of rewriting power structures. Instead, it seems that our industry is falling into the same tried-and-tired tale of gender imbalance. As said recently by BlockFi’s Flori Marquez, men shouldn’t be the only segment to experience this new technology and its upside.
The good news is that it’s not too late to change. As our industry evolves, more women are coming on board and supporting one other to bigger and better things. Look no further than non-fungible tokens (NFTs). The rapid growth of these unique pieces of digital artwork has paved the way for women digital artists to make a living on the blockchain.
One project, in particular, is putting women front and center. World of Women is a collection of 10,000 NFTs that champion diverse and powerful women. Created by artist Yam Karkai, the project carves out a welcoming space in NFTs and ranks as one of the world’s top digital art collections in market cap. With trailblazing projects like this finding support, I look forward to seeing women at the crypto forefront in the coming years of web3.
Truly, support from the wider community is how we will change the status quo. At the same time, however, we must remember that change doesn’t happen overnight. Bringing more women into crypto funding requires a holistic ecosystem ethos to make our space as inviting as possible. Then, and only then, will we reap the benefits of more diversity in those who buy crypto, found crypto and fund crypto.
Li Gong is a partner at Youbi Capital.