Gender-diverse Teams Excel In Decision-making, Growth: Founder Winpe

Prompted Venture Capital and Private Equity (VCPE) in India, like any other sector, has a stark difference in terms of the participation of genders other than men. However, the sentiment is gradually changing across the board. In line with this, BW Businessworld had an insightful conversation with Nupur Garg, founder of Winpe, to understand the shortcomings of the industry and the initiatives it needs to help increase gender diversity. Here is an excerpt from the conversation we had with her:

How Winpe is working towards gender diversity in the VCPE industry?

Winpe (Women in Private Equity and Venture Capital) works with VCPE firms to ensure that their recruitment processes are unbiased and inclusive, giving equal opportunities to both men and women. The organisation has programs in place to attract and retain diverse talent and create an environment that fosters their growth and success all the way to the top.

Winpe offers a range of resources to support women in their career journeys. This includes one-on-one mentorship program that brings together experienced industry professionals and aspiring women in VC and PE, networking mixers and events to facilitate connections with senior women and role models that provide valuable opportunities for learning and growth. Moreover, it offers career resources such as CV reviews, mock interviews, boot camps, vacancy bulletins, and an annual career fair, all aimed at encouraging more women to join the VCPE industry. Membership of Winpe is free for women!  

How diverse teams tend to make better investment decisions, as they are more likely to consider a broader range of factors and perspectives? 

Diverse teams consist of individuals with varied experiences, backgrounds, and cognitive styles, and they bring a broader range of skills and perspectives together. This allows them to examine investment opportunities from multiple angles, considering diverse risks and rewards and thereby make sounder and more informed decisions. 

As per the IFC 2019 report, gender-balanced leadership teams experience about 25 per cent higher increase in valuation compared to teams that lack gender balance. Also, a comprehensive analysis conducted by Mckinsey in 2019 highlighted that companies with highly diverse boards are 28 per cent more likely to outperform their counterparts financially. This performance improvement can be attributed to the synergistic effect of collective intelligence and diverse perspectives fostered by gender diversity, which enhances decision-making.   

Why do you think that there is a need to encourage more women to enter the investment industry?  

The business case for gender diversity in PEVC is well established. In addition to yielding better valuations and MOICs by up to 25 per cent, gender-balanced investment teams have been found to generate an IRR that is up to 18 per cent higher than the median. The IFC report also shows that, on average, a gender-balanced portfolio company outperformed its peers significantly, with its valuation increasing by almost 5.5 per cent points every year.  

Finally,  there is a positive correlation between the presence of women in investment teams and the inclusion of women-led companies in investment portfolios. Women-led enterprises receive only 1.4 - 2.3 per cent of PEVC funding. This trend is not limited to India but is seen globally, with slight variations. To address the funding gap for women entrepreneurs, it is essential for the investment industry to prioritise diversity and inclusivity in its own ranks. 

Why is there a pressing need for gender balance and equal opportunities?  

Gender diversity benefits businesses by accessing the best minds, as women comprise 50 per cent of the talent pool. Research reveals that gender-diverse teams excel in decision-making, generating superior financial outcomes like IRRs, valuations, and EBITDA margins. Investors increasingly view gender diversity as crucial for strong performance, driving its growth.  

Investors now recognise the importance of gender diversity for driving social change and improving financial performance. Lack of diversity poses risks and hampers talent attraction. Strong gender diversity enhances performance and is becoming a screening criterion. This makes gender diversity a sustainable strategy for PEVC firms. 

How do you see the growth of women in India's investment landscape?  

Both firms and women themselves have become more aware of the importance of gender diversity. Women are actively discussing and pushing for inclusion within their organisations, and this emphasis on diversity will soon serve as a powerful indicator of the firm's reputation as a desirable employer. Firms are increasingly recognizing that having a diverse team and portfolio is not only beneficial but also carries weight with their investors (LPs). This shift of investors to evaluating gender diversity has encouraged investment firms to actively work towards increasing the representation of women in their operations.

Moreover, VC firms tend to be more diverse, with a younger workforce and a progressive mindset. The nature of VC, being a business of disruption, allows VC firms to challenge age-old stereotypes of what an investor should look like. Additionally, the rise of on-campus startups, incubators, accelerators, and angel networks targeting women-only cohorts has provided a platform for increasing the number of women co-founding businesses.   

Finally, generational transitions in family offices are also contributing to the growth of women in the investment landscape. More women are taking on capital allocation roles within family offices, increasing their involvement in investment decision-making and creating positive role models and influences.