Diversity Venture

More Women Are Needed In Israel’s VC Community

By Jonathan ‘Yoni’ Frenkel

Israel has had elements of an egalitarian society since the days of its turbulent inception. Despite this, women in the Israeli VC ecosystem still face hurdles in their fight for representation at the decision-making table.

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Socialist initiatives that preached equality such as the Kibbutz Movement empowered women alongside men to build the country and themselves through physical labor. While the kibbutz is considered Israel’s first failed startup, the Israeli army has endured and succeeded in giving women in Israeli society an equitable role.

Although the Israel Defense Forces created a strong foundation for women’s professional empowerment, one area where there is still a dearth of female representation is the tech community, in particular venture capital.

Jonathan ‘Yoni’ Frenkel of Atento Capital

The recent Mastercard Index of Women Entrepreneurs ranks Israel as No. 1 for women entrepreneurs, but the numbers paint a different picture regarding women leadership roles in venture capital, particularly when it comes to making financial decisions.

Why not VC?

In other industries, such as banking, women in Israel have been able to break the glass ceiling, and are a sizable representation of the workforce. In fact, recent data revealed that “banks had a relatively high percentage of women top managers, at 30%. Other sectors, however, were clearly male-led. In industrial companies, some 94% of executives were men, and in technology companies, the figure was 93%.”

The same representation does not exist in venture, however.

Orit Alperovitz, co-founder and CEO at NEOME, told me during a conversation that the most recent figure regarding the representation of female investors in Israel’s venture ecosystem she came across was 8 percent, from an article published earlier this year by Qumra Capital. “Unfortunately, this is almost a negligible figure,” she said. “Most of the Israeli VCs are still ‘closed male clubs’ where their partners either grow up together, eat at the same mess hall during their army service, or worked in the same firm prior to founding their VC.”

Oftentimes, one of the excuses male VCs cite for not including women is a perceived lack of background in technology. Not only is this a fallacy but it also isn’t the only requirement for becoming a successful VC.

While Israel is strong in deep tech, it’s not only understanding tech, but also marketing, consumer habits, empathy and other skills which are important.

Close to the money

Many of the roles women occupy at funds are value-creation roles and/or marketing roles, and the majority of these roles are not partner level. There are women in associate and even principal level roles, but ultimately, they are not making the decisions on a fund’s asset allocation. Without an option to join in a true partner role with financial upside in the fund, the pathway offered to women in venture is to take operational roles, which seems to be an afterthought, not a priority in the Israeli VC ecosystem.

“While we can see many women in VC, most of them are in admin or value-creation roles,” said Avigail Levine, head of marketing and ecosystem relations at Samsung NEXT TLV. “In the value-creation community in Israeli, VCs that I manage there are 50 people. Out of them, only six are men and when you look for women in leading investment positions in VCs and CVCs you will find between 10 and 15 names.”

While women may have no option but to take operational roles to progress in venture, oftentimes the partners are the founders of the fund. Woman-founded funds are rare in the Israeli ecosystem.

Like the United States, there are no lack of initiatives in the Israeli ecosystem to help empower women, but there can be no real strides until there is transparency of salaries in venture.

This is indicative of a larger problem. As the survey by business strategy firm Extra Mind PR highlights, “forty-two percent of women reported experiencing discrimination over the course of their careers on the grounds of wage caps.”

Yoni Frenkel heads partnerships at Atento Capital. He is currently in Israel leading the effort to assist local companies with hiring highly skilled remote workers in Tulsa.

Illustration: Dom Guzman

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