Sex, Money, Power — tackling three of the chunkiest elephants in the room
They say elephants never forget. Well this isn’t a discussion we’re going to forget in a hurry.
The largest event of its kind in the Asia Pacific region and the first time on Australian shores, the global juggernaut that is SXSW is best known for its convergence of tech, film and television, music, education, and culture.
With a brand new baby in tow, our Founder and CEO Christina took to the stage at the inaugural SXSW Sydney, alongside Jessy Wu (AfterWork Ventures), Lucy Wark (NORMAL and Fuzzy), and moderator Vidit Agarwal (High Flyers Podcast) to tackle three of the biggest elephants, not just in *this* room, but arguably in any room, the worldover: Sex, Money and Power.
The vibes were high, and not just because we were talking sextech with NORMAL. But perhaps our favourite part of the session was tackling the intersection between money and power — who has it, how to get it, and what to do when you have it, so it’s good for everyone involved?
Mic in hand and baby on boob, that’s just how our CEO, Christina rolls. Aside from the sheer logistical feat of being at an event less than a week after giving birth (😵💫), our fearless founder spilled the tea (not the milk) on a topic that not only most CEOs in fintech are afraid to call out, but that probably isn’t even on most of their radars. Are you sure you’re ready? Ok, here it is…
Startups are often romanticised and pitched as the disruptors of ‘old money’. But it’s basically impossible to be a startup founder, unless you have rich (or very well-connected) parents.
This has created a situation where the startup ecosystem — from fintech to sextech to venture capital — is more structured around conformity than contrarianism, and perpetuates the patriarchal status quo. Let’s wrestle.
Romanticising startup culture
When we think about the almost-canonised disruptors in our society, names like Gates, Musk, Bezos, Dell, Zuckerberg — what they all have in common, apart from being white men, is that they all had parents who gave them a leg up.
While, of course, it’s simplistic to chalk up their success to the bank of mum and dad — the hand outs, legs up, and foot in the door — certainly played a role in their ability to go out on a limb (#sorrynotsorry) and follow their dreams, particularly in the startup phases of their now-household name businesses.
Research shows that family money and background plays a “critical role” when it comes to starting a business and is, in fact, one of the primary sources of funding for startups, over things like bank loans and venture capital.
So common is this expectation that the first funding round a founder is expected to raise is known as the ‘friends and family round’, with many founders being told to look around at their network and identify people with a cool half mill to invest as ‘proof’ that a startup has market potential.
But how can that be? Can’t any of us just start a business and make it profitable if we work hard enough and show up as our authentic selves? Unfortunately, no. At least, not yet.
Capitalism thrives on the narrative that anyone, no matter your gender, race or creed, can come up with a great idea, become a founder and go on to be a multi-millionaire or billionaire. But this is just not the reality in our current economic system.
In many ways, startups are to the capitalist ecosystem what Christmas is to Christianity — the twinkly, shiny part that broader society likes to engage with, but is not representative of the whole picture. So, what are we missing?
Let’s get risky
While pointing out the lack of diversity in the startup space is not exactly a hot new take, it’s often spoken about in the context of unconscious bias and institutionalised sexism or misogyny. These are absolutely real. And there are many, many pieces of research that back this up, such as these from Women’s Agenda, Antler and McKinsey & Co..
But one of the reasons for the lack of diversity in startup culture that is rarely spoken about is the level of risk that’s required to build a startup, and how that keeps the playing field unequal and unfair.
“We hear a lot about the fact that there aren’t more women in this ‘game’ because of unconscious bias. And that is true, it is something that does impact women founders. But in some ways, it’s something that only impacts those of us who can even get off the starting blocks. Because if you’ve got to the point where you’re in a pitch meeting with a VC, you’re already far more advanced than most potential successful founders are ever going to be.”
— Christina Hobbs, Verve CEO and founder
Whether it’s how we define what’s ‘risky’ or the powerful allure of ‘do or die’ ventures that attract the highest interest from venture capitalists, the reality is that withstanding the financial strain of getting a startup off the ground is often only available to those with a safety net, or with enough of their own capital to ‘bootstrap’ their way through those precarious few months or years.
Making space for diverse founders
On the panel at SXSW Sydney, Investment Principal at AfterWork Ventures, Jessy Wu, spoke compellingly about her experience hearing several leading Australian VCs remarking that they know ‘instantly’ whether or not they’re in the presence of a ‘great’ founder. As if they “feel it biologically; in their bones”.
Here’s why that’s a problem: it favours people you’re already primed to find compelling.
“That feeling is powered by impressions and instinct, and is drawing on past experiences. This thinking favours people you’re already primed to find compelling. People who are effective at energetically parroting things you already believe, in a manner you’re already used to, using slightly fresh language to make their ideas sound groundbreaking and visionary.” — Jessy Wu, AfterWork Ventures
Writing for Ellevest, Sallie Krawcheck calls out this common so-called investment approach of a large majority of venture capitalists as “pattern recognition,” in an industry where women-founded startups in the US get 2% of funding, Black founders get 1%, and women of colour get “as-close-to-0%-as-you-can-get-without-it-actually-being-0%”.
Similarly, SXSW Sydney panellist Lucy Wark shared her frustrations with the ways that the current system emphasises and rewards “informality, authenticity and ‘not being corporate’” in a way that is actually fuelling exclusion, bias and harassment.
Is it any wonder then, that the startup world, just like finance and tech as a whole, is packed to the rafters with people who all look the same. So much so, that we rarely even get to talking about the people who never even get to play in this ecosystem.
So, how can we make space for more diverse startup founders?
And how can we create a dynamic and equitable startup ecosystem that is truly disruptive? Or, as Krawcheck puts it, how can we “de-bro-ify” fintech and finance? It’s time to talk about the redistribution of power in a society where money = power, and that power is overwhelmingly in the hands of one sex.
Borrowed power vs owned power
According to McKinsey & Co., founders from diverse backgrounds and non-traditional pathways are not just underrepresented—they are underestimated. In their research, they found that white men founders are empowered to fail; that failure is celebrated. But as an underrepresented founder, you are not afforded the same latitude.
To better understand how we can redistribute power, resources and opportunity, let’s dive into the concept of borrowed power vs owned power, as shared by Jessy Wu.
Borrowed power is conferred by or ‘given’ to you by the role you’re in. It’s the power to make decisions, to exercise control, to allocate capital — based on your title or role within a company.
On the other hand, owned power comes from within. It is the influence you have, the knowledge you hold, and the skills you have gained over time. And unlike borrowed power, it cannot be easily taken away.
“Employees begin with borrowed power. Over time, they gain owned power through building relationships, through acquiring know-how, and through developing mastery. Generally, employers have incentives to limit the amount of owned power employees build. Employees cede too much of their power to employers, without even realising it.” — Jessy Wu
As such, Wu encourages us to look at all the ways we can turn borrowed power into owned power and not shy away from owning the immense value we can create, as founders not cut from the mould.
Change is coming
Slamming shut the gender and diversity gaps in investment and venture capital is not just the right thing to do — it is also key to driving innovation and unlocking economic gains. Increased access to funding for underrepresented start-up founders can unlock massive investment and innovation opportunities.
In fact, the economic impact of achieving gender equality in business growth is worth more than $2.88 trillion to the global economy. That’s nothing to sneeze at.
But having an equal seat at the table, and being on the agenda, are probably the bare expectations. Thankfully, there are so many incredible and *actually* disruptive startups and businesses like NORMAL, AfterWork Ventures, and even Verve, who are smashing taboos and challenging the imbalances of power across the finance, investment and tech landscapes. And we’re just getting started.
Keep discussing the elephants 🐘
Unpacking the complex and nuanced relationships between inclusivity, equality, finance, sex, gender, and power structures, have never been more important, and we will never shy away from them.
At this critical moment in our history, we need to be talking about sex, money and power at every juncture — the power we have, and the power we need to grow and flex, to build a better future for ourselves, our community and our planet.
Together, we can change the allocation of capital and power. We must bring unconscious bias into the light. We need to continue to put our money where our values are. We can find ways to redefine ‘risk’ and the rules of the game.
And we must accelerate our efforts to dismantle a system where there are consistently more losers than winners, to create a more just and equitable world for all.
Learn more about how Verve is closing the retirement gap for women+ and join the movement: vervesuper.com.au/for-women/
Disclaimer: Content published by Verve Superannuation Pty Ltd (ABN 65 628 675 169, AFS Representative No. 001268903), a Corporate Authorised Representative of True Oak Investments Ltd (ABN 81 002 558 956; AFSL 238184).