The SoFi Sex Scandal Highlights How Hard It Is For Women In Fintech
Fintech has become a major force over the decade since the financial crisis, with $12.8 billion in venture capital flowing into the sector in 2016 alone. But of the nearly 500 deals that took place in the U.S. last year, less than a dozen went to companies founded by women.
That lack of representation at the top set the stage for harassment and misconduct at SoFi, a lending startup now embroiled in a lurid sex scandal and leadership shakeup. It has contributed to an overall lack of gender diversity among mid-level managers and staff at most fintech firms, women in the industry say.
“It’s lonely to be a woman in fintech, especially as a CEO,” says Rachel Mayer, cofounder and CEO of Trigger, an automated tool for investing alerts. An MIT graduate, she spent five years working on the emerging markets trading floor at JPMorgan Chase, and then earned a master’s in engineering from Cornell Tech. In her experience, fintech has been worse than finance. “[Banks] really got their act together in the last 10 years. These types of interactions are resolved in a clear manner, with an arbitrator.”
At fintech conferences, in contrast, Mayer is on her own. “I have to be so careful about everything—everything that I wear, everything that I say, all of my numbers. That’s how I cope, knowing that I’m prepared for any type of situation.”
It doesn’t have to be that way, says industry veteran Amy Nauiokas, cofounder of investment and advisory firm Anthemis Group. “The financial industry of the ’80s was not created overnight. It’s really hard to change that type of ingrained culture,” she says. “What’s not hard is building, focusing on, and demanding positive corporate culture, diverse teams, and diverse leadership when you build a company from scratch. Shame on all of us if we’re building companies from scratch and we get this wrong.”
At Anthemis, based in London, 56% of employees are women, a remarkably equitable gender breakdown that is consistent at every level. “We need to hire differently, and we all need to hold ourselves accountable for real change,” says Nauiokas. There is no excuse if “we turn a blind eye to allow ‘innovation’ to happen.”
Women who do succeed in the current fintech environment learn to construct an armor of their own design. For example, Learnvest founder and CEO Alexa von Tobel, who grew up with two older brothers, had developed the thick skin required for “hanging out with lots of guys” by the time she arrived on Wall Street.
Nicole Sanchez, a venture investor who previously founded startup eCreditHero, draws strength from her sense of optimism. “I’m a woman of color in technology. People will ask me about how hard it is. It’s always been hard, but I can’t tell myself that in the morning,” she says. “I choose to be optimistic. It’s the only way you can build a company.”
Sanchez, like Learnvest’s von Tobel, chose to target women customers. It wasn’t easy. “If your audience is women and your investors are men, you have to do a much better job explaining the revenue opportunity,” she says.
Former banking executive Sallie Krawcheck is following a similar playbook with her female-focused investing service, Ellevest. Since founding the company three years ago she has raised over $50 million in venture funding. “Women don’t invest to the same extent that men do. What’s out there isn’t working,” she said during an interview with Recode last summer. “Women say the industry doesn’t speak to them, can be condescending to them, doesn’t understand their needs. Women are sitting back in their chairs and it’s costing them a fortune.”
And that, in a nutshell, is why solving the problem of women in fintech is so important. More women founders leads to more women in the industry, which leads to better products and financial outcomes for women. Gender diversity isn’t just an abstract idea; it has a meaningful impact on wealth.
“There’s no question that things are changing,” says Nauiokas, pointing to trends like the increase in the number of women attending business school. “The problem is that it’s not happening nearly fast enough.”