As a CFO, COO and now CEO, Amy Spurling has helped startups raise $200 million in venture capital over two decades while working in Boston tech.
“I can tell you that the questions that I’ve been asked as a female founder are dramatically different from the male founders that I have sat next to,” said Spurling, now the founder and chief executive of Compt.
Spurling has been asked by investors when and if she plans to have children and about her “sexual history.” She was told that in order to get a reference, she would need to go to dinner in a low-cut shirt with an investor.
“All of these things would be illegal under employment law,” Spurling said. “But because there are no protections for female founders, this can happen and it’s rampant.”
Massachusetts founders and investors testified in front of the state's Joint Committee on the Judiciary Tuesday afternoon, urging legislators to push forward legislation extending anti-discrimination laws to investments.
The bill, filed in the House (H.1708) by Rep. Tram Nguyen and in the Senate (S.978) by Sen. Cindy Friedman, would make it unlawful for a professional investor in Massachusetts to engage in sexual harassment or discriminate against someone belonging to a protected class, including on the basis of race, gender, pregnancy and sexual orientation. This would include people funded by an investor or being considered for investment funding.
Advocates for the legislation say it would finally ensure investors were held to the same standards as other employers and workplaces in a time when there are still huge inequities in venture capital funding. Detractors have said it could lead investors to take fewer meetings with underrepresented founders in the first place.
Friedman, an Arlington Democrat, first filed this bill in the 2019-2020 legislative session and filed it again in the 2021-2022 session. Both died in committee. This time around, Friedman said they’ve changed the bill to note that only the attorney general can bring a discrimination case against a venture capital firm. A sexual harassment case could still be brought by anyone.
In Tuesday’s hearing, advocates expressed hope that the updated legislation would finally make its way out of committee on its third attempt.
Founders call for change, VCs largely mum
Rica Elysee, the founder of BeautyLynk, said despite participating in accelerators like MassChallenge and going out of the state for better opportunities, she has encountered “biases that have no place in the entrepreneurial world” that impacted her business. Elysee, a Black female founder, said she has been told her business is “too Black” and faced inappropriate remarks.
Elysee and several other founders, like serial entrepreneur Karen Kelly, spoke in favor of the legislation during the hearing.
“The investment dollars for female entrepreneurs in the state is embarrassing, and I do not believe that any of you harbor the belief that women are only capable of coming up with 1% of the investable ideas,” Kelly said. “By supporting one simple bill, you can singlehandedly rebalance the scales of equity and unlock a competitive edge for the state of Massachusetts.”
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No one spoke against the legislation in Tuesday’s hearing. In 2019, when similar legislation was put forward, the New England Venture Capital Association did not support the bill.
Then-president Jody Rose said the industry group “harbors serious concerns about unintended consequences for minority entrepreneurs,” including investors not meeting with them over concerns that declining to invest in an underrepresented founder might lead to discrimination charges.
In an email to BostInno last week, Ari Glantz, executive director of NEVCA, said the group was focused on its year-end event, the NEVY Awards, and would not be attending the hearing.
The funding landscape
The share of venture capital funding brought in by underrepresented founders remains low, especially in Massachusetts.
Last year, BostInno reported that Black startup founders in Massachusetts raised 0.56% of the total $19.5 billion that Massachusetts companies brought in. Latino founders raised 3.4% of the state’s venture capital total. Nationally, women-led startups received around 2% of all VC investments.
Rajiv Kapoor, a founding partner at Chai Ventures, testified that the lack of representation in venture capital impacts the funding underrepresented founders receive. Pitchbook found that 95.5% of VC firms have a majority male population of decision-makers.
The capital gap extends beyond venture funding.
A new report from The Boston Foundation found that the capital gap is getting worse for business owners of color. The report found that more than half of startups of color are completely denied loans.
