Risky Women by Megan Ragsdale – purchase now on Amazon

four women standing confidently with written text "myth: when it comes down to it, women just don't have the risk tolerance."

How to Increase Your Chances of Success

“When it comes down to it, women just don’t have the risk tolerance.” That’s what a prominent venture capitalist told me in 2019 when I asked him why, out of the $200 billion-plus worth of global venture capital funding that year, only 2.8 percent went to women founders, and an even smaller slice to BIPOC+ women.  I have no doubt he believed it, but I think that’s total bullshit. It certainly doesn’t match my own experience as a risk-taker. I traveled around the world solo in my twenties and thirties, started my own company, quit six-figure jobs with no safety net, worked in foreign countries, hang glided in the Swiss Alps, and slept in the jungle with wild howler monkeys, and yet a founder I work with closely tells me often that I’m not risk-tolerant. Why? Is it because he’s willing to close on a multimillion-dollar deal in the moment, and I want to take a few days to perform some due diligence? Basically, yeah. That’s how society defines risk: the possibility of failure (financial, physical, or emotional) x the impact of that failure.

Part of the reason women often don’t think of ourselves as risk-takers has to do with the way we define the word. We think of risk as a zero-sum, high-stakes game associated with traditionally masculine behaviors like racing cars, gambling, and acts of heroism. Our culture values extremes and applauds peak performance. We admire those willing to put it all on the line, like the male founder of a unicorn company who was down to his last dollar before making it big or the basement trader who became an overnight success by exploiting loopholes in the system.

I have a female colleague who started three companies, serves on the board of several others, and is by all conventional measures highly successful, yet she feels she isn’t a risk-taker because she decided to pull back her investment in a company that would not yield the returns she had initially calculated. In other words, she didn’t bet it all on black. If anything, she should applaud herself for avoiding a bad investment, but instead, she tells this story with an air of sheepishness, like she didn’t have the guts to go all the way.

Where has this thinking gotten us? Rogue entrepreneurs like Travis Kalanick (Uber) and Adam Neumann (WeWork), or many of the unicorns (companies valued at $1 billion or higher) that come out of Silicon Valley might be considered risk-takers, but often their companies are unable to reach their revenue and profit targets, and many times they struggle with cultural issues. During the early stages, investors want to get in and get out quickly, so the company often doesn’t get a chance to build stable infrastructure. I’m not saying it’s impossible to succeed with this approach, but it’s problematic. It’s easy to argue that both the housing crisis and the 2008 recession were born out of an addiction to dealmaking and playing with other people’s money—a direct result of this same type of risk-taking.

I’m not an addiction therapist, but I’ve learned that risk-taking and addictive behaviors go hand-in-hand. Many of the male founders and executives I’ve met or coached shared a penchant for high-stakes gambling, partying, and incessant dealmaking, whether or not the deal was compatible with their business strategy. They chased the dopamine hit and would come down very hard when they inevitably lost a high stakes bet. This is not the kind of risk-taking I’m advocating. Although these kinds of business decisions can certainly make you rich, many more people lose their asses and their assets through these bets. It’s just not as sexy to talk about the losers.

You wouldn’t know it from listening to the “conventional wisdom,” but this isn’t the only way to succeed. There is good evidence that when women run companies, their measured approach is better in terms of returns and results in less tumult within the company. Even women venture capitalists can be quite different from traditional male VCs. They spend less, and VC firms with 10 percent more female investing partner hires have 1.5 percent higher returns and 9.7 percent more profitable exits. They are also three times more likely to invest in women founders.

Having a woman at the helm makes a difference—not just because they are bringing their unique perspective to the table, but also because it is so important for other women and girls to see women lead at the highest levels. “If she can see it, she can be it.” People only take risks they think are possible, which means the more women we see in positions of leadership, the more possible it becomes for others to dream that big. 

And when women are in charge, they make waves. Patagonia head Jenna Johnson was one of the first leaders to step out on a ledge and say their stores were going to be closed on Black Friday, so her employees could spend time with their families. For a retailer to close down on the single biggest day of sales was earth-shattering, but now a lot of the other big box corporations are starting to follow suit. Mary Barra, the CEO of General Motors, successfully led the company through one of its most difficult times. YouTube’s success is due largely to the innovative work of CEO Susan Wojcicki. Bozoma Saint John took Netflix and the world by storm as the former CMO, widening the aperture on content to include far more inclusive and diverse projects and people. Indra Nooyi, former CEO for PepsiCo, is credited with leading major corporate restructure and diversification strategies for the company and makes regular appearances on the world’s most powerful women lists. 

I believe that if we can diversify who leads at the top, we will see a greater and more positive impact of businesses on the world around us, creating healthy workplaces where people can thrive. 

Unfortunately, these stories are still the exception and not the rule today. Companies still don’t think women have what it takes to make decisions at the top levels, and often when women do get placed in those roles, it’s when the company is on the brink of disaster. In those cases, the woman leader becomes a good scapegoat for why the company could not recover—hence the term “glass cliff.”

This is an excerpt from my new book Risky Women: How to Reach the Top Levels of Leadership or Know When It’s Time to Get The Hell Out. Available on Amazon, Barnes & Noble, and Porchlight.

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