Sequoia’s hire of Lee as its first female U.S. investment partner will help fix the problem

Last week, Sequoia Capital announced something that one of my friends called “amazing.”

The 44-year-old firm named Jess Lee the first female investment partner within the firm’s U.S. operations.

It’s an amazing development because last year Sequoia Chairman Mike Moritz was roasted on Twitter for telling Emily Chang of Bloomberg TV, while discussing the lack of women partners, that the firm wasn’t prepared to “lower our standards” in hiring a female partner.

Moritz later amended that comment in an email to Bloomberg when he wrote: “I know there are many remarkable women who would flourish in the venture business. We’re working hard to find them and would be ecstatic if more joined Sequoia or other firms.”

The firm did find a female GP for Sequoia, and she is Lee, who is co-founder and former chief executive of fashion ecommerce site Polyvore, which Yahoo bought last year for about $200 million. Sequoia told Bloomberg that the firm had been trying to recruit her to its roster since 2012.

If it wasn’t for the lack of women in VC and for the comments from Moritz, what we would be talking about is that Lee, 33, will be one of Sequoia’s youngest partners at the firm when she starts on Nov. 7. It’s also an interesting hire for the firm, which, as we’ve reported, has turned considerable attention to China and India in recent years,.

But none of that is being discussed because VC lacks women.

I reported in late August on the situation in a story about Women.VC, a San Francisco nonprofit that has tracked women in VC and found that their performance is on par with, if not better than, the industry average.

And this was before the billion-dollar sales of Dollar Shave Club and Jet.com. Forerunner Ventures, founded by Kirsten Green, was the lead backer in Dollar Shave Club’s first round of funding in 2012 and invested in Jet.com. Cowboy Ventures, founded by Aileen Lee, also invested in Dollar Shave Club.

In partnership with PE Hub and VCJ, Women.VC surveyed the industry and reported that as of June 30, 253 women were active VCs nationwide. Since then, the group has added female GPs to its list, available here.

And Women.VC told me that weeks after the story ran, it was still responding to email inquiries about the study and the list. And the group is moving ahead with its research into compiling a similar report about women VCs in Europe and Asia.

Women.VC said last week that it is planning to offer a list of services, including career development for women wanting to pursue a career in VC and recruitment for venture firms.

Some firms currently do a great job with diversity. Canaan Partners, which already had three female GPs on its tech and healthcare teams, recently promoted Julie Papanek to partner. But many large firms, Accel, Mayfield and General Catalyst, to name a few, have all-male GP rosters.

I’ve heard from at least two venture firms that are looking to hire associates and are giving strong consideration to female applicants.

At our PartnerConnect West conference at the Hotel Nikko in San Francisco in late September, I was on stage with Venky Ganesan and I asked him about the lack of women VCs.

Ganesan, managing director at Menlo Ventures (which has no women investment partners) and chairman of the National Venture Capital Association, said the industry has only hurt itself by not doing a better job recruiting and promoting women, and it’s missing out on deal opportunities that a different perspective might bring.

The NVCA is preparing to soon release its report on diversity in VC. And Ganesan also noted research varies on how many women GPs there are, but he said regardless of the percentages, “it is terrible and not acceptable. Not in 2016.”

The hiring of Lee will help, but more work needs to be done.

Photo illustration courtesy of ©iStock.com/Jorgenmac