Girl Power

Sequoia Capital made news this week when they hired the firm’s first female investment partner in the United States.  This appears to be a 360 degree turn from last year, when, according to The New York Times, Sequoia’s Chairman said the firm did not have female investors in the United States because it did not want to lower its standards.

Women are rare in the highly competitive and cutthroat field of venture capital. According to The Times, research from Babson College showed the percentage of female venture capitalists at 6 percent, down four percentage points from 1999, at the height of the dot-com craze.  The CrunchBase Women in Venture report found that of 100 venture firms studied, 7 percent of the partners at those firms were women, and that 38 percent of the top 100 firms have at least one female partner.  In February, Bloomberg columnist Barry Ritholtz sought to answer the question: Why aren’t there more women in finance?  A possible answer is that “it may be a legacy of what has not only been a male dominated society, but it probably also reflects an industry that is particularly resistant to change,” or that “there are simply not a lot of women in senior positions in all of business, and finance to a great extent mirrors that reality.”

One would think then that there is a perception that women are not as accomplished as men. According to Ritholtz, several studies (Fordham University and the CFA Institute) have found that women in the actively-managed fund industry tend to outperform their male peers.  If true, why are the numbers still so lopsided?

Perhaps the tide is turning for women in business, however. The Los Angeles Times noted that among the largest U.S. companies, women now fill 20 percent of board seats, up from 15 percent in 2005.  In fact, women have made strides recently in other male-dominated professions.  There are now female referees and coaches in the NFL, female play-by-play announcers for major league baseball and female heads of state.  Great news, for sure, but how is that playing out in corporate America?

A 2012 case against Kleiner Perkins Caufield & Byers showed that women and men don’t always play nicely in the sandbox. That case saw a female partner, Ellen Pao, sue the firm for gender discrimination.  She lost the suit in 2015, but during a press conference Pao was quoted as saying, “If I’ve helped to level the playing field for women and minorities in venture capital, then the battle was worth it.”  Pao recently launched Project Include to assist startups and HR departments with recruiting, hiring and retaining a diverse workforce according to Wired.  Project Include also works with venture capital firms whose business is to help startups develop.

There is a lot of work to be done, but it’s my opinion that embracing diversity in the boardroom, on Wall Street and in business can only help improve the variety of opinions, talents and expertise necessary for us to thrive.

— Laurie Berman,

On the IR Front…What’s a Penny Here and There, Anyway?

While a penny can be a pretty big deal as far as earnings per share performance goes, when it comes to trading stocks, the National Market System (NMS) thinks and hopes the lowly cent, actually five cents, can potentially make a really big difference when trading stocks.

Starting by the end of this month, as a way to increase the attractiveness of trading and research in smaller cap stocks and to make going public more attractive, the NMS will implement its “Tick Size Pilot Program,” effectively widening the minimum quoting and trading increment by raising the tick size to a nickel from a penny.

By definition, a “tick” is a measure of the minimum upward or downward movement in the price of a security. If a stock has a tick value of one cent, each tick, or price movement is in one-cent increments per trade. As part of the test, each tick will be equal to five cents per trade.

As a by-product of the 2012 Jobs Act, the program is set to last for two years, following which a determination will be made if increasing the tick size increment will improve the liquidity, trading and market quality of stocks with market capitalizations of $3 billion or less; average daily trading volume of one million shares or less; and volume-weighted average price of at least $2.00 for each trading day. The test will be implemented on 1,200 stocks.

The NMS is the national system for trading equities in the United States, and includes all the facilities and entities which are used by broker-dealers to fulfill trade orders for securities, principally including the New York Stock exchange and Nasdaq.

While it is difficult to foresee what the impact of the test will be, the hope is that will allow for a bigger list of stocks that are accessible to quality institutional investors.

Roger Pondel,