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Venture capital powers innovation, yet investment decisions still favor the familiar. From the original design of the industry to the women reshaping its future, the patterns that drive investment may be poised for change. Is venture capital ready for a new outfit? On October 25, 1988, the Womens Business Ownership Act (H.R. 5050) was signed into law, granting women the right to own and operate businesses without a male cosigner. This landmark legislation was a breakthrough for womens economic independence. Yet by that time, generations of deal making had already embedded a pattern of men investing in men. Pattern matching is woven into the fabric of venture capital itself, such that investment in women-led startups has been stagnant at only 2% for more than 15 years, dropping even below that percentage in 2025. Venture capital, founded by men, invests in the familiar. Whether you mark the birth of the industry in 1946 on the East Coast with the establishment of the American Research and Development Corporation, or in 1961 on the West Coast with Davis & Rock and the rise of Silicon Valley, there is one truth: Men invested capital in men for decades before women could even own a business. PATTERN MATCHING AND THE SCIENCE OF RETURNS Fast forward to 2013, and pattern matching had become part of the investors craft. In a New York Times profile, a partner at Y Combinator (YC) described reviewing video interviews with founders applying to the accelerator to identify predictors of failure: When you have to talk yourself into something, its a bad sign. Such rapid assessments may well have relied on pattern matching. With YC partners predominantly male, could this instinct have influenced cohort selection? The stakes are high: In the Winter 2024 batch, YC admitted just 260 companies from more than 27,000 applicationsan acceptance rate under 1%. Based on self-reported data, only 21% of those companies had a woman founder, and just 11% of the founders were women. If decision making in venture capital were driven by data rather than psychology, more women-led startups would be funded. Women-led startups generate more revenue per dollar raised than their male counterparts, and companies with a female founder have outperformed all-male founding teams by 63%. Morgan Stanley estimates that investors lose $4.4 trillion each year by underinvesting in women and people of color. Yet year after year, only about 2% of venture capital dollars flow to women-led startups. DISRUPTING AND UNRAVELING THE PATTERN To address the lack of access to capital, organizations are working on multiple fronts: expanding the pipeline of women entering venture capital, accelerating the career growth of emerging fund managers, and providing mentorship to empower female founders. A systemic issue requires multiple points of disruption to effect a systemic shift. Sourcing is a pivotal leverage point, influencing which founders are included in the consideration set of strategically aligned, high-potential deals. Twenty-eight percent of venture capitalists are women, and many of themanalysts, associates, and principals in male-led firmsare responsible for sourcing startups as part of the deal flow process. What if women sourcing deals were able to more efficiently identify women-led startups aligned with the investment thesis of the venture capital firm, expanding the consideration set and unraveling the threads of pattern matching? Efficiency means moving beyond the familiar networksthe same elite schools, the same geographic hubs, the same social circlesthat reinforce pattern matching. MOVE THE NEEDLE Thank you to the women, and especially the National Association of Women Business Owners, who advocated and lobbied for this landmark legislation. And to the women entrepreneurs and the women invested in them who still persevere, knowing that progress may not be fully realized in their lifetimes. Shannyn A. Smith is founder of The Capital Boutique.
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E-Commerce
Social media platform Reddit sued the artificial intelligence company Perplexity AI and three other entities on Wednesday, alleging their involvement in an industrial-scale, unlawful economy to scrape the comments of millions of Reddit users for commercial gain. Reddit’s lawsuit in a New York federal court takes aim at San Francisco-based Perplexity, maker of an AI chatbot and answer engine that competes with Google, ChatGPT, and others in online search. Also named in the lawsuit are Lithuanian data-scraping company Oxylabs UAB, a web domain called AWMProxy that Reddit describes as a former Russian botnet, and Texas-based startup SerpApi, which lists Perplexity as a customer on its website. It’s the second such lawsuit from Reddit since it sued another major AI company, Anthropic, in June. But the lawsuit filed Wednesday is different in the way that it confronts not just an AI company but the lesser-known services the AI industry relies on to acquire online writings needed to train AI chatbots. Scrapers bypass technological protections to steal data, then sell it to clients hungry for training material. Reddit is a prime target because its one of the largest and most dynamic collections of human conversation ever created, said Ben Lee, Reddits chief legal officer, in a statement Wednesday. Perplexity said it has not yet received the lawsuit but will always fight vigorously for users rights to freely and fairly access public knowledge. Our approach remains principled and responsible as we provide factual answers with accurate AI, and we will not tolerate threats against openness and the public interest. SerpApi’s customer success director, Ryan Schafer, said in an email: We strongly disagree with Reddits allegations and intend to vigorously defend ourselves in court. Oxylabs didn’t immediately respond to a request for comment Wednesday. AWMProxy could not immediately be reached for comment. Reddit compares the companies it is suing to would-be bank robbers who can’t get into the bank vault, so they break into the armored truck instead. The lawsuit alleges they are evading Reddits own anti-scraping measures while also circumventing Googles controls and scraping Reddit content directly from Googles search engine results.” Lee said that because they’re unable to scrape Reddit directly, they mask their identities, hide their locations, and disguise their web scrapers to steal Reddit content from Google Search. Perplexity is a willing customer of at least one of these scrapers, choosing to buy stolen data rather than enter into a lawful agreement with Reddit itself. Reddit made a similar argument in its lawsuit against Anthropic, alleging that the company ignored Reddit’s appeals to cease using its content. That case was initially filed in California Superior Court but was later moved to federal court and has a hearing scheduled for January. Along with digitized books and news articles, websites such as Wikipedia and Reddit are deep troves of written materials that can help teach an AI assistant the patterns of human language. Reddit has previously entered licensing agreements with Google, OpenAI, and other companies that are paying to be able to train their AI systems on the public commentary of Reddits more than 100 million daily users. The licensing deals helped the 20-year-old online platform raise money ahead of its Wall Street debut as a publicly traded company last year. Matt O’Brien, AP technology writer
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E-Commerce
In todays world, where success is often tied to financial accomplishments, status, and impressive job titles, Warren Buffett offers a refreshing perspective: True success is about the love we share. Yes, love. Buffett once said, Basically, when you get to my age, youll really measure your success in life by how many of the people you want to have love you actually do love you. Buffetts wisdom gets to the core of what matters, reminding us that, ultimately, lifes real currency is the relationships we nurture that lead to two-way love. Who do you want to have love you? Are you a leader, manager, founder, or CEO with scores of people looking at you for guidance, support, motivation, and leadership? I have news for you: Love, in the right business context, does indeed matter for leadership. Thats the premise for my book, which will be released in March of 2025. The big idea behind the chapters I wrote may challenge your belief system. Lets do a quick thought exercise. When we loosely throw the word “love” around in casual conversation, its perfectly natural to express it regarding certain people, places, and things. Think about it. Its acceptable to profess love for a favorite sports team. I have no problems sharing with others that I love my Los Angeles Dodgers and bleed Dodger blue. Professing love for the college or university we attended is acceptable. Its even perfectly acceptable to proclaim our love for a special pair of jeans we might wear only a few times a year. In the workplace, we may go home and proudly tell our loved ones, I love my job, or I love my coworkers. But leaders arent always comfortable expressing love for a team of people they oversee. They may spend nearly half their waking hours with their employees doing good work to the satisfaction of customers, yet they find it hard to infuse the word love into the business lexicon. To me, that type of thinking is bizarre. For every leader ashamed of or fearful of mixing love with work, I point to 10 others whose leadership behaviors unabashedly demonstrate love for their team, company, customers, culture, and everything they contribute to the world. While Im certainly an idealist, Im far from depicting the workplace in some Utopian, Norman Rockwell-portrait of the perfect corporate life. You must do your part by stretching your thinking to reimagine the possibilities for a more loving, human-centered, and humane workplace that results in profitable outcomes. As a leader, you have the power to create a workplace where love and care are not just words but guiding principles. Let me ask you: What if you saw your colleague, coworker, or direct report as a real person with real hopes, dreams, and fears as crucial as your own? And what if, one day, you decided to connect to the heart of people at work as you would a good friend, as one human being caring for another? This is the power and responsibility of leadership in creating a loving workplace. As you imagine being in this frame of mind, let me ask you another question: How would the dynamics change in the workplace as you encountered new challenges and solved complex business problems with the very folks you are kind to and care about? I believe the workplace and how we conduct business as usual would radically differ. This is especially true if youre in a leadership role, whether youre the shift lead supervisor of five people on the manufacturing floor, the founder of a 50-person startup, or a Fortune 500 company CEO. People also want to experience purpose, growth, and success in their jobs and feel their leaders are doing their best to care for them. Thats the bottom line: People want to feel cared for. But I call it for what it really is. In this age of toxic polarization, finger-pointing, and looking after No. 1, that, right there, is the new measure for your success. As Buffett said, when its all said and done and you reflect on your achievements in life, it would be great if you could confidently say to yourself, Because of my willingness to care for and serve others, and because I put people first, I am loved. Like this column? Sign up to subscribe to email alerts and you’ll never miss a post. Marcel Schwantes This article originally appeared on Fast Companys sister publication, Inc. Inc. is the voice of the American entrepreneur. We inspire, inform, and document the most fascinating people in business: the risk-takers, the innovators, and the ultra-driven go-getters that represent the most dynamic force in the American economy.
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