Wealth

Billionaire Melinda French Gates wants to create an alternative to Silicon Valley: ‘To change it would be incredibly hard’

Melinda French Gates wants to shake up the tech industry, starting in Silicon Valley.

The billionaire philanthropist told Fortune this week that the goal of her venture capital firm Pivotal Ventures isn’t simply to get more women into major companies. Instead, she wants to help foster an entirely new community of women-led startups that can thrive independently of Silicon Valley.

“To re-create Silicon Valley or to change it would be incredibly hard,” French Gates said. “But when you’re starting fresh and new, if you start with a model in this perspective, then I don’t think you’ll replicate the old one we had in Silicon Valley.”

For French Gates, who has a net worth of $6.3 billion as of Wednesday afternoon, that starts with funding projects that aim to reform the way women in tech climb career ladders, improving their access to opportunities and decision-making influence. The idea is that a broader and more equitable range of voices in a boardroom equals more ideas, which betters technology, French Gates added.

French Gates committed $1 billion of her own money to Pivotal in 2019, four years after launching the firm. Since then, Pivotal has donated and invested hundreds of millions of dollars in more than 150 for-profit and nonprofit organizations.

Those include multiple women-led venture capital firms, startup accelerators and educational programs designed to teach skills from leadership to machine learning and artificial intelligence. In early 2020, Pivotal invested $50 million in the Gender Equality in Tech (GET) Cities initiative to increase opportunities for women in rising innovation hubs, like Chicago.

French Gates has been vocally persistent about the need for more female and diverse tech leaders for years. In 2018, she told CNBC’s “Squawk Box” that tech “became a boy’s network very early.”

“Women are so underrepresented in the tech sector of the United States, and yet tech is pervasive — it is changing our lives,” French Gates said. “Women have to be able to have their great ideas come forward, not just have a seat at the table … to help change society.”

At the time, only 2.3% of VC funding went toward women-led companies. A year later, it reached 2.6%, but dropped again during the Covid-19 pandemic. In 2021, funding in women-led companies hovered at 2%, the smallest percentage since 2016, according to PitchBook.

When French Gates was hired as product manager at Microsoft in 1987, she was the only woman in her hiring class, she wrote in her 2019 book “The Moment of Lift: How Empowering Women Changes the World.” She loved the work, but almost quit after two years because the culture was “so brash, so argumentative and competitive,” she added.

She told Fortune that the key to achieving equity is having more women and people of color at the helm of tech companies, opening the door to more creativity, products and innovations in tech.

“[Pivotal is] about how we can get women and people of color further along in the United States, faster,” French Gates said. “For me, this really comes down to looking at key areas: tech, finance, media, politics. You get more equity in those four industries and you will change all of society.”

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