VCs are homogeneous and similar to each other in terms of gender, race, educational background, and work experience.
Venture capital is historically male-dominated, which has led to a dramatic overrepresentation of men as VCs and entrepreneurs today. The fundamental structure of the venture capital industry makes it an unlevel playing field for women and men while perpetuating a status quo bias, or an implicit acceptance of and preference for the way things are. The Advancing Gender Equality in Venture Capital project is part of WAPPP’s Gender and Tech research portfolio. To answer these questions, we undertook a comprehensive review of existing literature on gender in venture capital conducted 21 in-depth interviews with venture capitalists in New England (in collaboration with the New England Venture Capital Association) and analyzed over half a million online conversations between entrepreneurs and VCs (in collaboration with Culturintel). What can VC firms, individual investors, and entrepreneurs do to dismantle these barriers and meaningfully advance gender diversity and equality in venture capital? What are the industry-wide, organizational, and interpersonal barriers to gender equality and inclusion in venture capital? Why is the venture ecosystem still so male-dominated? Our findings provide evidence-based answers to three questions:
Venture capital firms full#
WAPPP’s Advancing Gender Equality in Venture Capital research project examines how the components of VC industry culture, organizational practices and policies, and patterns of interpersonal interaction affect full gender inclusion in venture capital. Research shows that VC firms with 10% more female investing partner hires make more successful investments at the portfolio company level, have 1.5% higher fund returns, and see 9.7% more profitable exits. Advancing gender equality in venture is not just the right thing to do, but it is also the smart thing to do because it is an evidence-based way to increase the prosperity of the whole industry. The gender gap in venture capital can lead to major disparities in the tech sector and beyond given that venture capitalists play a critical gatekeeping role in deciding whose ideas, products, and innovations get a chance to shape our modern economy and society. VC firms do not have a single female investing partner. The 30-year average of all-female founders’ share of VC funding is 2.4% – almost identical to the share in 2018 (2.3%). Currently in the United States, women make up approximately 11% of investing partners at VC firms, and only around 13% of venture capital dollars go to startups with a woman on the founding team. Despite years of efforts to increase diversity in the venture capital (VC) industry, a significant gender gap remains among both investment decision-makers at venture capital firms and among recipients of venture capital funding.
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