700 Women Founders

Analyzing 700 women founders, and the VCs that invested in them.

On Friday, I awoke to a trickle of twitter updates about an article in The Information, detailing the unwanted advances of a VC, Justin Caldbeck of Binary Capital. The article was shocking, with three women on the record (and three others off) accusing him of blatantly abusing his position of power with women founders.

Over the course of the day, the trickle intensified, with reports from Pando, Axios and finally a reaction from Reid Hoffman. The day concluded with another Axios article covering the VC’s indefinite leave of absence.

Much has been written about the gender and minority diversity of employees at technology companies (this Fortune article, for example). Yet little has been written about the gender diversity of VC investments.

This surprised me — as founders play crucial roles in building diverse and inclusive companies.

So I downloaded the freely available Crunchbase © 2013 Snapshot database of companies, their employees and their funding rounds. I extracted companies who raised capital in 2009–2013 in Seed, A, B or C rounds.

Then, using the Gender package in R I identified the likelihood that each founder was a woman or man. While gender analysis from first names is far from perfect, for over 80% of founder names we can be 95% certain they are female or male, and so aggregate conclusions should be reliable.

Not surprisingly, I found that a woefully small percentage of founders are women. Of the 17,961 investments by 2,435 investors in 6,771 founders from 3,867 companies analyzed with gendered names, only 10.5% were women.

Women are even less likely to be represented in late funding rounds, and the percentage of women founders increased until 2012, and then regressed in 2013. Some investment regions (Berlin, Tel Aviv) have higher percentage of women founders, while others (Philadelphia, Austin) have materially lower percentages.

Women are also more likely to be founders in companies tagged as fashion, e-commerce or gaming startups. They are much less likely to be founders in companies tagged as real-time, big data or marketing startups.

I then ranked the top 100 VCs (by companies invested in) over these 5 years by their percentage of women founders, and found that the 10 least diverse VC portfolios all had 5% or fewer women founders, and that only the top two most diverse VC portfolios had just over 20%.

The Analysis

Gender is not a field that is reported by Crunchbase, so I used the first names of the founders (identified by searching for ‘founder’ or ‘Founder’ in their title) to estimate gender.

This word cloud shows the top 500 founder first names, and colors predominantly male names in orange, female names in green, and unidentifiable names (e.g., ‘J.’) in grey.

Top 500 most common founder first names by inferred gender (orange = male, green = female, grey = unknown)

There are many Michael and David founders, but it’s immediately clear that female names are few and far between.

The percent of founders that are women drops significantly as you progress from seed to a, b and c rounds of funding.

Percent of women founders by round

Over time, the percentage of women founders rose from roughly 7% in 2009 to almost 13% in 2012, but receded back to only 10% in 2013.

Percent of women founders over time

Some regions (Berlin and Tel Aviv) have 16% or more women founders, while others (Philadelphia and Austin) have fewer than 3%. But these regions also have small sample sizes (70 or fewer companies).

New York, however, has a significantly higher percent of women founders (13%) as compared to the SF Bay area (10%).

Percent of women founders by region and region size.

There are also tags that are much more or less likely to be associated with startups founded by women.

Percent of companies invested in by tag that have one or more women founders

The VC Rankings

Last, but not least, are the rankings of the top 100 VCs.

Top 100 investors sorted by percent of women founders

All of these firms have 24+ founders in this sample (and some as many as 374), and so the variation in results is clearly significant, but data points from firms with fewer investments may be less meaningful. Note that the size of the circles represents the firm’s number of portfolio companies.

The discrepancy between the top and bottom VCs becomes starkly clear when we compare the names of their founders:

Founder first names for the top 5 VCs (left) and bottom 5 VCs (right), where orange are men and green are women

Keep in mind that these findings are simply a summary of readily available data. A reputation for abusive behavior might cause a VC to have fewer women founders, but so could their investment focus, their networks, coincidence and countless other factors. Let’s not jump to any conclusions on specific VCs.

I would also hope that some VCs have made significant progress since 2013, but for now we’ll have to wait for Crunchbase to make more recent data available without subscription to find out.

My Opinion

I believe the women who have said that there are other, as yet unreported examples of sexism and abuse of power in both the VC and broader technology community. I hope more brave women speak out and ignite fires of indignation that, with sufficient attention, will lead to meaningful change.

But I also believe in the power of data, of transparency, and of holding our community accountable to outcomes.

I hope that this analysis can begin that for VCs.

The Code & Data

This github repo contains the code used to produce this analysis. The data can be downloaded freely after approved registration at Crunchbase © 2013 Snapshot.

This post was made significantly better because of feedback from Michelle Suwannukul and Daniel Tunkelang, thank you both!