Anthemis’ Equity in Entrepreneurship Report: A New Metric for Portfolio Parity

From Anthemis’ earliest days, we’ve been committed to funding, supporting, and encouraging women founders. Today, we’re proud to continue that commitment by launching our Equity in Entrepreneurship report, which identifies a new metric VC firms can use as a north star to reach gender parity of founders within their portfolio companies.

VC firms have significant power in determining which founders succeed. Historically, that’s been mostly men. Holding that power means we also have a significant responsibility to create an equitable funding landscape. In recent years, there’s been a concerted push for gender parity across every part of the VC structure — but it’s not always backed by concrete action or financial commitments. Anthemis’ $50 million Female Innovators Lab Fund — the largest early-stage fintech fund focused on female founders–is one way we’re putting our money where our values are. But collectively, we in the VC industry can do much more.

Thankfully, there’s a long history of gender parity efforts from which we can draw inspiration. It strikes me as fitting that we’re releasing the Equity in Entrepreneurship report soon after Claudia Goldin won a Nobel Prize for her work studying women’s progress in the workforce and the process of closing the gender wage gap over hundreds of years.

One of the lessons of Goldin’s work is that closing the gender wage gap has been an uneven process, reflecting the societal and family structures that shape our behavior and economic outcomes. This kind of change takes time, commitment, and vigilance. We must not let small gains lull us into complacency.

In the VC space, our work is cut out for us: startups with at least one woman founder raised just 17.2% of VC funds in 2022, and white women received 79% of seed-stage funding intended for diverse founders. To change these numbers, we need to consistently reassess our goals and the data we use to measure progress toward them.

One goal post that many VC firms use is that 50% of portfolio companies should have a woman founder.

Our Equity in Entrepreneurship report explains why that won’t lead to portfolio parity in the way we might expect, and identifies a new goal post: 70% of the companies that VCs invest in should have at least one woman founder. (In short, this is because a portfolio in which 50% of companies are woman-founded doesn’t mean 50% of founders are women.)

We recognize that this may feel ambitious, but we believe it’s a worthy goal. More equitable gender representation among founders means we’re tapping into founders’ full potential and not leaving any value on the table. It’s also an important step to ensure women founders feel included and welcome, which begins a virtuous cycle toward a more inclusive society.

The report outlines concrete actions that all of us in the VC community can take to get there, like examining the race and gender intersections in our portfolios, partnering with organizations that support entrepreneurship among women, and building spaces where networks of untapped founders are present.

To our VC peers: we know that none of us are in this alone. We want to hear about strategies you’re using to move the needle toward gender parity in your portfolios, and toward a more equitable ecosystem overall. In the coming months, we look forward to facilitating future conversations.

The full Equity in Entrepreneurship report outlines how we identified 70% as a new north star for portfolio parity, what we’re doing at Anthemis to create an equitable ecosystem, and our perspective on where we go from here. We’re eager to hear reactions and reflections on this from everyone in the VC community.

Thank you to everyone at Anthemis who worked on this report — especially Alex Mayall for the thoughtful data analysis — and to all those striving for gender parity in our own portfolio.