Women in Venture Capital (…and an Opportunity)
The percentage of women in corporate leadership positions today is abysmal, and it’s even worse in the venture capital world. I want to go into detail here by reviewing the make-up of leadership positions today across Corporate America, the early-stage investment community, and start-ups.
Women currently hold 4.8% of CEO positions at Fortune 500 Companies. Women held only 16.9% of corporate board seats in 2013, indicating no significant year-over-year uptick for the 8th straight year. And only 14.6% of Executive Officer positions were held by women — the 4th consecutive year of no year-over-year growth. Stay tuned for my next post when I discuss the correlated financial results behind these companies’ numbers. For now, I will proceed with just the numbers of women in leadership…
While the percentage of women in leadership roles in big enterprise is grossly out of balance, there has been a lot more progress in small businesses. Women-owned businesses account for one-third of all types of businesses in the US, and over the last almost two decades women-owned firms increased 1.5x faster than the national average. So, the percentage of women in venture capital-backed companies should look great by now, right?
Very sadly, no. 85% of VC backed companies still have no women on their management team and more than 97% have male CEOs. When we look at the total number of women partners in venture capital firms, it has declined from the already low 10% in 1999 to only 4.2% today. However, although the number of women angel investors was less than 5% at the turn of this century, women angels have grown to over 20% of the total angel population today. And, we know the proportion of women investors in crowdfunding is growing, with women making up approximately 44% of the funders on Kickstarter.
I have to give a shout out to Austin, Texas, which is fighting well above its weight; the city is ranked #35 in population and #6 in the number of women-led businesses seeking equity crowdfunding. There are surprisingly few reports or press on women running accelerators. However, I took a look at the top 15 accelerators according to the Seed Rankings project, and I found 20% have women co-founders and 87% have at least one female in a top position. Let me state that again: 87% of top accelerators have a woman in a top position and 4.2% of the big VC firms have a woman in a partner-level position — very different numbers.
As I mentioned before and will go into more detail on next time, research has convinced me that this gender profile is not going to be the answer over the next few decades! Stay tuned.
