reporting on FEMALE PARTICIPATION in founding teams

marta g. zanchi

Published in

nina capital

12 min readJul 28, 2023

from the front lines of investing in health tech startups

JULY 2023

by Alexia Bernhardt-Lanier, Adriana Costafreda, & Marta Gaia Zanchi

We at nina capital have always advocated for gender diversity in the broader venture ecosystem. Organizations that have diversity make better decisions, period. As a (venture capital) team who invests in (technology startup) teams, we nurture our own diversity and that of our investees. When we invest in early-stage founding teams who are not diverse — something that happens often given the generally poor female participation in the tech entrepreneurial ecosystem — we spotlight the importance of adopting hiring strategies that allow them to bring diversification to their pool of first employees.

Very few teams of founders look like this picture on day one. We encourage founders to invest in the diversity of their startups through sound recruitment practices and creating cultures that value and nurture diversity.

Coupled with our bias for data, our passion has led us early on to consistently explore specific research directions and make a few important decisions in how we measure the characteristics of our dealflow and portfolio.

About our research directions and for example, two years ago, we developed and published a methodology for measuring gender diversity in the Private Equity and Venture Capital industry and then applied it to the Spanish case, resulting in the work published in partnership with non-profit association Level 20. More recently, we refreshed our data to measure how gender diversity has changed. On top of it, we collected new data on gender diversity in our own network of Limited Partners, with a focus on understanding that of the key decision-makers who allocate funds to the venture industry; we published our results on Medium also. Throughout, we have offered some qualitative considerations and our own recommendations for improvement.

Before we tell you more about how we measure our dealflow and portfolio characteristics, we must state some of the general guiding principles for our choices. These are:

we cannot improve what we cannot measure
if we cannot measure it sustainably and repeatably, we don’t do it
if we cannot be part of the solution, we can at least avoid being part of the problem

Accordingly, since the start of our firm and up to July 15th, 2023,

we tag the gender of the CEOs of each health technology company in our dealflow (over 5,000 companies strong in aggregate since 2019 and growing YoY)
we tag the gender of the founders of each company in our portfolio (43 companies strong in aggregate since 2019)

There is a simple idea behind this labeling effort. While we may not be able to measurably and meaningfully change the gender diversity of the entire health technology industry, we can be rigorous in our approach and avoid adding unwanted and harmful biases to our process of selecting new investments so that the leadership diversity in our output (in portfolio) is about the same as the leadership diversity in our input (in dealflow). And in doing so, in the long run, we can hope to see the numbers change in the input — through advocacy with like-minded organizations and by spotlighting our own female CEOs as inspirations for more to join the industry.

Our approach has limitations, of course. Let us walk you through what we’ve learned so far, and in the end, discuss how we (as an industry and as a single organization) can do better in the future. One important limitation we want to mention upfront is that the number of health tech startups in our portfolio is far from the threshold at which we could confidently make any conclusive statements — especially as soon as we start segmenting our portfolio according to certain dimensions. (Conversely, we have a large internal data set of health tech startups, large enough to allow us to say that its characteristics represent those of an industry as a whole.)

In this article, we will highlight the current state of gender diversity in nina’s dealflow and portfolio, analyzing the latter by subsector, technology, and indication, and make some more qualitative considerations to hopefully facilitate dialogue, advocate change, and provide a basis for continuous improvement.

less than one in every five health tech startups in our dealflow has a female CEO

We have screened, filed, and labeled well over 5,000 preseed-to-series A health tech startups in our dealflow since mid-2019, belonging to over 30 countries worldwide; the near totality of these startups are based, to be specific, from virtually any country across Europe, the United Kingdom, the United States, Canada, and Israel.

Of these, 19.0% have a female CEO. As for the rest, 77.7% have a male CEO, and 3.3% have a CEO whose gender is non-binary (or we simply do not know).

nearly one-third of the health tech startups in our portfolio have at least one female founder

Of the 42 active companies in our portfolio*, 28.6% (12 companies) have at least one female founder. In addition, only one company has two female founders. (*Aggregate across two funds as of July 15, 2023, but not including Replica Analytics which was acquired.)

Adding them all up — there are 13 female founders in our portfolio, out of a total of 103 founders in our portfolio, meaning only 12.6% of our founders are women.

We don’t know how this compares to dealflow data because we simply do not have it. Data from external sources seems to validate that this number is generalizable, if not worse. According to a 2023 Sifted article, only 13% of Web3 founding teams have at least one female founder, and only 7% of Web3 founders are women. Recent research by Boston Consulting Group (BCG) and SISTA reveals that, in 2022, women-founded startups in key European markets accounted for only 10% of startups created. And according to a 2022 Novobrief article, female entrepreneurs only constitute about 8% of the women in the active labor force in the European Union. We could go on and on.

over one of every five health tech startups in our portfolio have a female CEO

On a brighter note, and interestingly, of the 13 female founders in our portfolio companies, two-thirds (nine founders) are also the CEO. Put differently: if a female founder is in the team, she is most likely the CEO.

This is, for us, a significant result. Our goal is to invest without any of the unintended gender bias that seems to affect the venture capital world — from which women consistently raise a lower amount of capital, lower than it can be explained simply by looking at their representation in the industry. According to a 2023 Techcrunch article, only 1.9% of venture capital funding went to female-founded companies in the previous year. While we cannot single-handedly change the state of an industry, we can at least ensure that our investment decision-making process does not introduce any unwanted biases. Given the high quantity of dealflow we generate, we expect that ultimately our mix of portfolio CEOs will be, on aggregate, at least as diverse, if not more, than that in our dealflow.

We care about advocating for higher diversity and look with optimism to the percentage of female leaders in our dealflow to increase in the next decade — and with that, in turn, in our portfolio.

some subsectors are especially underrepresented

Taking a deeper look at our health tech subsectors for investment in the portfolio, we found no female representation in founding teams in medication management, medical education, and, most notably, diagnostics analytics (Dx Analytics), despite six investments in the latter.

Source: internal data on nina’s portfolio companies.

While numbers are too small to draw any definitive conclusions for the first two subsectors, the absence of female founders in Dx Analytics may be explained by two decades of depressed female representation in the student body in computer science disciplines, specifically during the 1990s and 2000s (which is when most of our healthtech founders started college). The percentage of female graduates in computer science sharply decreased beginning in the 1980s, with the exacerbation of pink and blue toy branding and the introduction of male-marketed portable video games (why did we call it Gameboy? Why not, Gamegirl?).

If you think there’s something strange with this picture, you ought to reflect on your parenting choices.

In support of this statement, a recent study published by Business Broadway found lower rates of female employees in data-related roles compared to male employees, suggesting women are underrepresented and face entry barriers in this subsector. There is a bright light, however. Slowly, this trend is being overturned, and more women are looking to graduate with Computer Science degrees.

Source: American Enterprise Institute, December 6, 2018 Chart of the Day.

Subsectors like Alternative Care & Navigation show a higher-than-average prevalence in female founders. Fewer barriers to entry and a preference for care service-aligned missions could explain this high representation.

Similarly, Provider Operations is a prominent subsector in terms of female founder representation. Provider Operations encompasses a wide array of solutions to enhance the efficiency and accuracy of interactions between healthcare providers and patients, as well as among different providers. A 2019 McKinsey study found the healthcare industry as one of the most favorable for women professionals, including those in service provider and payer roles, suggesting that the healthcare provider sector presents relatively fewer barriers to entry for women than deep technology and AI roles.

We have invested in only less than a handful of companies in other subsectors; therefore, we cannot generalize the disappointingly low female participation in each.

where are all the women in computer science?

Data shows relatively higher female representation in certain types of technology, notably Data and Databases, Mobile Health, Connected Sensors, and Computing.

Four of the five investments we have made in Data & Database technology companies were founded by female founders. There is no straightforward reason behind this high participation. We guess that issues such as health disparity and health inequality are increasingly felt, and women are at the forefront of companies addressing them.

Additionally, female founders account for 22% of Mobile Health applications, about the same percentage of female CEOs in our dealflow. In our portfolio, these digital health platforms deliver a range of services, notably an app for menopausal symptoms and a platform for better surgical team alignment to improve perioperative quality, efficiency, and patient safety.

On the other hand, 40% of our portfolio companies use computing technologies, such as machine learning, deep learning, and natural language processing. However, out of our sixteen investments in this technology type, only three (18.8%) have female founders. Unfortunately, this is not surprising to us. A World Economic Forum report revealed that only 22% of AI professionals globally are female.

female founders are drawn to businesses with clinical impact

Breaking down our portfolio by clinical indication, we found high female representation in companies targeting more than one indication or none specifically (“General” indications, which is the most common for companies optimizing providers’ operations or making efficiency versus clinical claims) compared to little to no female representation in most specialty indications. For example, Radiology, Ophthalmic, and Cardiovascular are three specialties that cover 20% of our portfolio companies’ indications. Yet, there is not one single female founder on any of the companies’ founding teams.

On the contrary, out of our four portfolio companies in the Oncology space, half of them have a female founder. And for each of the two portfolio companies, the female founder is also the CEO. Interestingly, a 2022 McKinsey article reports that, in the aggregate, female conditions outside of oncology comprise less than 2 percent of the current healthcare pipeline.

Our working hypothesis is that women have succeeded in higher education, particularly in high-impact, mission-driven STEM-related fields like pharmacy, clinical psychology, biology, and medicine. In fact, women are now the majority of medical students and graduates. The AAMC published a table listing the percentage of active female physicians in each of its 48 specialty categories, in descending order of percentage female. Unsurprisingly, women tend to specialize in categories related to pediatrics, gynecology, and fertility medicine; in contrast, the percentage of women working in cardiology and radiology is lower. Our portfolio reflects this.

In summary, we backed eight female founders in specialty indications and five in general indications — meaning nearly 62% of female founders chose to start businesses that specialize in specific clinical indications.

the united states beat europe in female founder representation

Of our 12 portfolio companies born in the United States, one third has at least one female founder. Of our 27 portfolio companies born in Europe (including the United Kingdom), one quarter has at least one female founder.

This data suggests that the funding gap for female founders is higher in the European than inthe United States venture market, or the barrier to entry into entrepreneurship is. Certainly, there are cultural factors at play. Whichever the case, we see progress. In Europe in 2022, female-only founded startups accounted for 0.9% of overall capital invested; this year, this number has risen to 1.6%.

we cannot improve what we cannot measure

We acknowledge the limitations of our research. What we care about is diversity in leadership teams, and in an ideal world, we would collect diversity data (not just gender) of all founding teams for each and every company in our dealflow. We cannot measure that. Regarding dealflow, however, we can measure the diversity of the industry at the top of the leadership scale, confident that diversity in its CEOs should be a good enough measure of diversity in leadership teams — when the numbers are really large.

The collected data presented throughout this article shows us significant disparities in gender participation amongst founding teams in the health tech startup industry. At nina capital, we hope to progressively narrow the gender diversity gap through data, action, and advocacy. Additionally, we are proud to have made progress since our birth in 2019. Our first fund invested in 22 companies, of which 18% had a female founder. Our second fund has already invested in 20 companies, of which 35% have a female founder.

limitations of our research

we have a large internal data set of health tech startups, large enough to allow us to say that its characteristics represent those of an industry as a whole. However, the number of health tech startups in our portfolio is far from the threshold at which we could confidently make any conclusive statements — especially as soon as we start segmenting our own portfolio into specific subsectors, technology types, indications, and geographies. We will return to this analysis every time we add a new company to our portfolio, expecting our results to fluctuate, sometimes even greatly.
this article defines gender as “male” or “female.” Although limited to these categories within our analyses, we acknowledge sex and gender as fluid, non-binary variables. When unsure (when founders do not identify themselves as “male” or “female”) and in all cases when this very simplistic binary classification fails to represent reality, we chose the label “other.”
in our dealflow activities, we track the gender of only CEOs. In an ideal world, we recognize that tagging the gender of all founders would be ideal and more aligned with our belief — that gender diversity in teams is desirable and is the goal. Unfortunately, this would be unfeasible: in many cases, we cannot know who the founders are until we look at a capitalization table — and even then, we may not know their gender. We believe the gender statistics at the top of the leadership is a good enough proxy. When the numbers are really large, it is a reasonable measure of the diversity of the startup founders’ community as a whole.
good teams are diverse across many dimensions, not just gender. At some point, we tried to measure more dimensions of diversity. Unfortunately, our activity was subject to so many limitations that we deemed the data resulting from it unusable, so we stopped tagging.

let’s get to work

While there is still significant space for improvement, we are excited to continue to grow our portfolio and support need-driven, ambitious founders and CEOs — male and female alike. If you are a health tech founder or CEO who believes in the power of diversity in teams, please let us know about your startup by using the webform at www.nina.capital or contact our investment team at dealflow@nina.capital. To inquire about our research work on diversity, you can contact us at diversity@nina.capital

References & Further Readings