The Hypocrisy of Meritocracy in the VC World

Marissa Spano
Jan 24, 2019 · 2 min read

Less than 1/50th of VC funding goes into woman-owned businesses

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This is usually what the other side of the desk when startups pitch for funding.

When talking about financing for early-stage ventures we’d all like to believe there is a meritocracy — all are equal given an equal chance to funding; but that’s not the case when talking about women looking to raise funds. The unconscious bias that exists overrules everything from the pitch deck being sent to your last meeting where you usually hear, “I think this is a great idea but my colleagues aren’t on-board.”

Startups should be judged on fair scorecards with terms that validate a model based on potential not performance, which is not usually how women are judged. It may be of surprise to learn that just last year venture capitalists invested $58.2 billion in all-male founded companies with a mere $1.46 billion in female-founded companies. It’s not the number of deals being put in front of them either because the average deal size was also significantly lower for women. This resulted in 16x more funding dollars put into male-owned companies.

What’s even more stark is the delta between the percentage of funded deals when taking gender into account — out of all vc funding, women-owned startups receive a mere 4.94% (which, sure…is up from 2.5% ten years ago), and also the highest it’s been in the past decade. A very obvious pay gap still exists in corporate America, which puts more emphasis on the imbalance in both pay and funding for women — and if women accept this disparity, the movement for merit-based funding and equality in pay back years.

Meanwhile, in everyday life, women of color (and women overall) account for more of the budding entrepreneurs than any other group; so how do we fix this problem? Google has implemented traning for their employees which help neutralize the playing field, but if VCs don’t recognize the problem then how do you find the solution(s)? Sensitivity training is great, as are communication skills, but teaching fairness and seeing past the WBC (white-boy club) of venture capital will definitely take some influncers doing the work as well as activists and educated citizens. Who’s in?

And, for some perspective, I found this incredible post.

The BOLD TYPE

All Things Brave

Marissa Spano

Written by

Founder @ VENM, The Brave. Outlier by nature. Award-winning entrepreneur by profession. Pragmatic activist/ upriser at heart. Challenging status quo since 1977.

The BOLD TYPE

Fundraising, inclusion, entrepreneurship, motivation, and changing the game one player at a time!

Marissa Spano

Written by

Founder @ VENM, The Brave. Outlier by nature. Award-winning entrepreneur by profession. Pragmatic activist/ upriser at heart. Challenging status quo since 1977.

The BOLD TYPE

Fundraising, inclusion, entrepreneurship, motivation, and changing the game one player at a time!

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