Gender diversity in the VC ecosystem: discussion with Anne Germain from Bpifrance

In the run-up to the WVC:E (Women in Venture Capital Summit: Europe), the first pan-European event for women in VC, we discussed gender diversity in venture capital with Anne Germain, senior investment director within the venture capital fund of funds team of Bpifrance, emphasizing that increasing diversity will require a convergence of efforts between GPs and LPs.

Lack of gender diversity in the VC ecosystem: from Anne Germain’s observations to statistical facts

Gender diversity in management and founder teams is an area of focus for Bpifrance, especially since the sector statistics show that there is still much work to do. Without a statistical study focusing solely on the French venture capital ecosystem, we will be referring to the study published in July by France Invest on French private equity, which also reflects changes in venture capital.

While the proportion of women in analyst/associate positions rose to 38% (vs. 28% in 2010), highlighting the recruitment efforts put in place by funds, the percentage of women at the partner level remained at 11%.

As explained by Anne Germain, there is still a long way to go before we can envision parity at all levels of venture capital funds. These findings highlight both the shortfalls at the time of recruitment and the difficulty of retaining female talent. France-Invest gender study confirms these two trends at play.

(1) The investment ecosystem is struggling to attract women. In France, women represent less than 27% on average in investment teams, a percentage that is equivalent to the figure measured in 2020. However, recruitment efforts are made, particularly at the analyst/business manager grade, where women represent 40% of new recruitments.

(2) Women currently working in investment firms are less likely to stay. The proportion of women continuously decreases as they move up the hierarchy. While the proportion of women at the associate level is 22%, the proportion of women on management boards/executive committees of funds is 17%. There is a real challenge for funds to retain female talent. Women who enter existing funds at analyst positions face difficult career choices and lack support from women role models/mentors in the industry at principal/partner positions. Their career prospects might seem limited, considering the low number of women partners in the venture capital ecosystem.

We quote French studies here, but the problem is pan-European.

Bpifrance’s action to increase gender diversity

Regarding gender diversity, Bpifrance’s action was first directed towards women entrepreneurs, with several initiatives to support access to funding and entrepreneurial know-how. When it comes to women’s representation in venture capital funds, guidelines are yet to be formalized, but in practice, the reading framework has evolved.

As Anne mentioned, when sourcing and screening, particular attention is paid to the composition of the investment and management teams. The proportion of women in the investment team, especially in leadership positions, is scrutinized, and funds with unbalanced gender ratios are strongly encouraged to hire more women.

These commitments align with those made by Bpifrance to increase the number of women in its teams. For the past years, the focus has been on finding a diverse pool of talent to choose from and targeting gender parity when hiring new candidates. As a reminder, in agreement with the French Rixain law of December 2021, Bpifrance set a threshold of 30% of women in project selection committees in 2022 with a 40% target for 2026.

Bpifrance also contributes to supporting gender diversity as a supporter of women-led first-time-funds. From the Bpifrance portfolio, one can mention Revaia and Korelya Capital as examples. Revaia was founded by Alice Albizzati and Elina Berrebi in 2019, whereas Korelya Capital was founded in 2016 by Fleur Pellerin. As noted by Anne Germain, these examples are few, but they serve as precursors for the new generation of women investors.

Looking at the first-time European VC funds, diversity also varies depending on sectors. While many gender-balanced founding teams have taken up diversity and sustainability verticals, few first-time funds in the web3/crypto, deeptech, or fintech verticals had women in their founding team. We hope those new investment verticals will open the door to a more diverse VC landscape and create more opportunities for women in investment teams.