Large Gender Gap Persists In Venture Capital Deals, Study Finds

By Nancy Dahlberg
The Miami Herald.

Women entrepreneurs have made progress obtaining venture capital, yet a wide gender gap persists, according to a new study released by Babson College on Tuesday.

The amount of early-stage investment in companies with a woman on the executive team has tripled to 15 percent from 5 percent in the last 15 years, the study found. Yet 85 percent of all venture capital-funded businesses have no women on the executive team and only 2.7 percent of venture capital-funded companies had a woman CEO, according to the study titled “Women Entrepreneurs 2014: Bridging the Gender Gap in Venture Capital.”

The study was conducted by Babson professors leading the Diana Project, a program founded in 1996 to research women-led businesses globally.

The study analyzed 6,793 unique companies in the United States that received venture capital funding between 2011 and 2013.
Among other key findings:

— Businesses with women entrepreneurs perform as well as or better than those led by men. Businesses with a woman on the executive team are more likely to have higher valuations at both first and last funding (64 percent higher and 49 percent higher, respectively).

— Venture capital firms with women partners are more than twice as likely to invest in companies with a woman on the executive team (34 percent of firms with a woman partner compared to 13 percent of firms without a woman partner) and more than three times as likely to invest in companies with women CEOs (58 percent of firms with women partners versus 15 percent of firms without women partners).

— The total number of women partners in venture capital firms has declined significantly since 1999, dropping to 6 percent from 10 percent. Just 139 of the country’s 1,562 venture capital firms had women partners, at the time the Babson report was compiled.

Related News

Leave a Reply

Your email address will not be published. Required fields are marked *