Women founders are outperforming their male counterparts. Yet, not a week goes by without another headline about the growing gender gap for both founders and funders. Quarterly venture funding for female founders dropped to a three-year low with women getting only 2.7% of the VC dollars despite the average annual revenue from women-led businesses increasing by 68%.
Shockingly, only 5.6% of US-based VC firms are women-led, and only 2.4% of all VC partners are women. There is strong evidence that proves female-managed US funds outperform all-male rivals, even when accounting for risk and COVID-related market swings. Of all US VC firms that ranked in the top quartile between 2009 and 2018, 69.2% of them had women in decision-making roles.
In spite of this compelling data, it will take two and a half centuries for female fund managers to achieve equal status to their male counterparts at our current rate of progress.
So, how do we close the gap before 2200 AD?
Rachel Goddard, special counsel at Cooley LLP, says:
In order to consciously direct more angel and institutional capital to women-led funds, we need to understand the root of the problems and commit to solve them. The problem is broad – women are not yet fully integrated into the venture capital ecosystem. The reality is that most startups and funds lack diversity, particularly in leadership roles, so there’s a tangible need for standards and better tracking to measure success and accountability.
Read the full article about women founders and funders by Eli Walker and Sophia Platt at Forbes.
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