When most people hear the term “gender pay gap,” they automatically think of the difference in pay between women and men doing the same or similar jobs, whether in low wage service work or upper reaches of management.

But there’s another kind of gender pay gap few even know about—the venture capital gap. Venture capital (VC to insiders) means money wealthy people put up to help promising businesses to make it to the top. Think of VC funds as organized “clubs” where the members (called partners) are high net worth individuals. There’s a hierarchy of partners. Only those at the top level are the “deciders” when it comes to which companies actually get the dough. They can go by a variety of titles; for simplicity’s sake we’ll call them principal partners.

A 2020 report by Women in VC—the world’s largest community for female investors—found that only 5.6 percent of U.S. venture funds had at least one female principal partner.

So lack of female partners who are decision makers is problem number one, which leads to problem number two—the very small percentage of female headed companies chosen for funding.

Just like men, female entrepreneurs looking to grow their businesses by taking the companies public very often need a cash infusion to do it. That’s where VC funds come in.

But VC is a place where the gender money gap is far wider than the 20 percent overall usually cited in the employment statistics. Of the more than 2,000 U.S. companies going public between 2013 and 2020, only 18 were female-led. There are no reliable statistics by race/ethnicity, but those in the know put Black women at less than one in a hundred of that 2 percent, and Hispanic women even lower.

Read the full article about venture capital's gender inequity by Martha Burk at Ms. Magazine.