Women founders only got 1.9% of venture capital in 2022, according to TechCrunch and PitchBook. Let that sink in a moment.

That means, 98.2% of all venture capital investments went to men. Women are over 50% of the U.S. population yet, the majority of the companies they founded are essentially blocked from getting venture capital funding.

This is despite the fact that women-owned businesses earn a whopping 63% higher return on investment than male-only founded firms, according to First Round Capital and Shelly Porges, Co-Founder and Managing Partner of the Billion Dollar Fund for Women, and Beyond The Billion.

Meredith Shields, Managing Director and Head of Citi Impact Fund blames this on bias in the investment decision-making process. She said bias is due to not enough women “directing traffic and asset allocation” in venture capital and private equity.

“The private capital markets in general, they're very, very relationship-based. They're very network-based. They're taking an exorbitant amount of risk usually…. (so) you're dealing in trust, and trust is something that has a high potential for bias,” she explained in an exclusive interview.

Dealmaker reported in April 2023 that impact investing has grown, that is the sector that seeks to have a societal impact with its investments, which includes criteria for diverse founders. Referring to research from Fidelity, Dealmaker said, “This sector has shown steady growth in recent years; globally, the impact investing market grew from $420.91 billion in 2022 to $495.82 billion in 2023 (a 17.8% compound annual growth rate).”

Yet, 65% of venture capital firms have no women partners, according to All Raise.

Citi Impact Fund is taking intentional steps to reduce bias in their own investing, Shields said. It includes steps during the investment decision-making process and collecting and tracking the metrics closely.

Read the full article about Citi Impact Fund by Joan Michelson at Forbes.