Women in venture capital

Women in venture capital or VC are investors who provide venture capital funding to startups. Women make up a small (usually less than 10%) fraction of the venture capital private equity workforce. A widely used source for tracking the number of women in venture capital is the Midas List which has been published by Forbes since 2001. Research from Women in VC, a global community of women venture investors, shows that the percentage of female VC partners is just shy of 5 percent.^[1]

One of the first women to make the list, Annette Campbell-White, has been cited as an example of discrimination in venture capital. She was mentioned in the Midas List for three consecutive years, from 2005 to 2007.^[2] She claimed that a number of firms in the 1980s ignored her senior management experience in Hambrecht & Quist.^[3][4] In addition to finding that women make up the majority of early technology adopters,^[5] Harvard Business School Professor Paul Gompers has stated that female venture capitalists consistently perform as well as males at large firms that have more than one woman.^[6]

Questions about how to increase the number of VC opportunities for women have been brought to the forefront by several events. One of them is a lawsuit by Ellen Pao against her former employer Kleiner Perkins Caufield & Byers. Another is Elephant in the Valley, a survey aiming to expose discrimination started by several women in business including Tracy Vassallo, a former partner of the same firm.^[7] Expressing criticism of existing funds, a number of women since 2007 have begun to start their own.^[8]

Statistics

Babson College’s Diana Report, research by an initiative working to increase the number of women entrepreneurs, found that the number of women partners in VC firms decreased from 10% in 1999 to 6% in 2014, though that number has recovered to 9.5% in 2018.^[9] The report also found that 97% of VC-funded businesses had male chief executives, and that businesses with all-male teams were more than four times as likely to receive VC funding compared to teams with at least one woman.^[10]

More than 75% of VC firms in the US did not have any female venture capitalists at the time they were surveyed.^[6] It was found that a greater fraction of VC firms had never had a woman represent them on the board of one of their portfolio companies. For comparison, a UC Davis study focusing on large public companies in California found 49.5% with at least one female board seat.^[11] When the latter results were published, some San Jose Mercury News readers dismissed the possibility that sexism was a cause. In a follow-up Newsweek article, Nina Burleigh asked "Where were all these offended people when women like Heidi Roizen published accounts of having a venture capitalist stick her hand in his pants under a table while a deal was being discussed?"^[12][13]

Effect on the technology industry

Makers of software and related products receive the majority of venture capital funding in the US.^[14][15] Since the dot com boom, venture capital has become almost synonymous with technology startups due to the large potential investors see in this sector.^[16] Regarding the shortage of women in the industry, some venture capitalists have called this a contributing factor to similar gender disparity seen in a wider range of Silicon Valley companies.^[17]

These Silicon Valley leadership positions are mostly held by men, with only 15.7% of board members being women, according to a report by Fenwick & West.^[18] This compares negatively to the 20.9% across all S&P 100 firms. These numbers drop to 11% and 16% respectively when considering executive positions.^[18] Industry scholar Vivek Wadhwa has proposed that another contributing factor is a lack of parental encouragement to study science and engineering.^[19] He has also cited a lack of women role models and noted that most famous tech leaders like Bill Gates, Steve Jobs, and Mark Zuckerberg are men.^[20]

2014 saw the release of several corporate transparency reports that offered detailed employee breakdowns. The largest contributors were Google, Yahoo, Facebook, and Apple, who respectively reported that 17%,^[21] 15%,^[22] 15%^[23] and 20%^[24] of their tech employees were women. Subsequent commentary in USA Today pointed out that "women are underrepresented in Silicon Valley — from giant companies to start-ups to venture capital firms."^[25] In October of that year, Bloomberg reported that Apple, Facebook, Google, and Microsoft attended the 20th annual Grace Hopper Celebration of Women in Computing conference to recruit and potentially hire female engineers and technology experts.^[26] That same month, the second annual Platform Summit was held to discuss increasing racial and gender diversity in tech.^[27]

Notable cases

The 2012 lawsuit Pao v. Kleiner Perkins was filed in San Francisco County Superior Court by executive Ellen Pao for gender discrimination against her employer, Kleiner Perkins Caufield & Byers.^[28] The case went to trial in February 2015. On March 27, 2015 the jury found in favor of Kleiner Perkins on all counts.^[29] Nevertheless, the case, which had wide press coverage, resulted in major advances in consciousness of gender discrimination on the part of venture capital and technology firms and their women employees.^[30][31] Three later cases, one of which was dropped, include lawsuits against Facebook, Twitter and Microsoft.^[32]

Possible solutions

Women are far outnumbered by their male counterparts in venture capital.^[33] Eileen Lee, cofounder of Cowboy Ventures, one of the most prominent women in venture capital in Silicon Valley, started a group with fellow women in venture capital who seek "to both mentor and increase the number of women founders and women in venture capital".^[34] Groups that advocate for women in venture capital and help them find positions in the field are seeking to break down gender biases and stereotypes that prevent women from succeeding in venture capital to begin with.^[34]

There are steps that can be taken within the venture capital field to help women in the industry. One of the ways in which more women can obtain jobs in venture capital is to increase the number of women in U.S. graduate school business programs. According to Joan Winn in her journal article “Women Entrepreneurs: Can We Remove The Barriers?”, one-third of the individuals enrolled in graduate school business programs were women.^[35] Many graduate business programs try to recruit women, yet are unsuccessful in doing so. Winn believes that if these universities were to cater their programs more towards women by accommodating their obligations to work and family needs, their percentages of women would be higher.^[35] Enrollment in a graduate business program would prepare them for the venture capital field.

Winn says that one of the main problems women face is a lack of funding or capital for their ventures.^[35] According to Fortune, funding for female venture capital founders was 2.2% of all venture capital dollars in 2018. Although women-founded venture capital firms are far less prevalent than male-founded firms, the disparity of the disbursement of venture capital dollars is high.^[36] The most plausible solution to this issue is to provide more funding for venture capital funds led by women. Having sufficient funding will generate more capital for their firms, allowing women to feel comfortable with making investments, especially where there is risk.^[37]

List of women in venture capital

Ellen Pao, who began her venture capital career at Kleiner Perkins Caufield & Byers, has also worked as an executive for Reddit, Flipboard and other technology companies.^{[38][39][40][41][42]}

In alphabetical order by last name:

• Jewel Burks Solomon, Collab Capital^[43]
• Elizabeth "Beezer" Clarkson, Sapphire Ventures^[44]
• Patricia Cloherty
• Soraya Darabi, co-founder of Trail Mix Ventures^[45]
• Jennifer Fonstad, formerly at Draper Fisher Jurvetson, founded Aspect Ventures with Theresia Gouw Ranzetta in 2014.^[46]
• Kathryn Gould, Foundation Capital
• Arlan Hamilton, founded Backstage Capital^[47]
• Ann Lamont (Ann Huntress Lamont), Oak Investment Partners^[48]
• Aileen Lee, Cowboy Ventures^[49]
• Jenny Lee, GGV Capital^[50]
• Jess Lee, Sequoia Capital^[51]
• Mary Meeker, Kleiner Perkins Caufield & Byers
• Stephanie Palmeri, SoftTech VC^[52]
• Ellen Pao, Kleiner Perkins Caufield and Byers
• Megan Quinn, Spark Capital^[51]
• Chelsea Stoner, VC at Battery Ventures^[52]
• Cathy Tie, Cervin Ventures^[53]
• Margit Wennmachers, Andreessen Horowitz

See also

• Diversity of Silicon Valley
• Sexism in the technology industry
• Women in computing

References

1. "Women and minority investors are taking matters into their own hands". Chicago Booth Review. Retrieved October 7, 2021.
2. "#24 Annette Campbell-White - Forbes.com". www.Forbes.com. 2007. Retrieved October 9, 2018.
3. Emert, Carol (May 12, 2002). "PROFILE / Annette Campbell-White / Trail-blazing venture capitalist does it her way / Startup specialist has carved out a niche in health care, biotech". SF Gate. Retrieved January 15, 2016.
4. Miller, Claire (January 25, 2007). "Where Are The Women Venture Capitalists?". Forbes. Retrieved January 15, 2016.
5. Bornstein, Julie (May 21, 2013). "Sephora CMO debunks a major stereotype about women and tech". Business Insider. Retrieved January 15, 2016.
6. Alba, Davey (March 20, 2015). "The gender problem in venture capital is really, really bad". Wired. Retrieved January 15, 2016.
7. Ziv, Stat (January 15, 2016). "The 'Elephant in the Valley': A new survey looks at the experiences of women working in tech". Newsweek. Retrieved January 15, 2016.
8. Claire Cain Miller (April 1, 2015). "Female-Run Venture Capital Funds Alter the Status Quo" (Dealbook blog). The New York Times. Retrieved April 2, 2015. "We're in the middle of a shifting trend where there are newly wealthy women putting their money to work, and similarly we're starting to have a larger number of experienced investors,"
9. Schubarth, Cromwell (January 2, 2019). "More VC firms have women partners but nearly 75% have none". Silicon Valley Business Journal. Retrieved March 21, 2023.
10. Brush, Candida (2014). "Diana Report" (PDF). Women Entrepreneurs 2014. Retrieved January 14, 2016.
11. Ellis, Katrina (2006). "UC Davis Study of California Women Business Leaders" (PDF). UC Regents. Retrieved March 25, 2015. {{cite journal}}: Cite journal requires |journal= (help)
12. Tam, Ruth (January 30, 2015). "Artist behind Newsweek cover: it's not sexist, it depicts the ugliness of sexism". PBS NewsHour. Retrieved March 21, 2015.
13. Burleigh, Nina (January 28, 2015). "What Silicon Valley Thinks of Women". Newsweek. Retrieved March 21, 2015.
14. Montini, Laura (March 11, 2014). "Top 10 Industries Raising the Most Venture Capital". Inc. Retrieved January 16, 2016.
15. Steiner, Christopher (April 1, 2010). "Top 10 Sectors Venture Capital Likes Right Now". Forbes. Retrieved January 16, 2016.
16. "What is venture capital?". VC Experts. Archived from the original on February 28, 2008. Retrieved January 16, 2016.
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18. Neate, Rupert (March 13, 2015). "Ellen Pao gender discrimination trial grips Silicon Valley". The Guardian. ISSN 0261-3077. Retrieved October 8, 2023.
19. Wadhwa, Vivek (May 15, 2010). "Fixing Societal Problems: It Starts With Mom and Dad". TechCrunch. AOL. Retrieved December 26, 2014.
20. Wadhwa, Vivek (November 9, 2011). "Silicon Valley women are on the rise, but have far to go". Washington Post. Retrieved December 26, 2014. This is one of Silicon Valley's most glaring faults: It is male-dominated.
21. Musil, Steven (May 28, 2014). "Google discloses its diversity record and admits it's not good". CNET. CBS Interactive.
22. Levy, Karyne (June 17, 2014). "Yahoo's Diversity Numbers Are Just As Terrible As The Rest Of The Tech Industry's". Business Insider. Retrieved March 24, 2015.
23. Williams, Maxine (June 25, 2014). "Building a More Diverse Facebook". Facebook. Retrieved March 24, 2015.
24. "Apple diversity report released; Cook 'not satisfied with the numbers'". CBS Interactive. Associated Press. August 13, 2014.
25. Guynn, Jessica; Weise, Elizabeth (August 15, 2014). "Lack of diversity could undercut Silicon Valley". USA Today. Retrieved March 24, 2015.
26. Burrows, Peter (October 8, 2014). "Gender Gap Draws Thousands From Google, Apple to Phoenix". Bloomberg Business. Bloomberg. Retrieved March 24, 2015.
27. Porter, Jane (October 29, 2014). "Inside the Movement That's Trying to Solve Silicon Valley's Diversity Problem". Fast Company. Mansueto Ventures. Retrieved March 24, 2015.
28. "Complaint of Ellen Pao" (PDF). Retrieved April 16, 2019.
29. Liz Gannes and Nellie Bowles (March 27, 2015). "Live: Ellen Pao Loses on All Claims in Historic Gender Discrimination Lawsuit Against Kleiner Perkins". Re/code. Retrieved March 27, 2015. That's the full verdict. No on all claims.
30. Sue Decker (March 26, 2015). "A Fish Is the Last to Discover Water: Impressions From the Ellen Pao Trial". Re/code. Retrieved March 28, 2015. We may look back at this as a watershed moment — regardless of how the very attentive jury comes out on their verdict.
31. Farhad Manjoo (March 27, 2015). "Ellen Pao Disrupts How Silicon Valley Does Business". The New York Times. Retrieved March 28, 2015. Ms. Klein argued that the Kleiner trial would become a landmark case for women in the workplace, as consequential for corporate gender relations as Anita Hill's accusations in 1991 of sexual harassment during the confirmation hearings of Supreme Court Justice Clarence Thomas
32. Streitfeld, David (March 27, 2015). "Ellen Pao Loses Silicon Valley Gender Bias Case Against Kleiner Perkins". New York Times. Retrieved April 1, 2015. In a sign that the struggle over the place of women in Silicon Valley is only beginning, gender discrimination suits have recently been filed against two prominent companies, Facebook and Twitter.
33. Greene, Patricia G.; Brush, Candida G.; Hart, Myra M.; Saparito, Patrick (November 26, 2010). "Patterns of venture capital funding: Is gender a factor?". Venture Capital. 3. An International Journal of Entrepreneurial Finance: 63–83. doi:10.1080/13691060118175. S2CID 155018065.
34. "This is how we get more women in venture capital". Fast Company. September 20, 2018. Retrieved April 1, 2019.
35. Winn, Joan (September 2005). "Women Entrepreneurs: Can We Remove The Barriers". The International Entrepreneurship and Management Journal. 1 (3): 381–397. doi:10.1007/s11365-005-2602-8. S2CID 154361071.
36. "Funding For Female Founders Stalled at 2.2% of VC Dollars in 2018". Fortune. January 28, 2019. Retrieved April 2, 2019.
37. "The Real Reason There Aren't More Women in VC". themuse. 2018. Retrieved April 2, 2019.
38. "Kleiner Perkins Trial Details Firm's All-Male Ski Trip And Dinner Party". Forbes. February 25, 2015. Retrieved March 6, 2015.
39. Ohanian, Alexis (November 13, 2014). "Reddit Blog: Coming home". blog.reddit -- what's new on reddit. Retrieved November 13, 2014.
40. Streitfeld, David (April 11, 2013). "Ellen Pao, Who Sued Kleiner Perkins, Joins Reddit". The New York Times.
41. Elias, Paul. Ellen Pao Lawsuit: Sexual Harassment Case Roils Silicon Valley July 19, 2012 Huffington Post (Associated Press)
42. "An old team at reddit • /r/announcements". reddit. Retrieved July 10, 2015.
43. "Jewel Burks Solomon". WSJ Women In. Retrieved September 19, 2021.
44. "Beezer Clarkson".
45. "Trail Mix Ventures". www.trailmix.vc. Retrieved April 16, 2019.
46. Boorstin, Julia (March 27, 2015). "In light of Pao: Where are women at top VC funds?". CNBC. Retrieved January 15, 2016.
47. Peck, Emily (September 18, 2015). "This Black Woman Is Turning The White Investing World On Its Head". The Huffington Post. Retrieved September 20, 2016.
48. Alison Leigh Cowan (October 16, 2006). "Not-So-Hidden Asset, His Wife, Is Force in Lamont's Senate Bid". The New York Times. Retrieved March 27, 2015. Now Ms. Lamont, one of the most successful women ever in the lofty realm of venture capital, is the not-so-hidden hand behind her husband, Ned, the political novice who managed to topple a three-term incumbent in the Democratic primary.
49. "The rulebook for being a female investor: don't complain | The Verge". theverge.com. March 9, 2015. Retrieved March 22, 2015.
50. Casserly, Meghan (May 2, 2012). "The Five Most Powerful Female Venture Capitalists". Forbes. Retrieved January 15, 2016.
51. "5 emerging female VCs you should know about". venturebeat.com. September 25, 2017. Retrieved April 16, 2019.
52. Volpicelli, Anna (August 1, 2014). "Meet the Bay Area's top female venture capitalists". 7x7. Retrieved January 15, 2016.
53. "Cervin Team – Cervin Ventures". www.cervinventures.com. Retrieved November 17, 2018.

External links

• A comprehensive list has been assembled by Women VC.