We can keep discussing the problem as much as we want.
We can let people know about the $3M seed fund launched by Flybridge Capital Partners to back more female founders. We can consider it a first step. We can consider it enough. We can think of it, as Emily Green wrote, “like if the MLB offered to sponsor a Little League team for girls.”
In the meantime, women are still less likely to receive venture capital funding than men.
Women entrepreneurs are finding it increasingly difficult to access VC funding for startup businesses and remain much less likely to attract funding than male entrepreneurs, according to a new study published on Venture Capital: An International Journal of Entrepreneurial Finance.
In the study “The gender gap in venture capital. Progress, problems, and perspectives,” Babson College professors Candida Brush, Patricia Greene and Lakshmi Balachandra, together with Amy Davis, compared the proportion of venture capital funding received by men and women entrepreneurs in the U.S. Specifically, they searched for the word ‘she’ in the management team biographies of a database of US-based companies that received VC funding between 2011 and 2013.
Results were not encouraging. Despite some signs of progress, findings were that all-men teams were four times more likely to receive funding from venture capital investors than companies with even one woman on the team. This gender gap was even greater when leadership positions were considered: 97% of the total venture capital funding during the period studied went to companies with a man as the CEO.
Two of the reasons the authors noted were the entrenched male-dominated networks within the venture capital industry and well-established institutional ties, with few new firms being founded.
However, lead author Candida Brush emphasized the need for further research to get a full understanding of the reasons behind the gender gap.
“Future research might consider the extent to which deals are sourced through networks that include women entrepreneurs, or whether companies that have women on the teams must go through a tougher screen to succeed,” Brush wrote.
Photo courtesy of Babson College.
