Gender and Venture Capital Lead Investors: Why does it matter?

According to Crunchbase in 2017, only 8 percent of venture capital (VC) partners of the top 100 VC firms globally were women. According to a recent study conducted by Gender Metrics , an even smaller percentage of women act as lead VC investors. This gender disparity is impacting which entrepreneurs get funding as well as how funded companies develop and grow.

Why focus on lead VC investors? Lead VC investors tend to exert the greatest influence on investment deals: they set the price and terms of the investment, take a large part of the round, and usually represent the entire funding round on the funded company’s board.

Research data on lead VC investors for Early Stage investments made in the United States (2012 – 2016) was compiled using the Pitchbook database. The bubble graph provides a visual representation of the study’s results. Each bubble represents a VC partner lead investor. The size of the bubble indicates the overall number of deals per lead investor. Female lead VC investors are represented by green bubbles and male lead VC investors represented by blue bubbles.

The total sample of 283 VC partners includes 38 female VC partners (13 percent) and 245 male VC investors (87 percent). The highest number of deals by a single lead investor was 122. Two male VC partners reached this level of deals in 2012 – 2016. The highest number by a single female VC partner was much lower at 56 deals.

It is also critical to note that during this time period, the vast majority of female VC partners (63 percent) were not active as lead VC partners in any of the VC deals made. In comparison, a much smaller percentage (38%) of male VC partners were not active as lead VC partners.

These preliminary results indicate that in terms of VC deal impact, women are playing an even smaller role than would be expected when looking at the total numbers of female VC partners. In other words: Measurement matters –  VC headcount and VC deal impact are not the same.

Solution? Creating more VC firms founded, funded and focused on women is part of the solution. Increasing the numbers of women VC partners in existing VC firms is another part of the solution. Increasing the numbers of women VC partners active as lead investors in VC deals must also be an integral component for tipping the scales toward gender parity.

What else? Real change needs to incorporate tracking and benchmarking mechanisms: Tools, metrics and measurements that take into account the entire scope of VC firm activities.

For further information including later stage investment results click here.

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