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October 05, 2009

The VC Gender Gap - Are VCs Sexist?

I find the preponderance of males in VC an annoying and stubborn phenomenon.  When I first entered the start-up game as an entrepreneur in the mid 1990s, I didn't think much of the "VC gender gap" as there were plenty of women executives around.  In fact, between one third and one half of the executive teams at my two start-ups (Open Market and Upromise) were women.

As the father of a capable, ambitious daughter, perhaps I'm over-sensitive to the issue, but since becoming a VC seven years ago, I find it amazing that only 5-10% of the VC industry is made up of women.  Only 25% of all VC partnerships have a single women partner and only 7-8% have more than one women partner.  Anecdotally, even fewer women are "management company GPs" as opposed to "employee GPs" - in other words, true owners of VC funds as opposed to deal partners.  What other major industry remains 90-95% male-dominated?  What's the deal?

An outstanding Kauffman Institute study, “Gateways of Venture Growth”, analyzes this issue and comes up with some thoughtful but unsurprising conclusions.  They point out that the industry remains very clubby, and the lack of female role models creates a self-perpetuating cycle. Professor Myra Hart of Harvard Business School writes, “Women trying to launch or further careers as VCs have fewer first-degree connections with those (men) in positions to hire or promote them.”

Another issue that holds women VCs back is the fact that the academic backgrounds of VCs tend to be in technical areas, such as computer science, engineering and biotechnology where, again, females are in the minority.

In talking to my women VC friends, they reinforced these two major issues, but held out some cause for optimism going forward.  Irena Goldenberg of Highland Capital in Europe (an formerly an associate with us at Flybridge Capital before she went to HBS and then Geneva), believes there are more female VCs in life sciences as the medical field has a higher ratio of women to men then, say, engineering.  Our senior associate, Robin Lockwood, told me she thinks VC profiles simply lags entrepreneur's profiles.  As more women entrepreneurs emerge, more women will become VCs.

Here's a thought-provoking observation that an anonymous woman pointed out to me (and please do not accuse me of channeling Larry Summers on this - I'm just passing along what I heard):  she believes the VC industry is male-dominated because men are more wired to take risks than women.  Gambling, she points out, is more popular amongst men than women.  Thus, risk-taking with capital is more likely to be comfortable for men than women.

Some women have been able to break out as strong investors and industry leaders.  In my informal survey, a few experienced women VCs stood out as strong role models:  Venetia Kontogouris at Trident Capital, Annie Lamont at Oak, Patricia Nakache at Trinity and Nancy Schoendorf from Mohr Davidow.

I guess when you have a clubby, tightly-woven, self-perpetuating network, it's hard for women to break in.  It's a stubborn phenomenon, but I hope we can figure out how to correct it.  Otherwise, our industry is tragically losing out on 50% of the world's best talent!

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I am really glad you bring up this topic! This not only applies to who works for VCs, but also who VCs back.
I don't have a daughter yet, but I think about how some day the world may be like for her, if I am blessed with one or two. I also watch my wife, who has amazing credentials in the world of science (she is a postdoc at Harvard working on adult stem cell research). From what I have seen in my 12 years of working for startups and 7 years of watching her in sciences is that sexism is live and well. To be successful you have to put in the extra effort (and grow extra thick skin) to handle male chauvinism. Some things have gotten better, but much is still the same.

Another point, many investors will not put money in companies founded by a team of women (Daily Grommet comes to mind). This only perpetuates the vicious circle. In the world of Angel and VC, if you don't support women entrepreneurs, a lot fewer will succeed and later join your ranks.
If your networking consists of golfing and some other male-centric activities, how many women do you think will join and do well.

Is that the kind of future we want for our daughters?

P.S. And re. women being risk-averse. BS! Women just take risks differently in less blind and more calculated ways.

I don't have to reply - previous post has virtually made ALL of my points - thank you ; ). As a female who has worked for two VC-backed start-ups (one of which was backed by Flybridge) I have a few suggestions (many of which are pretty standard practices at most companies):

Step one - consider females for roles on your management teams. Look at resumes and past experience versus if they are connected to someone you know. If you have a male-only team, chances are you overlooked some female talent along the way.

Step two - do not form a hierarchy where more experienced females are reporting to less experiences males. Very bad for the bottom line, not to mention turnover.

Step three - do not hold bonding events that are designed for male management and staff - ie basketball, weekend get-a-ways, field trips, parties at each others' houses. This not only has a strong alienating effect on the rest of the team, but when the boys play together they get competitive, and someone always breaks, sprains, or tears something - it's not worth it all around.

Step four: do not hold separate events for "the staff". No matter how nice they may be, it still feeds into an us/them atmosphere. When you become a multi-billion dollar company, you can rethink this.

Step five: allow "the staff" to speak at meetings - this actually includes both males and females. Management should not be sole speakers at each meeting.

I don't think that educated women who go to business school, or become engineers are less risk-adverse than men.

There are plenty of female wealth creators out there, but they tend to take a different route than through VC.

Thanks for taking the time to post on this important topic. On the bright side, there seems to be a healthy trend of women entrepreneurs/VCs around town networking formally and informally to support each other. (This was probably helped even more by the economy over the past year.) The big challenge we discuss often is how to ensure there is an upcoming generation of women in Mass. who can gain access to the capital and resources they need. We haven't determined whether there should be a Ycombinator or TechStars type of model primarily run by women for women, but would love to hear ideas if folks have any to share.

Great post - this topic is continually intriguing.

If I were to note another contrarian viewpoint (similar to the risk profile observation), I might say that VC is still largely about the transaction (i.e. the deal side of the equation). Men love the hunt and the adrenaline of catching the best deal out there. Perhaps women care more about cultivation and less about the hunt. Perhaps their passion is in building great companies in a shoulder-to-shoulder approach. The role of a VC partner (particularly of a mgmt company GP) is really not about being this close to the company build – the logistics are not organized to foster this type of relationship. You may argue that early stage VC’s offer a heavier touch than later stage VC’s and I would agree with this logic. But given that an established GP has anywhere from 4-10 investment companies under his arm, he (or she 5 % of the time) just doesn’t have the time to really get into the trenches with any one particular company.

Just a another thought to ponder....

Great post. Thanks for starting the conversation.

I work in VC and when I joined my firm (BVP) I was the only woman in the firm. I'm proud to say that BVP now has two other women working on the investment side of the house, but it still never ceases to surprise me how few women there are in VC.

First, let me reject out of hand the thought that any natural disposition of men vs. women to risk taking might be part of the reason why there are less women in VC. That's just silly. If that argument was being made about the lack of female entrepreneurs, there *might* be something there, but you don't need to be risk loving to join VC. It's a pretty cushy job and you are making rational investment choices (much like working at a hedge fund or a PM shop).

I think the main reason is what you outlined -- the clubby nature of VC. It reminds me most of the struggle to get more women in tenure. The problem is, when you imagine who would be good at a job, you're really imagining who you know and would like to work with. When you're starting with a homogeneous group, it's more likely that the next generation of that group will be homogeneous, but hopefully not as homogeneous as the first group. Then the third generation is also homogeneous but once again slightly less homogeneous, etc.. It's a slowwwwww evolution but I hope we're getting there.


Thanks, Sarah. It is still a young industry, but progress has been very slow indeed. Thanks for rejecting the risk-taking argument. I don't find it very credible either.

Great post. I hope the world sees the correlation between VC make-up and the make-up of the management team of companies they fund.

Jeff- Good post. The answer is yes. Leveling that playing field was certainly part of the original thesis of the Kauffman Fellows Program. ALL of the women VC partners I know are Fellows alumni.

An interesting statistic that provides insight, but raises as many questions for the venture industry as answers: In research by Myra Hart, Harvard University, "Gatekeepers of Venture Growth: The Role of Women in the Venture Capital Industry" it was shown that VC firms with at least one woman in the partnership (not associate level) were 70% more likely to have a woman in the portfolio.

Jeff, great post. As has been mentioned, I don't think VCs are inherently sexist, the male:female ratio, I believe is borne out of the ratio of females that apply to CompSci/Egineering courses that seem to be the stable ground for startups or VCs (http://www.cdixon.org/?p=848)

A statistic I'd like to see would be the number of partners that are non anglo-saxon. Black partners in VC seem are almost unheard of; I wonder why this is? Besides Bernard Dalle of Index Ventures, I don't know any other VCs that are black.

Whenever i see the word "gender gap", I am only reminded of what my friend mentioned,"This world is ruled by men with rules created by men." :)

I am not in VC Industry. I am a female techie and MBA Applicant with future aspirations in VC Industry. The problem outlined here is common across all industries where women want to get to the top. And the only reason is the clubby nature of men in management.(Infact, i think this is much less at the entry and middle level. Maybe because here hard skills matter more than soft skills!)
Infact, One of the biggest concerns i have is, how to get into the men's gang while balancing the professional distance. Because, this is the major way to get the first level network contacts and make it lasting. And, from my experience till date,it's extremely difficult.

Also, from my experience, women are better in detecting problems and taking calculated risks. This HBS article is just one instance of reasoning. So, the genetic difference of hunting and home making is so centuries old and not applicable now. :)

btw, one interesting observation. I have seen many male counterparts getting this gender gap realization immediately after having a girl child :)

Thank you for addressing a question I have pondered. Recently, I asked a friend who manages a private equity firm if his industry was a "boy's club" after spending some time researching this industry. While this is apparent in VC firms, it seems even more so in private equity -- which raises another set of questions.

I am glad to see that the idea of risk-averseness was thoroughly rejected early on in the comments. Like other commenters, I don't find it at all surprising that there are fewer women in venture capital given the strong "club" aspect. I don't suspect an inherent sexism in the industry, but rather a lack of incentive for resisting or challenging the status quo (initially created by the club) by those benefitting from it. I've noted that it is rare that a person who benefits from the status quo will initiate action to change it barring some sort of personal disruption or moral conviction.

Now, that the industry appears to be in a state of disruption, I wonder if the reinvention process will open more entrance opportunities for women? It seems that some of the criticisms of the industry would be rectified by the inclusion of more women. For instance, would a female VC tend to develop a closer and more nurturing relationship with a portfolio company than a male counterpart? Would the proverbial "women's intuition" enhance the due diligence process?

One way this issue might be addressed closer to the source is by involving a woman in the firm's recruitment efforts, both internally and for portfolio company management teams.

Thanks, Donna. Very interesting questions. I'd love to see some research here, especially on portfolio company management. I do think the industry will get more open with time. Then again, I'm an optimist!

Great post - as a female management team member of a venture company I have met with my share of VCs. Generally I found them to be more interested in performance metrics and growth potential then my gender. Then again you get the occasional oddball such as the VC who asked when I planned to have children as it was, "important [for him] to understand my dedication to the company". But those types of comments are what the VC dance is all about - finding the right fit. VCs who ignore or dismiss female led companies will simply find themselves with less and less qualified deal flow as more women are moving into founder and management positions.

Funny Linda, I am a woman starting a TechStars-like model in Dallas. While we won't focus solely on women, I will make an effort to reach out to female entrepreneurs. My journey has included many of the things written in the comments here, but it is all worth it to do what I love.

I was pleasantly surprised by the number of female entrepreneurs at Capital Factory in Austin. It was not by design, they just happened to stand out during the application process. You might get their feedback (both the founders and Cap Factory).

Great to hear about this effort, Gabriella. Would love to hear about other efforts and resources out there.

The issue of female entry and success in a male dominated industry is not new. I agree that piercing a male social network and lack of female role models are road blocks but I disagree that men are “wired” for risk taking. This sounds like “risk taking” is genetic. I think a factor to recognize is that men and women learn who they are and how to act through role modeling and the expectations of others at an early age. This identity then becomes reinforced as their lives proceed.

It seems the barriers that exist for women leaders in VC firms may be parallel to that in law firms. The demands placed on rising through the ranks for women in these types of firms conflicts with their family role. The expectation of long hours and to be available 24/7 can serve as barrier to women because of the incongruity with their family life.

I applaud Jeff Bussgang for tapping into all available talent without regard to gender. I’m curious if the females in the VC industry have the same kind of exposure to high risk - high reward business opportunities as men?

Hey, Jeff.

I grew up in a household where my mom was the dominant business figure so I share your sentiment for wanting more balance. I think partnerships would benefit from more of a female perspective in decision making.

I think there are many complex reasons why less women get into VC in the first place, but I think there is another huge reason you don't have many woman VC partners and that's the travel requirements and lifestyle.

I only have to look as far as my own household and office. My wife is a Brown undergrad, a Wharton MBA an alum of Accenture Strategy, Google and has worked on strategy teams for Virgin and BSkyB (UK). She used to hold high profile jobs but when we had kids she decided that the travel requirements would dictate the kind of job she wanted.

In our office we had a very smart and capable female associate named Dana Kibler. When she had her 2 kids and looked at the travel requirements and hours of the partners she decided to become our partnership's CFO in stead. I really enjoy having her presence in partners' meetings and involved in the debate about where we invest our money.

The truth is that women not advancing to become CEO's, VC partners, etc. is a combination of many facts including historic biases that remain in some place. But it is also a legitimate effect of the lifestyle that is required at senior levels that is not consistent with what some women want from their lives when they reach the child rearing ages. No value judgment - I think it just ... is. Shame, really.

p.s. Dude, you gotta widen your columns here! A bit too narrow to write anything that looks anything short of a novel ;-)

Thanks, Mark. Good comments. I would think the VC lifestyle could be a better one for women then, say, investment banking or management consulting. If you are located in Silicon Valley or Boston or NYC, you don't necessarily have to travel all that much, particularly relative to those careers. Management consulting, in particular, has responded by creating more 50% or 75% partner job opportunities to assist with lifestyle management. I wonder if VCs will do the same down the road.

Given that VC's have a background in technology and business, this is not surprising. When I graduated from NU with an engineering degree in the early 1980's, it was 80% male. I recently had a meeting with some Northeastern professors and it is still above 70%. When I graduated from HBS, in the 80's, it was 75% male. I believe it is still the same. My oldest daughter just started at Worcester Polytech; 73% male. The changes are rooted in the educational system...

Great topic! So... I have only one question after reading all the great posts: What practical advice can you offer? If you're on the outside interested in getting in, how do you do it? Is the traditional route (strategy consulting, MBA, start up) the only way? There is evidence to suggest that a diverse set of talents delivers better results. This would seem to offer an incentive to reach outside the normal sources of talent. Thoughts?

I'd recommend you get to know the junior women VCs in the industry as well as the talented young women entrepreneurs while pursuing whatever path you are most passionate about (entrepreneur-track vs MBA/apprentice-track).


There is a wonderful organization based in NYC called Golden Seeds. I found their mission statement a great summary to share here: Golden Seeds plays an instrumental role in supporting women to utilize both their intrinsic and financial capital to its full potential. We identify and invest in women-led ventures with the potential to grow into multi-million dollar business while enabling accredited investors to invest alongside us. We provide entrepreneurs with strategic business advice as well as access to funding and the tools to enable them to grow into multi-million dollar businesses.

Without trying to offend anyone, most female choose not to get involved in business, nor taking jobs as CEO's. I belies that most women (not all of them) have the maternal and family gene much more developed than the business gene. Unfortunately you can't have them all as far as time is concerned, even if you could from all other perspectives. Therefore I believe that women prefer not taking so time-consuming and self-absorbing jobs. Plus, we do live in a misogynists' world(I mean both men and women from the business field)and this does not make things easier for women. Here's a large list of VCs www.vcgate.com Anyone care to see how many of them are women?

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