Are Venture Capital Firms Ignoring Women? Let’s Have a Look

The disproportionate gender ratio affects the women entrepreneurs in building nexus within VC firms as the venture capital is a highly male-centric domain
  • BY Jaspreet Kaur

    Feature Writer, BusinessEx

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  • Jan 22,2019
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  • 12 Mins Read

As 2018 begins, significant changes are viewed in the business sector. Considering the Venture Capital, the market continues to soar and evolve in the current year. Pitchbook, an investment data research firm, forecasts venture capitals market and said that new participants in VC will thrive and median angles, as well as seed deal size, climb upward. Encroaching figures and companies in venture capital showcase prevalent optimism in the sector. On the flip side, gender inequality is greatly persevered in the VC firms owing to which, a marginal number of female workers are able to become female founders.

In 2017, Fortune’s magazine article unveiled that merely 2 per cent of venture capital dollars went to female founders. This manifests the decreasing rate of women participation in the sector and lack of consideration to women founders when they are seeking investments. The disproportionate gender ratio later affects the women entrepreneurs in building nexus within VC firms as the venture capital is a highly male-centric domain.

Struggles Women Face In Venture Capital Firms

Owing to strict gender uniformity in VC, female rarely expects proliferation in the firms. Even, the recent admission of the female workers in VC firms has not brought many significant changes. Women in VC firms are mostly designated lower rank jobs and further, an obstruction called glass ceiling is widely prevalent to hinder their growth.

Similar to the US, the Swiss market sees marginal growth in female workers. Swiss Venture Capital Report 2018 states that for the first time, we also examined how many of the start-ups have female decision makers. Of the financed companies, 45per cent have at least one woman in top management or on the board of directors. These companies received 76per cent of the total invested sum. However, only 10 out of 175 start-ups have a female CEO: these companies received about 2per cent of the investment.

Peggy Johnson, Vice President Executive of Microsoft, is an influential female leader in the present times. In Fortune’s Most Powerful Women Next Gen summit, Johnson shared her struggles that she had faced in the former workplaces. Despite being a female, Johnson was an introvert as well which affected her relationships within the workplace and hid her entrepreneurial skills for a long time. However, she was good at establishing fortified teams and this hard work took her to a great height eventually.   

Likewise, other female dignitaries such as Arlan Hamilton (founder of Backstage Capital) and Sutian Dong (Partner of Female Founder Fund) are coming forward and enticing women to increase participation in VC.

How To Beget Diversification In Venture Capital Firms?

The lack of women participators creates a dark image of the venture capital market. For encouraging female workers as well as female founder, VC firms should adhere to production methods to stabilize gender ratios and embrace new energy in the endeavours.

  1.    Recruit More Women In Organizations

For incrementing female demographic in the workplace, it is imperative to recruit more women as well as minority classes. By telling women counterparts of various job opportunities and encouraging them to opt-in the competitive world will be an initial step to beget diversity.

  1.    Finance Female VCs

In the business ecosystem, there is still a marginal portion of female founders. Currently, their number is limited to a negligible share of 2 per cent. For expanding the size, it is important to fund women-led organizations and further, guide them across the trajectory.

  1.    Invite Women Investors

Since the VC market is highly patriarchal, thus, there is less room for women entrepreneurs to thrive. Similar to the male founders, female founders require a push in the form of capital and mentorship. For this, female investors should come forward and back up female-led organizations.

Implying these practices can help create diversity in the venture capital firms.   

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