Women, COVID and Venture Capital

Has COVID slid women’s progress back? A few reports have shown that in fact less women are getting funded and the initiatives to get more women funded hasn’t exactly worked either.

I can answer all the why’s starting with the faces on the other side of the table. Most VC firms are still men. Many men who were part of the C-team in companies that have exited find themselves raising capital to invest. Women need to be doing the same thing. We need more women on the investing side of the table who are committed to investing in women.

Here are some stats sent to me from a female partner at Hannah Grey.

  • 5.6% of all VC firms in the US are women-led, and only 2.1% of VC firms are founded by a woman of color.
  • 4.9% of all VC partners in the US are women; and only 2.4% of them are founding female partners.
  • 73% of all women-led firms were founded in the last 5 years (since 2015): massive growth, but also not enough time for portfolios to mature for an outsized exit. 

What these stats say to me is the impact over the last 5 years is that women are beginning to rise up in the investment world. It also says to me that there aren’t enough and that opportunity is tremendous. If we continue at this pace it will take centuries to make significant change.

There are many women who have jumped into venture but not enough. We need to bring on more women associates who put out their hand to other women thinking about getting into the world of investments and make investing in women a priority. Women need to push their firms to invest in in female led diverse companies. To make it a priority to go and find them.

Most important we need to follow the money. Limited partners who manage large amounts of cash such as universities or state retirement funds need to change the narrative by putting capital into female funds and diverse venture funds. The data shows that diverse companies including diverse funds out perform mono-cultural funds.

I have been talking about this for 15 years. Let’s not slip backwards because of all the white noise around COVID. We need to continue to support women in their businesses and in venture funds so we find ourselves looking a lot more diverse when we get to the other side.