Let’s take a glimpse into the topic of gender disparity between venture capitalists (VC). Let’s talk underfunding of female-led startups and why women make up only 15% of inventors named on patents globally. Bleak statistics come as no real shock to this matter. Venture capital is an industry overgrown, and refutably dominated by men bringing their patent ideas to the forefront of local and global innovation.
The ‘Women in Venture’ Crunchbase report outlined a comprehensive study into women in VC. Their findings discovered that of the top 100 global venture firms, a mere 7% of partners were female. Similar data in this report found that 800 global, female-led startups received a sum of $4.9 billion in funding in 2020, representing a 27% decrease as compared to the previous year. Pair this decline in funding with the roughly estimated 3-7% of female-led venture capital businesses worldwide and what you have is a steep slope of interest. With a healthy $80 million invested into early-stage companies by the New Zealand Venture Investment Fund since 2018 alone, it’s not as if the sector is cash-strapped.
So, what’s the real reason women acquire less venture capital funding? In an existing COVID world the inevitability of companies stripping infrastructure to the bone is likely to cause business strategies being remodeled from growth to ‘let’s just make it profitable’. You would think investors would go with what they thought would make the most money – so does gender really have anything to do with it? Speculation presides over this one, “Fewer women in business, therefore fewer successful raising rounds, which means fewer opportunities for women to take their business models to market.”
Or perhaps the funding disparity between female and male VC’s are the result of a systematic shut-out of women in the investment realm. Let’s consider an industry poignantly lacking in gender diversity, a traditional understanding of leadership and entrepreneurship that values masculine characteristics such as boldness and assertiveness over less masculine approaches, and then add in an outdated process of pattern recognition used across the board to determine which factors yield the best outcomes.
The water seems polluted with unconscious bias. General lack of responsibility and the challenge in curating network connections for women in business makes it a hell of a lot more difficult for women to secure and appropriately scale funds to their venture capital.