When the item comes to Venture Capital, there’s a financial incentive to close the gender gap: Greater diversity yields higher returns. Startups using a female founder generated 78 cents of revenue for every $1 of funding, while male-founded startups generated 31 cents, according to a BCG study of 350 startups.
however despite the financial argument for diversity, just 17 percent of startups within the U.S. last year had a woman founder, according to Crunchbase. Two percent of VC funding went to female founders, according to Pitchbook.
One reason such a little percent of funding goes to women founders: Just about 9 percent of partners at VC firms are women. Three quarters of U.S. venture firms don’t have any female partners at all.
“We have a long way to go to get to parity,” said Beth Ferriera, Managing Director at FirstMark Capital, at Fortune’s Most Powerful Women Next Gen conference in Laguna Niguel, California, earlier This specific month. ” however we are seeing a shift within the conversation along with more people talking about [not] only funding female founders, however thinking about who are the funders around the table.”
At Ferriera’s last fund, WME Ventures, half of the investment team was female, along with half the investments were in female-led companies, including Glossier along with Daily Harvest. She says she benefited not only via her personal perspective on the businesses targeting women consumers, however also her ability to connect with female founders.
“We had a great pipeline of women-led businesses, along with I think we were able to see these opportunities along with see the vision of these women. along with also when those deals became competitive, we were able to build relationships with those founders that will maybe some of our male counterparts were not able to.”
A growing number of organizations focused specifically on closing the funding gap have emerged within the past year. All Raise will be focused on driving success for women in Venture Capital, both as funders along with founders. #Angels helps educate VCs along with startups on the value of bringing women into startups early. the item’s also focused on educating investors on how more diverse teams help yield higher returns.
“Our little cottage industry made up of little firms are highlighting the importance of diversity. They are finally getting the item, along with for that will, I am ecstatic,” said Maha Ibrahim, a partner at Canaan. “We’ve got to make sure as an industry that will those women, along with those quote-unquote ‘diverse hires’ are not looked at as diverse, however are looked at as incredibly productive along with high-performing along with equal members of the team.”