Here’s why Venture Capital doesn’t fund women

🌈 Abstract

The article discusses the persistent gender gap in venture capital funding, where women-led startups receive significantly less funding compared to those led by men. It argues that this disparity is not due to a lack of capable women entrepreneurs, but rather a result of the biases and decisions of venture capitalists themselves.

🙋 Q&A

[01] The Persistent Gender Gap in Venture Capital Funding

1. What are the key reasons cited for the lack of venture capital funding for women-led startups?

• The article argues that the main reason is that venture capitalists, who are predominantly male, choose to fund male-led startups instead of women-led startups, despite evidence that women-led startups perform better.
• It dismisses common excuses such as a lack of women in entrepreneurship, societal gender norms, and access to childcare as convenient excuses that avoid the real issue.

2. What data is provided to support the claim that women-led startups perform better?

• The article cites data showing that startups with at least one female co-founder generate 10% more revenue over a five-year period, and women-led tech companies achieve 35% higher ROI and 12% higher revenue than male-led businesses when venture-backed.
• It also notes that for every dollar of funding, female-founded startups generated 78 cents in revenue, compared to just 31 cents for male-founded companies.

3. How does the article characterize the venture capitalists' approach to funding decisions?

• The article argues that venture capitalists have a "myopic view" that overlooks the breadth of valuable innovations women could bring to the market if given equitable access to capital.
• It suggests that venture capitalists' funding decisions are often based on "inadequately researched hunches" and a preference for founders who look like "younger versions of themselves."

[02] The Need for Venture Capitalists to Address Their Biases

1. What does the article suggest venture capitalists need to do to address the gender funding gap?

• The article states that the gender funding gap will only change when venture capitalists "muster the will to confront their biases, look beyond the usual male-dominated networks, and make the choice to fund excellent women-led ventures in serious numbers."
• It argues that venture capitalists need to take responsibility for their own biases and choices, rather than making "convenient excuses" for the disparity.

2. How does the article characterize the current state of the conversation around this issue?

• The article criticizes the "hand-wringing" and "repetitive conference panels" that avoid directly addressing the root cause of the problem, which is the venture capitalists' own decision-making process.
• It suggests that venture capitalists are "too piss-weak" to take responsibility for the disparity, and that they will continue to make "inadequately researched hunches" that perpetuate the gender funding gap.