Home Why There Are Hardly Any Female Founders and VCs

Why There Are Hardly Any Female Founders and VCs

Friday is the last day of New York Entrepreneur Week which, upon its completion, will have featured over 100 speakers from across the globe. Since it kicked off, interesting stories have been surfacing around the event. A guest post on the event’s official blog by Janine de Nysschen, a business consultant and endorser of change dynamics, asks why women play a very small role in startups and venture capital. As her passion might indicate, she feels this trend is changing.

It’s true. Though there are significant exceptions, we seldom hear about female CEOs launching startups and receiving boat loads of venture capital funding – heaven forbid it be from a female venture capitalist. But it’s not just a startup problem, its a problem that persists in the majority of business fields; business is an industry that was only a man’s game for a very long time, and women are still playing catch up. However, de Nysschen thinks there are factors about venture capital that make it less appealing to businesswomen of the world.

“The truth is that VCs invest in a stereotype, and that right now, the stereotype of high risk-tolerance, abnormal work ethic and business acumen seldom comes in the female form,” says de Nysschen. She also says that a lot of VC deals are formed from existing relationships in the community, and points out that men and women tend to socialize in different circles, “especially in business,” she adds.

She notes that while there is a shortage of female VCs and entrepreneurs, 70% of female VCs have been involved in deals that included female-led companies. Based on this, it’s only fair, de Nysschen concludes, that “if there were more women doling out money, there would be more women getting it.”

But things may be beginning to change.

According to de Nysschen, women are the fastest growing subgroup of entrepreneurs – a fact she attributes to a growing trend of women choosing new career paths and educations. One of the reasons she says women have struggled in the venture-backed sector is that many VCs and founders come from backgrounds in which women are traditionally in the minority, such as engineering, computer science and biotechnology. However, women are statistically better startup founders than men, she says.

“Women have been proven to build companies that are more capital-efficient than those founded by men, and they use less capital to achieve the same or higher revenue performance in early-stage years,” she says. “Women don’t fail as often as men: in fact, women-led high-tech start-ups generate higher revenues per dollar of invested capital and have lower failure rates than those led by men.”

Gender issues are nothing new to ReadWriteWeb. In the past we’ve discussed the need for female-oriented tech events and the unique market of female bloggers, while at the same time opening up a discussion about whether women should be specifically catered to or not.

As de Nysschen mentions in her post, there are more women in the world, and women do more purchasing of products and services than men do, so why shouldn’t there be more women in the VC industry? Let us know you thoughts on female entrepreneurs and VCs in the comments!

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

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