Women in Venture Capital- Why so few? Why does it matter? What can be done to change it?

The Capstone team was asked to investigate and provide recommendations on “Why are there so few women in VC industry?”

Over the last decade, the proportion of women partners categorized as key decision makers in the U.S. VC firms has declined from 10% to 5-8%. Women representation in the S&P 500 Finance and insurance companies is roughly around 20% on average, 5-8% in the VC world is truly an extreme case1. The team tried to identify reasons for the decline by analyzing nine assumptions: fund raising; unconscious bias; male-dominated work culture; legal Issues; lack of role models/women mentors; lack of HR policies; work and life balance; personality traits; and few women founders

Because VC fuels the high growth companies of tomorrow, having a diverse and inclusive set of decision makers is more advantageous for the VC industry, for instance, higher returns to investors, more inclusive culture and higher possibility to fund women entrepreneurs. The team developed eight recommendations for the VC industry to recognize the value of hiring more women through desk research, expert interview with 54 women and men who are active in the industry:

1)   Recognize the unconscious bias

2)   Increase woman mentorship

3)   Train women VCs on fund raising

4)   Build a powerful and inclusive network

5)   Create public awareness

6)   Encourage job applications

7)   Empower HR and adopt the HR mindset

8)   Develop state-backed VC influences

1 Women in S&P 500 Finance and Insurance. (2012). Retrieved May 11, 2016, from http://www.catalyst.org/knowledge/women-sp-500-finance-and- insurance-0