As everybody knows, sexism in tech is keeping women away from one of the world’s most exciting industries. The problem may start in schools with young girls feeling disinterested in STEM subjects, but as a Fortune report finds, it extends all the way up to the people funding the most successful startups.
According to Fortune, in a survey of US-based venture capital firms who raised at least one fund of $100 million (£71.3 million) or more since 2011, fewer than 6% of their decision makers are women. That means across 282 firms and 906 decision makers, there were only 52 women capable of deciding the fate of thousands of startups. That’s just 5.7%.
The difficulty here is that Silicon Valley’s overwhelming unrepresentative male culture runs the risk of becoming a self-fulfilling prophecy. What’s more, with women now accounting for more than half of the UK’s young entrepreneurs, if the investors are all old men, and the teams they expect to see are younger men, then what hope has an all-female team got of attracting the same level of funding?
Before you ask what constitutes a “decision maker”, Fortune classed them as “the most senior ‘layer’ of investment professionals” within a firm. With some, this translated to “general partners”, for others “managing directors”. Whichever term a firm decided it was going to use, Fortune made the decision to exclude “anyone who serves primarily in CFO or other administrative positions, unless they also represent the firm on portfolio company boards.” These results are also based purely on current staffing rosters, rather than those who may have been around during the years they broke that $100 million mark.
What makes this research more damning is that when you drill down into the data, it looks as if it’s the larger firms who are keeping the VC funding business as a boy’s club.
Having upped its minimum threshold to firms that raised funds of $200 million or more, Fortune found that only 5.67% of decision makers were women. Looking at firms that had raised between $100 million and $199 million – a far smaller sample group – Fortune found that women made up 5.97% of decision makers, indicating that smaller firms are better at having women at the top.
Finance businesses, especially VC firms, are notorious for having senior partner positions that may not change for decades, making it very hard for new blood to muscle its way in. While any growth in women within this space should be seen as a good sign, an industry where 50% of the population are represented by fewer than 6% of employees is not even close to representing the world it seeks to change.
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