That’s the question pondered by Janine de Nysschen, a business consultant and guest blogger for the New York Entrepreneur Week conference which took place last week in Manhattan.
In her article titled “Why Men Get VC Money and Women Don’t … and How That is Changing,” de Nysschen argues that nine times out of ten, the men behind the money respond less to the business idea than to who’s doing the pitching. Quoting venture capitalist John Doerr of KPCB, she writes: “If you’re white, under 30, a technical geek with no social life, and a Harvard or Stanford dropout, you can line up for VC money.”
VCs invest in stereotypes, she says, and that stereotype rarely comes in female form. The data would seem to support her. Historically, women-led companies have received less than 9% of venture capital investments. In 2007, she writes, the proportion of funded female CEOs dropped to 3%.
So what’s driving this bias? Men hold the purse strings, for the most part. If there were more women doling out money, there would be more women-led companies getting it. Women tend to hang out and develop different social networks than men. There aren’t as many women computer geeks or engineers as men. And in the past two decades, the majority of VC funding has gone into high tech and engineering. The majority of venture capitalists have backgrounds in engineering, computer science or biotechnology, areas that women don’t traditionally delve into. And there’s track record. For the aforementioned reasons, there are just fewer women with proven track records running early ventures in high tech or biotech.
de Nysschen provides more data to support each of these arguments in her blog post for New York Entrepreneur Week. She ends on an optimistic note, however. The 30-year-old geeks should be nervous, because more and more research is demonstrating that women are extremely successful in launching start-ups. And the gender gap in science and biotechnology is narrowing. Some researchers, such as Cindy Padnos of Illuminate Ventures, have data showing that women-led ventures may be a better bet in the future. Women entrepreneurs are among the fastest-growing group of business owners. And women are gaining ground narrowing the gap in high-tech and biotech fields and developing better business networks.
What’s your opinion? Are you a woman working in venture capital? We’d like to hear what you have to say in the comment box below.
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