A DowJones VentureSource report found that flourishing startups have more women in leadership roles than unsuccessful startups. The study covered over 20,000 businesses that were backed by venture capitalists from 1997 to 2011. Of these companies, there were more women board members, more women managers, and more women VPs in the successful ones compared to those that floundered.
The data on “successful” businesses looked at those that were acquired, became publicly traded, or became profitable. 7.1 percent of these businesses had women executives. “Unsuccessful” companies in the study were those that had yet to be traded publicly, been acquired, and those businesses that failed. Of these businesses, females only made up 3.1 percent of executives.
The report found that businesses with female chief executives, however, were 21 percent less likely to succeed. The report looked only at numbers and offers no findings as to why this is the case. There could be a multitude of reasons, but the study revealed how few executive positions women hold in venture capital businesses. “For the last 15 years, what has been the percentage of women investors making those decisions to get these companies going? My guess is it was very small.” States CEO of Women 2.0, Shaherose Charania. The company, Women 2.0, looks to use events and media to raise the number of women tech entrepreneurs.
Within the U.S., women make up more than half the population. They tend to be more well-educated with 57-58 percent of bachelor degrees awarded to females, 58-60 percent of master’s degrees earned by women, and 45-52 percent of doctorates. But only 28 percent of all companies within the U.S. are owned by women, and only 16 percent of Fortune 500 companies have women in the board room and corporate office. That number drops even more in venture-backed businesses; less than 7 percent of their executives are women.
There is a shift occurring, and Ms. Charania notes there have been an increasing number of startups that have flourished and have been led by women. She names Wildfire, co-founded and led by CEO, Victoria Ransom; Google is buying it for $250 million. Charania also mentions SlideShare, which was led by CEO and co-founder, Rashmi Sinha; it is being bought for $119 million by LinkedIn. This, Charania says, will be the future: “There are more women going from, ‘I have an idea’ to ‘I’m quitting my job and I’m starting,’ and they’re holding that CEO role in the very earliest stages of the startup.”
Tozzi, John. “Women Help Startups Succeed. When Will VCs Notice?” GenderGap, Small Business. Bloomberg Businessweek. 10/05/12.
Institute of Education Sciences. “Degrees conferred by sex and race” Fast Facts, National Center for Education Statistics. U.S. Department of Education. 2012.