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The VC Gender Gap: Are VCs Sexist?

Posted by: Nick Leiber on October 6, 2009

This is a post by guest blogger Jeff Bussgang.

jeff_bussgang.jpgI find the preponderance of males in VC an annoying and stubborn phenomenon. When I first entered the start-up game as an entrepreneur in the mid 1990s, I didn’t think much of the “VC gender gap” as there were plenty of women executives around. In fact, between one third and one half of the executive teams at my two start-ups (Open Market and Upromise) were women.

As the father of a capable, ambitious daughter, perhaps I’m over-sensitive to the issue, but since becoming a VC seven years ago, I find it amazing that only 5-10% of the VC industry is made up of women. Only 25% of all VC partnerships have a single women partner and only 7-8% have more than one women partner. Anecdotally, even fewer women are “management company GPs” as opposed to “employee GPs” - in other words, true owners of VC funds as opposed to deal partners. What other major industry remains 90-95% male-dominated? What’s the deal?

An outstanding Kauffman Foundation study, “Gateways of Venture Growth”, analyzes this issue and comes up with some thoughtful but unsurprising conclusions. They point out that the industry remains very clubby, and the lack of female role models creates a self-perpetuating cycle. Professor Myra Hart of Harvard Business School writes, “Women trying to launch or further careers as VCs have fewer first-degree connections with those (men) in positions to hire or promote them.”

Another issue that holds women VCs back is the fact that the academic backgrounds of VCs tend to be in technical areas, such as computer science, engineering and biotechnology where, again, females are in the minority.

In talking to my women VC friends, they reinforced these two major issues, but held out some cause for optimism going forward. Irena Goldenberg of Highland Capital in Europe (an formerly an associate with us at Flybridge Capital before she went to HBS and then Geneva), believes there are more female VCs in life sciences as the medical field has a higher ratio of women to men than, say, engineering. Our senior associate, Robin Lockwood, told me she thinks VC profiles simply lags entrepreneur’s profiles. As more women entrepreneurs emerge, more women will become VCs.

Here’s a thought-provoking observation that an anonymous woman pointed out to me (and please do not accuse me of channeling Larry Summers on this - I’m just passing along what I heard): she believes the VC industry is male-dominated because men are more wired to take risks than women. Gambling, she points out, is more popular amongst men than women. Thus, risk-taking with capital is more likely to be comfortable for men than women.

Some women have been able to break out as strong investors and industry leaders. In my informal survey, a few experienced women VCs stood out as strong role models: Venetia Kontogouris at Trident Capital, Annie Lamont at Oak, Patricia Nakache at Trinity and Nancy Schoendorf from Mohr Davidow.

I guess when you have a clubby, tightly-woven, self-perpetuating network, it’s hard for women to break in. It’s a stubborn phenomenon, but I hope we can figure out how to correct it. Otherwise, our industry is tragically losing out on 50% of the world’s best talent!

Serial entrepreneur Jeff Bussgang is a partner at venture capital firm Flybridge Capital in Boston.

Reader Comments

Monika oli

October 6, 2009 8:36 AM

I TOTALLY agree with your article and would like to thank you for posting it. It is still VERY hard, even for very educated and competent women to break into the tight knit communities that have been in existence for many years.
Any suggestions to overcome the problem?
I also have two headstrong talented young daughters and don't want them to face the same problems I encounter.
Thanks again for the post!

sean harper

October 6, 2009 11:49 AM

I am an entrepreneur and have worked as an associate in the past for two wonderful and successful female VCs - Nilanjana Bhowmik at Longworth and Ellen Carnahan at William Blair Capital Partners.

I don't buy the "women are less inclined to take risks" argument. Much of the VC job is about risk-mitigation, rather than risk-taking.

My theory - on average women bear more of the career consequences of raising families and there are fewer women in high-tech than other industries.

Andrea Learned

October 7, 2009 9:37 AM

This is an important topic for men, specifically, to notice and bring up - so thanks for writing this, Jeff. While I can't speak specifically to the VC realm, this is just another example of the "women in leadership" question overall. From my work in marketing to women, I've seen that the way the issues are framed/communicated can make a big difference. Gender differences and sexism ARE key, but using those terms can often stop an open conversation before it starts. VCs that don't recognize the opportunity and work on finding more women/more leadership balance for their ranks are, bluntly, more dumb than sexist. Figuring out how to raise the issue and have good conversations about it are key. "Sexism" is a loaded term, but yes - it is what is happening. Re-frame the loaded term, however, and you can make the problem into something EVERY smart businessperson (no gender about it) can agree on and then get to the work of building strong gender-blind organizations.

Sharon Vosmek

October 8, 2009 12:57 PM

Just food for thought:
In research by Myra Hart, Harvard University, “Gatekeepers of Venture Growth: The Role of Women in the Venture Capital Industry” it was shown that VC firms with at least one woman in the partnership (not associate level) were 70% more likely to have a woman in the portfolio.


October 8, 2009 1:20 PM

Your friend that noted men are *generally* more wired to take risks has identified a biological reality (key word is generally) that needs to be considered.

It might not be a factor that is acceptable or PC. I know. Just because it doesn't sound the way our culture would like it to doesn't make it any less valid though.

Loyd Eskildson

October 8, 2009 7:33 PM

What a trite, misfocused discussion, given the loss of entire industries, with their associated current and future VC and employment potential, to outsourcing. Keep this stupidity up and very soon the Chinese will have ALL our jobs and money!

Rachael Chong

October 9, 2009 10:01 AM

Thanks for this post Jeff! It's powerful hearing these words come from a male VC and entrepreneur. Check out my Huffington Post blog post about the opposite problem - the lack of women entrepreneurs seeking venture capital.

You state: "As more women entrepreneurs emerge, more women will become VCs." I think the opposite is also true. It's kind of the chicken or the egg problem.

J Studer

October 10, 2009 9:56 PM

Annoying is a one way to describe this blog post. Once again, no apologies offered to all those competent hard working individuals of a group (men and women within, in this case, the VC industry) being insulted apparently in an attempt to lay a foundation for a more widespread PC based conversation. Here is an idea that will help your daughters (and hurt our sons). The timing is perfect. Lobby the Obama Administration (or Congress) to engineer an "equality" tax on the profits of those VC firms that do not have at least one female general partner.

Sure enough some might say "this guy just doesn't get it". However, before you tune out consider this. Those that are willing to make an honest assessment of the situation understand that the business (and political) environment for women is rapidly advancing on all fronts. There are many many competent women in this society. A renewed focus on competence and hard work will serve all of us well moving forward.

Daughters and sons alike.


October 15, 2009 5:41 PM

i lend money so people can start something to earn a living.
women are the ones who never failed me
mostly they get tired of trying to cope in male oriented companies
and go for the lone enterprise
i'm not charity i want profit
with women i never had a default
and they pay me back before the time scheduled to mature
i am a sexist: i prefer women

Jeff Bussgang

October 16, 2009 9:36 AM

Thanks for the comments, folks! I think the question of competence that J Studer raises is an interseting one. I'm not suggesting VCs lower their investment bar or recruiting bar (we sure don't at Flybridge Capital). We are focused on making money for our investors (known as Limited Partners). Period. But is their untapped potential out there because more supersmart young women aren't selecting entrepreneurial or VC career tracks?

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What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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