Venture capital is guilty of ‘diversity wash’ – where there are supposedly more women in senior positions, when the reality is that men hold the power.
So says Ada Ventures in its new report which analyzes the £6.6 billion raised by venture capital funds between 2017 and 2023 from a gender perspective.
For starters, while venture capital promotes its openness to women, men dominate senior and leadership positions.
Female founders continue to receive fewer investments – All-female teams receive a smaller share of venture capital deals than they did a decade ago
Men account for 70 percent of top jobs, compared to 30 percent of women, despite women making up four in 10 of VC employees.
This is despite the increased financial performance of European venture capital funds with more women in senior management positions. According to the September 2023 European women in VC According to the report, management teams composed of mostly women outperformed teams composed of all men by 9.3 percentage points.
“At Ada Ventures, we passionately believe that greater participation in venture capital will help us find better breakthrough ideas for the toughest problems we face,” said Check Warner, co-founder of Ada Ventures. “Inclusive strategies lead to better returns… having diverse investors at the venture capital level leads to funding more diverse teams and founders.”
And the numbers get even worse the deeper you drill into who actually owns the VC. Even if you, as a woman, have a leadership title (founder, managing partner, or partner), only 17.7 percent of women have “significant ownership,” compared to 27 percent of men.
“The difference between individuals with senior titles and those who own the management company highlights the need for real representation and inclusion in venture capital firms,” said Oksana Stowe, UK&I head of VC and startup ecosystem at report sponsor Google Cloud.
And all-male venture capital firms have also edged out all-women firms when it comes to attracting investment capital.
The venture capital funds owned entirely by men were ten times larger than those owned entirely by women during the period. All-women-owned funds closed just one fund in the time it took all-male funds to raise eight.
And that was the equivalent of 7p per pound raised going to all-women funds, compared to 76p for all-male venture funds.
More about VC diversity
Female founders give up more shares to venture capital funds than men – A report shows that women give away 10 percent more of their stake to venture capital funds than their male counterparts
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