Female Entrepreneurs Get No Respect From Venture Capitalists Unless They Can Code
3:00 pm, March 29th | by Meredith Lepore
According to a new study from the Stanford’s Clayman Institute for Gender Research, women only get 4.2% of venture capitalist funding. Major downer, right?But on the bright side, when women have a background in tech, this acts as an equalizer to interested venture capitalists. So ladies, get coding.
From the study synopsis:
“Female and male technical entrepreneurs were rated similarly – having technical degrees can level the playing field.
We also found that women non-technical entrepreneurs received significantly lower ratings than non-technical men. In fact, a non-technical degree can raise the ratings for male entrepreneurs, while they are detrimental to women.”
This is a great study but the information is not that new. According to the Center for Women’s Business Research, data shows that while about 41% of private companies in the U.S. are owned by women, only 3-5% of them get venture capital. The U.S. Global Entrepreneurship Monitor says that women start ventures with eight times less funding than their male counterparts.
Part of the problem is the lack of women in venture capitalism. It tends to be old, white men who aren’t necessarily blatantly discriminating against women, but may just relate more to a male entrepreneur. Laurel Touby, founder of MediaBistro, told The Verge, “I don’t want to blame men, but it’s almost like it’s a different language. What they see as confidence in a male, they may see as charm in a female. They may see leadership in a man, but charm in a female. They would fund leadership, but they might not fund charm.”
But the tech component is interesting, and more and more women are moving into the tech space so hopefully these numbers will change soon. The number of women starting tech companies nationally has doubled in the past three years, according to an informal poll by Women 2.0.
Advances in technology, lower infrastructure costs and ample angel investing have made it easier to launch an early-stage company, Leah Busque, CEO of TaskRabbit, said last June during a USAToday roundtable with female tech entrepreneurs. It’s way cheaper to start a company today because Web servers and other equipment cost hundreds of thousands of dollars, not the millions once required for high-end computer servers. Newer technologies, such as cloud computing, reduce infrastructure costs. And coding isn’t as onerous as it once was. Those changes have allowed entrepreneurs to build products faster and land funding sooner. This has led to all but two of the 19 U.S. high-tech IPOs in 2009 having at least one female officer. Compare that with 1988, when only 4% of the 134 firms that went public in the U.S. had women in top management spots.