Why are some venture capital firms not funding women?
The facile answer to this assumptive question is “because some women are not seeking funding from venture capital firms”.
But there is actually quite a bit of truth in both statements. Women-led ventures definitely account for a smaller percentage of venture investments than do ventures led by men, but women-led ventures also account for a MUCH smaller percentage of ventures seeking funding in the first place!
This is also (and even more so) true for other groups that seem to receive less than their proportionate share of equity investments: Blacks, Latinos, LGBTQ, etc.
In fact, most investors I know would *prefer*—all things being equal—to invest in someone OTHER than a straight, white, male, 20-something…but that’s who accounts for a majority of high-growth startup entrepreneurs coming to us for investments.
As I have spoken about loudly, publicly and for years in venues from the We Own It Summit to Black Founders and LATISM, the solution is NOT to rail against some hidden (and largely non-existent) conspiracy to discriminate against deserving entrepreneurs, but instead to evangelize, educate and urge women (and Blacks, Latinos and gays, among other groups) to proactively enter the playing field in the first place.
For many years, Astia has had a training program for women entrepreneurs to prepare them to seek venture funding, which has a mind-blowing track record of getting 65% of them funded!! This is in comparison to the industry-wide rate of 0.25% for all companies.
Speaking for my own portfolio, the success rate of women-led startups getting an investment from me is probably 2-3x that of men-led ventures…but they still account for a minority of my portfolio.
*original post can be found on Quora @ http://www.quora.com/David-S-Rose/answers *
Written by David S. Rose
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