“There is an enormous untapped investment opportunity for venture capitalists smart enough to look at the numbers and fund women entrepreneurs.” That’s one conclusion reached by Dr. Candida Brush, lead author of “Women Entrepreneurs 2014: Bridging the Gender Gap in Venture Capital” sponsored by EY, Babson College Center for Women’s Entrepreneurial Leadership and The Diana Project.
This study follows up on the original Diana Project research conducted in 1999 to learn why fewer than 5% of all ventures getting equity capital included women on their executive teams. Much has changed since then. The 2013 Global Entrepreneurship Monitor found that 13% of the working population of the U.S. was starting up or operating a new business. That entrepreneurial rate was unequal: 16% of men, 11% of women. But it meant that one in 10 women in America was becoming an entrepreneur. Babson’s latest study sought to learn whether women entrepreneurs are better able to obtain venture capital.
“We found that women entrepreneurs have made progress in obtaining venture capital since the original Diana Project report in 1999,” the Executive Summary explains. “Our data show that during 2011-2013 more than 15% of the companies receiving venture capital investment had a woman on the executive team. Compared with our finding in 1999, when businesses with women on the executive team received fewer than 5% of all venture capital investments, this figure represents important progress.”
However, the study also concludes that there is “still a significant gap in venture capital funding between those businesses with a woman on the team and those with no women.” For example, only 2.7% of 6,517 receiving venture capital funding have a woman as CEO.
The study issues nine recommendations, beginning with increasing the number of women investment professional in the venture capital industry. Read all the recommendations and the complete Executive Summary here. Then share your opinions and experiences on GlassCeiling.com. Step up and join the conversation.