Recent data points to the conclusion that venture capital investors tend to favor male-led companies.
Citing data from a January 2018 Fortune magazine article — which itself cites data from mergers and acquisitions, private equity and VC database PitchBook — as well as other studies, Monica Eaton-Cardone, co-founder and chief information officer of Global Risk Technologies, said in a statement that venture capital (also known as “VC” investments) tends to go overwhelmingly to men.
In 2017, companies with all-female founders closed 368 VC deals, compared to 5,588 deals for all-male teams and 1,046 for mixed-gender teams, according to Eaton-Cardone and the studies she cites.
Nearly 90 percent of partners at venture firms are male, Bloomberg News reported earlier this month.
In 2017, data compiled by PitchBook Data Inc. showed that the industry put $68.2 billion into companies founded by men, compared with $1.9 billion for start-ups with solely female founders, Bloomberg also said.
Women-led start-ups saw a 2.2 percent share of VC investments last year and averaged $5.16 million per deal versus $11.97 million for male founders, Eaton-Cardone’s statement said.
“Yet evidence shows that women entrepreneurs often outperform males, both in VC portfolios and in crowd-funding campaigns,” Eaton-Cardone said in her statement.
“When First Round Capital analyzed its investments over a 10-year period, it found that companies with at least one female founder performed 63 percent better than those with all-male founders, and three of its top-10 investments had at least one female founder,” her summary of the data said.
She also cites an analysis by PwC noted that female-led campaigns are 32 percent more successful than male-led ones, with success rates of 22 percent and 17 percent, respectively, she said.