Studies: Venture capital favors male-led companies

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.

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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.

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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.

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“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.

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