Key Points:
- Despite promises from Big Tech and VC to address sexism and racism, progress has been minimal with women-founded startups continuing to struggle for funding.
- Only 2% of funding goes to women-led startups and far less to women of color, according to research firm Pitchbook.
- Research indicates that having only women VCs can hinder future investments for women-led startups.
- A majority of women founders have reported being treated differently while seeking funding based on their gender, and many have experienced harassment.
- Advocacy groups and safe spaces at the workplace are not enough to drive equality and meaningful change is needed.
Over the years, Big Tech and venture capitalists (VCs) have made promises to address sexism and racism within the industry. Despite these pledges and hiring of chief diversity officers, progress has been inadequate. Statistics show that women-founded startups continue to struggle for VC funding. According to Pitchbook, only about 2% of funding goes to women-led startups, with even lesser funding for women of color. This disparity has remained approximately the same for the last decade, regardless of increases in women founding startups, incubators, and venture funds.
Strikingly, research reveals that having an all-female VC can negatively affect future investments for women-led startups. For instance, these startups were twice less likely to secure their next round of funding if they received capital exclusively from female VCs. This was not the case for male founders who raised funds from all-male VCs.
Harassment and discrimination also remain prominent issues. Sixty-five percent of women founders have reported that they were more likely to get funding if they were a man or had a man as a co-founder. Seventy percent were allegedly treated differently based on their gender while seeking funding. Close to 40% of women experienced unwanted physical contact and over 47% have endured harassment six or more times.
Advocacy movements have made headlines but have not made substantial progress in eradicating sexism, racism, and harassment within the tech sector. Despite the establishment of safe spaces and the presence of advocacy groups at workplaces, inequality persists. What is required is a wholesale dismantling of oppressive systems and holding those in power accountable. Based on a study conducted by Women Who Tech, only 35% of women in tech believe there are equal opportunities for underrepresented teams.
The tech and VC world need to actively address and tackle the discrimination and harassment prevalent in the largely male-dominated workforce. The pace of change for women, especially women of color, can’t remain stagnant in an industry that is evolving rapidly.
