TLDR:
Key points:
- Venture capital firms with more female senior venture capitalists offer less funding to woman-led businesses.
- Factors like trust and political neutrality among decision-makers can mitigate this effect.
More women in venture capital doesn’t necessarily mean more funding for female-led businesses, according to new research. Despite the push for gender equity in VC firms, the study found that having more female senior venture capitalists in decision-making groups actually led to less funding for woman-led businesses.
The research analyzed funding decisions from over 150 VC firms and found that every additional senior female venture capitalist in a decision-making group was linked to a decrease in funding for woman-led businesses.
Factors such as trust among decision-makers and political neutrality within the group were identified as potential mitigating factors. The study suggests that VC firms may need to explore innovative approaches to combat gender bias and promote diversity among decision-makers.
While efforts to increase female representation in VC firms are important, the study highlights the need to address underlying cultural biases and power dynamics to truly achieve gender equity in the entrepreneurial finance market.
