Back to Blog

Venture Capital and Gender Parity: Still Lagging Compared to Other Industries

     

It is no secret that certain sectors are more male-dominated than others. Although law and medicine have experienced and are continuing to experience increasing numbers of women joining the field, financial services and technology continue to lag far behind. This appears to be particularly problematic in the venture capital sphere. Not only are women underrepresented at venture capital firms, female-operated startups and business ventures are far less likely to receive venture capital funding. And, this is true irrespective of geographic region, meaning that the supposedly progressive regions of NorCal are equally culpable in the perpetuation of this disparity.


Interestingly, analysts believe this is an unfortunate oversight, socially-speaking of course, but also because it carries some negative financial repercussions. Here are a few reasons women-run businesses merit a closer look:

Different Perspectives

 Even though men and women should be treated equally, including receiving equal pay for equal work, there is scientific support for the notion that men and women are quite distinct in many ways and certainly think quite differently. For this reason, it is advantageous to have an executive team with a diverse demographic composition.


Of course, this means that both genders should be represented, but there should be racial and ethnic diversity as well to ensure that the leadership team reflects our melting-pot society. A person's personal and professional experiences, inevitably shaped by gender, race, and other sociocultural factors, provide unique and beneficial perspectives that a company might not otherwise enjoy with a homogenous group.

New Markets

Just as women can bring a different perspective to the venture capital world, they may also provide access to new and untapped markets. The innovative spirit underlying most startups is often a huge factor in their success. Thus, because the sphere has been male-dominated for so long, women may provide a fresh outlook and the ability to fulfill previously unmet demands. Obviously, this bodes well for both the startups and their venture capital funding partners.


 

Related Article:  9 Lessons Learned While Raising Venture Capital


 

Expanded Client Base

Because women are poised to establish businesses that offer goods and services tailored for women, these new companies and markets may also create a whole new client base. There is clearly increasing dialogue regarding the need for women to "lean in," but doing so while juggling other responsibilities still proves to be quite difficult.


Thus, female-focused startups need to offer services that promote the convenience and flexibility so many women desire. For example, delivery services for basically anything imaginable, background checks for prospective employees whether in the home like a nanny or at work like an assistant, and money management apps, to name a few. These are likely the sort of things that the busy women running startups will think to create, considering that they are also the sort of things that they would want to use to get things done.

Society will likely never be perfect nor completely equitable, but business leaders can take steps to build upon current progress to ensure constant improvement, and many people will gain in various ways in the process.

Subscribe to the SecureDocs Blog