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Women in venture capital or VC are investors who provide venture capital funding to startups. Women make up a small (usually less than 10%) fraction of the venture capital private equity workforce. A widely used source for tracking the number of women in venture capital is the Midas List which has been published by Forbes since 2001. Research from Women in VC, a global community of women venture investors, shows that the percentage of female VC partners is just shy of 5 percent. [1]
One of the first women to make the list, Annette Campbell-White, has been cited as an example of discrimination in venture capital. She was mentioned in the Midas List for three consecutive years, from 2005 to 2007. [2] She claimed that a number of firms in the 1980s ignored her senior management experience in Hambrecht & Quist. [3] [4] In addition to finding that women make up the majority of early technology adopters, [5] Harvard Business School Professor Paul Gompers has stated that female venture capitalists consistently perform as well as males at large firms that have more than one woman. [6]
Questions about how to increase the number of VC opportunities for women have been brought to the forefront by several events. One of them is a lawsuit by Ellen Pao against her former employer Kleiner Perkins Caufield & Byers. Another is Elephant in the Valley, a survey aiming to expose discrimination started by several women in business including Tracy Vassallo, a former partner of the same firm. [7] Expressing criticism of existing funds, a number of women since 2007 have begun to start their own. [8]
Babson College’s Diana Report, research by an initiative working to increase the number of women entrepreneurs, found that the number of women partners in VC firms decreased from 10% in 1999 to 6% in 2014, though that number has recovered to 9.5% in 2018. [9] The report also found that 97% of VC-funded businesses had male chief executives, and that businesses with all-male teams were more than four times as likely to receive VC funding compared to teams with at least one woman. [10]
More than 75% of VC firms in the US did not have any female venture capitalists at the time they were surveyed. [6] It was found that a greater fraction of VC firms had never had a woman represent them on the board of one of their portfolio companies. For comparison, a UC Davis study focusing on large public companies in California found 49.5% with at least one female board seat. [11] When the latter results were published, some San Jose Mercury News readers dismissed the possibility that sexism was a cause. In a follow-up Newsweek article, Nina Burleigh asked "Where were all these offended people when women like Heidi Roizen published accounts of having a venture capitalist stick her hand in his pants under a table while a deal was being discussed?" [12] [13]
Makers of software and related products receive the majority of venture capital funding in the US. [14] [15] Since the dot com boom, venture capital has become almost synonymous with technology startups due to the large potential investors see in this sector. [16] Regarding the shortage of women in the industry, some venture capitalists have called this a contributing factor to similar gender disparity seen in a wider range of Silicon Valley companies. [17]
These Silicon Valley leadership positions are mostly held by men, with only 15.7% of board members being women, according to a report by Fenwick & West. This compares negatively to the 20.9% across all S&P 100 firms. These numbers drop to 11% and 16% respectively when considering executive positions. Industry scholar Vivek Wadhwa has proposed that another contributing factor is a lack of parental encouragement to study science and engineering. [18] He has also cited a lack of women role models and noted that most famous tech leaders like Bill Gates, Steve Jobs, and Mark Zuckerberg are men. [19]
2014 saw the release of several corporate transparency reports that offered detailed employee breakdowns. The largest contributors were Google, Yahoo, Facebook, and Apple, who respectively reported that 17%, [20] 15%, [21] 15% [22] and 20% [23] of their tech employees were women. Subsequent commentary in USA Today pointed out that "women are underrepresented in Silicon Valley — from giant companies to start-ups to venture capital firms." [24] In October of that year, Bloomberg reported that Apple, Facebook, Google, and Microsoft attended the 20th annual Grace Hopper Celebration of Women in Computing conference to recruit and potentially hire female engineers and technology experts. [25] That same month, the second annual Platform Summit was held to discuss increasing racial and gender diversity in tech. [26]
The 2012 lawsuit Pao v. Kleiner Perkins was filed in San Francisco County Superior Court by executive Ellen Pao for gender discrimination against her employer, Kleiner Perkins Caufield & Byers. [27] The case went to trial in February 2015. On March 27, 2015 the jury found in favor of Kleiner Perkins on all counts. [28] Nevertheless, the case, which had wide press coverage, resulted in major advances in consciousness of gender discrimination on the part of venture capital and technology firms and their women employees. [29] [30] Three later cases, one of which was dropped, include lawsuits against Facebook, Twitter and Microsoft. [31]
Women are far outnumbered by their male counterparts in venture capital. [32] Eileen Lee, cofounder of Cowboy Ventures, one of the most prominent women in venture capital in Silicon Valley, started a group with fellow women in venture capital who seek "to both mentor and increase the number of women founders and women in venture capital". [33] Groups that advocate for women in venture capital and help them find positions in the field are seeking to break down gender biases and stereotypes that prevent women from succeeding in venture capital to begin with. [33]
There are steps that can be taken within the venture capital field to help women in the industry. One of the ways in which more women can obtain jobs in venture capital is to increase the number of women in U.S. graduate school business programs. According to Joan Winn in her journal article “Women Entrepreneurs: Can We Remove The Barriers?”, one-third of the individuals enrolled in graduate school business programs were women. [34] Many graduate business programs try to recruit women, yet are unsuccessful in doing so. Winn believes that if these universities were to cater their programs more towards women by accommodating their obligations to work and family needs, their percentages of women would be higher. [34] Enrollment in a graduate business program would prepare them for the venture capital field.
Winn says that one of the main problems women face is a lack of funding or capital for their ventures. [34] According to Fortune, funding for female venture capital founders was 2.2% of all venture capital dollars in 2018. Although women-founded venture capital firms are far less prevalent than male-founded firms, the disparity of the disbursement of venture capital dollars is high. [35] The most plausible solution to this issue is to provide more funding for venture capital funds led by women. Having sufficient funding will generate more capital for their firms, allowing women to feel comfortable with making investments, especially where there is risk. [36]
In alphabetical order by last name:
Silicon Valley is a region in Northern California that serves as a global center for high technology and innovation. Located in the southern part of the San Francisco Bay Area, it corresponds roughly to the geographical area of Santa Clara Valley. San Jose is Silicon Valley's largest city, the third-largest in California, and the tenth-largest in the United States; other major Silicon Valley cities include Sunnyvale, Santa Clara, Redwood City, Mountain View, Palo Alto, Menlo Park, and Cupertino. The San Jose Metropolitan Area has the third-highest GDP per capita in the world, according to the Brookings Institution, and, as of June 2021, has the highest percentage of homes valued at $1 million or more in the United States.
Vinod Khosla is an Indian-American businessman and venture capitalist. He is a co-founder of Sun Microsystems and the founder of Khosla Ventures. Khosla made his wealth from early venture capital investments in areas such as networking, software, and alternative energy technologies. He is considered one of the most successful and influential venture capitalists.
Venture capital is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which have demonstrated high growth. Venture capital firms or funds invest in these early-stage companies in exchange for equity, or an ownership stake. Venture capitalists take on the risk of financing risky start-ups in the hopes that some of the companies they support will become successful. Because startups face high uncertainty, VC investments have high rates of failure. The start-ups are usually based on an innovative technology or business model and they are usually from high technology industries, such as information technology (IT), clean technology or biotechnology.
Kleiner Perkins, formerly Kleiner Perkins Caufield & Byers (KPCB), is an American venture capital firm which specializes in investing in incubation, early stage and growth companies. Since its founding in 1972, the firm has backed entrepreneurs in over 900 ventures, including America Online, Amazon.com, Tandem Computers, Compaq, Electronic Arts, JD.com, Square, Genentech, Google, Netscape, Sun Microsystems, Nest, Palo Alto Networks, Synack, Snap, AppDynamics, and Twitter. By 2019 it had raised around $9 billion in 19 venture capital funds and four growth funds.
Eugene Kleiner was an Austrian-American engineer and venture capitalist. He is considered a pioneer of Silicon Valley. He was one of the original founders of Kleiner Perkins, the Silicon Valley venture capital firm which later became Kleiner Perkins Caufield & Byers. The company was an early investor in more than 300 information technology and biotech firms, including Amazon.com, AOL, Brio Technology, Electronic Arts, Flextronics, Genentech, Google, Hybritech, Intuit, Lotus Development, LSI Logic, Macromedia, Netscape, Quantum, Segway, Sun Microsystems and Tandem Computers.
L. John Doerr is an American investor and venture capitalist at Kleiner Perkins in Menlo Park, California. In February 2009, Doerr was appointed a member of the President's Economic Recovery Advisory Board to provide the President and his administration with advice and counsel in trying to fix America's economic downturn. In 2017, related to Forbes, he was recognized the 40th Richest In Tech. As of July 2017, Forbes ranked Doerr as the 105th richest person in the United States and the 303rd richest person in the world, with a net worth of US$ 12.7 billion as of March 3, 2021. Doerr is the author of Measure What Matters, a book about goal-setting, and Speed & Scale: An Action Plan for Solving Our Climate Crisis Now.
Sequoia Capital is an American venture capital firm. The firm is headquartered in Menlo Park, California, and specializes in seed stage, early stage, and growth stage investments in private companies across technology sectors. As of 2022, Sequoia's total assets under management were approximately US$85 billion.
Lynne C. Hermle is an attorney specializing in employment law. She is a partner at Orrick, Herrington & Sutcliffe LLP's Menlo Park, California office. She also serves on the firm's management committee, the "first partner from the firm's Silicon Valley office to serve, and the second woman ever chosen".
Mary Meeker is an American venture capitalist and former Wall Street securities analyst. Her primary work is on Internet and new technologies. She is the founder and general partner at BOND, a San Francisco-based venture capital firm. She previously served as partner at Kleiner Perkins.
Frank J. Caufield was a co-founder and named partner of the venture capital firm Kleiner Perkins Caufield & Byers, based in Menlo Park, California.
Index Ventures is a European venture capital firm with dual headquarters in San Francisco and London, investing in technology-enabled companies with a focus on e-commerce, fintech, mobility, gaming, infrastructure/AI, and security. Since its founding in 1996, the firm has invested in a number of companies and raised approximately $5.6 billion. Index Venture partners appear frequently on Forbes’ Midas List of the top tech investors in Europe and Israel.
The iFund is a US$200 million capital fund. Developers may enter into equity deals for the creation of applications, services, and components for Apple Inc.'s iPhone, iPod Touch and iPad platform. It is being offered and managed by venture capital company Kleiner Perkins Caufield & Byers (KPCB).
Ellen Kangru Pao is an American investor and former CEO of social media company Reddit.
Shasta Ventures is an early-stage venture capital investment firm located in Silicon Valley that invests in enterprise and technology consumer startups. It is located on Sand Hill Road in Menlo Park.
Sexism in the technology industry is overt, subtle, or covert occupational sexism which makes the technology industry less friendly, less accessible, and less profitable for women. While the participation of women in the tech industry varies by region, it is generally around 4% to 20% depending on the measure used. Possible causes that have been studied by researchers include gender stereotypes, investment influenced by those beliefs, a male-dominated environment, a lack of awareness about sexual harassment, and the culture of the industry itself. Margaret O'Mara, a professor of history at the University of Washington, in 2019 concluded that Silicon Valley is uniquely influential locale that is shaping our world. But she points to problematic failures regarding diversity. Male oligopolies of high-tech power have recreated traditional environments that repress the talents and ambitions of women, people of color, and other minorities to the benefit of whites and Asian males.
Aileen Lee is a U.S. venture capital angel investor and co-founder of Cowboy Ventures.
Ellen Pao v. Kleiner Perkins Caufield & Byers LLC and DOES 1-20 is a lawsuit filed in 2012 in San Francisco County Superior Court under the law of California by executive Ellen Pao for gender discrimination against her employer, the venture capital firm Kleiner Perkins. Overlapping with a number of studies condemning the representation of women in venture capital, the case was followed closely by reporters, advocacy groups and Silicon Valley executives. Given the tendency for similar cases to reach settlements out of court, coverage of Pao v. Kleiner Perkins described it as a landmark trial once it began in February 2015. On March 27, 2015 the jury found in favor of Kleiner Perkins on all counts.
Social Capital, formerly known as Social+Capital Partnership, is a venture capital firm based in Palo Alto, California. The firm specializes in technology startups, providing seed funding, venture capital, and private equity.
Jennifer Fonstad is an American venture capital investor and entrepreneur. She co-founded and leads the Owl Capital Group, a venture firm based in Silicon Valley. Fonstad has been a leading technology, healthcare, and energy investor for almost 25 years with 17 years as a Managing Director of Draper Fisher Jurvetson (DFJ). She is also co-founder of angel investing network Broadway Angels. Fonstad has been recognized as a top 100 tech investor on Forbes’ Midas List twice and was named 2016 Venture Capitalist of the Year by Deloitte. She is also a Founding Member of All Raise.
Mamoon Hamid is a Pakistani-American venture capitalist currently serving as a Managing Member and General Partner at the venture capital firm Kleiner Perkins.
"We're in the middle of a shifting trend where there are newly wealthy women putting their money to work, and similarly we're starting to have a larger number of experienced investors,"
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(help)This is one of Silicon Valley's most glaring faults: It is male-dominated.
That's the full verdict. No on all claims.
We may look back at this as a watershed moment — regardless of how the very attentive jury comes out on their verdict.
Ms. Klein argued that the Kleiner trial would become a landmark case for women in the workplace, as consequential for corporate gender relations as Anita Hill's accusations in 1991 of sexual harassment during the confirmation hearings of Supreme Court Justice Clarence Thomas
In a sign that the struggle over the place of women in Silicon Valley is only beginning, gender discrimination suits have recently been filed against two prominent companies, Facebook and Twitter.
Now Ms. Lamont, one of the most successful women ever in the lofty realm of venture capital, is the not-so-hidden hand behind her husband, Ned, the political novice who managed to topple a three-term incumbent in the Democratic primary.