What are the actual percentages of women in startups? Do the numbers differ by industry, stage of venture, or position? And, are women and men paid differently in startups?
On a regular basis, I read articles that refer to or lament the imbalance between men and women in startups. For instance, this Forbes article states that only 4.08% of venture funding in 2006 went to tech startups with female chief executives. But what is the actual percentage of women in these startups? Do imbalances exist more in some areas than in others?
In this year’s CompStudy survey we added a gender question to our Executive Backgrounds section in both the IT and Life Sciences surveys. The resulting data include 2,202 C-level and VP-level executives from 459 private ventures (i.e., the average top-management team was comprised of 4.8 executives per venture). Of these ventures, two-thirds are IT and one-third are Life Sciences ventures.
The percentage of women across all of these ventures was 12.9%. However, this differed significantly between IT and Life Sciences: IT was 10.7% women, Life Sciences 17.6%.
I also examined the data by stage of venture, geography, and position. First, the chart below shows the differences by stage of the venture - in particular, between ventures that had raised 2 or fewer rounds of financing (i.e., earlier-stage ventures) and those that had raised more than 2 rounds (later-stage ventures). The percentage remains pretty steady in IT ventures across these stages of financing, but drops slightly in Life Sciences ventures.
Geographically, 29.4% of the executives were from ventures with their headquarters in California and 16.8% were from Massachusetts-based ventures, giving us a total of 46.2% from these two “hubs” of venture activity. (No other state had more than 5.5% of the executives.) As shown in the chart below, in Massachusetts, there were similar percentages of women across IT and Life Sciences, but in California and “non-hub” states, IT had much lower percentages of women.
INITIAL QUESTIONS: Why does IT tend to have far fewer women than does Life Sciences? Any reactions to the differences across these specific locations (or stages of ventures)?
The percentages differed dramatically by position within the firm. First, the chart below shows the percentages for C-level executives.Compared to Life Sciences ventures, IT has a higher percentage of CFOs, but lags in the other C-level positions.
Finally, the chart below shows the percentages for VP-level executives, where the HR position is the obvious outlier.
QUESTION: Any thoughts on these position-by-position differences? Why do they differ between IT and Life Sciences?
Coming in my next post: “The Gender Gap in Startups, Part 2: Is There a Gender Wage Gap?”
Noam we have been looking at this for awhile. Feeder groups help explain. There are more women receiving PhDs than men in life sciences but the number of women at the undergrad or grad level in engineering/CS is extremelely low. Toby Stuart and Fiona Murray have done some work looking at this and there is a strong link ..or missing link tied to social neworks of woment in these two different spaces.
Definitely agree that the percentage of women in the science/engineering “feeder” pipeline has an important effect on this gender gap. Thanks for highlighting it!However, that would seem to be only a piece of the fuller puzzle. For instance, even the <>business<>-related positions in the table are systematically lower in IT than in Life Sciences, even though they should be less affected by those feeder factors. (The percentages in those positions are dramatically lower than the percentage of women getting MBAs, for example). Can we attribute all of the gap to feeder groups and social networks, or are there other important factors?More generally, the percentages of women in these startups (whether IT or Life Sciences) seem to be lower than the relevant feeder percentages I’ve seen. (Please correct me if the data I’ve seen are incorrect.) If so, is there something about startups that leads women to avoid them in favor of non-startups?
One further thought on the “feeder” effects: Do they help us explain the <>geographic<> differences in the data (e.g., why California is different from Massachusetts)?
Great blog, and you’re investigating some topics I’ve always been interested in. At first blush, regarding the gender gap, I can only conjecture based on anecdotal references. In my limited view, there are a couple things driving the dynamic, which I’m sure are already obvious…a) Investing in startups is a very clubby, relationship-driven industry. Betting on young ompanies is more art than science, and is based on an entrepreneur’s ability to establish trust with an early stage investor — which is often VC, and VC’s are often white males (easy to do that survey). Not to say that white males are biased against women, I don’t think that’s true at all. However, most people can more easily build rapport with people like them, that’s simply how humans are programmed. Furthermore, entrepreneurs frequently rely on a network of mentors and advisors who have had previous successful startups, who again, are primarily white male.b) Perhaps women are smarter than men ;) Entrepreneurship is not always what it’s cracked up to be! Founders put in long hours, rarely seeing family or significant others, and are generally obsessive about their ideas and businesses. And one’s odds of winning are probably smaller than winning the scratch lottery. People like to call it the work/life balance argument, which I think is not exactly right. Staying in a corporate job or as an independent consultant is probably the result of a more pragmatic risk-reward calculation, than a work/life balance argument.Regarding the life sciences gap, I’ll refer to my first point. Perhaps there is more opportunity to make rational decisions in earlystage life sciences companies. You already have a pretty strong thesis that doesn’t morph as much during the process. So the decision to fund a company is largely dependent on discrete and measurable milestones, making it more science, than art. And in that case, aninvestor may weigh the results of the science more than the relationship.
Not sure where else to write this, as I couldn’t find a contact form; great article in the recent HBR, “Transforming Leaders.” It really hit home at the perfect time for myself and some of the portfolio companies at my venture capital fund. - Scott from http://scottdig.com
Noam, I really find this interesting - and I was wondering if you could help with some related information? 2 days ago I posted a question on “the funded” asking if there was any information available about how many women founders of start-ups receive(d) VC funding? I must have hit a nerve: within less than 24 hours there were 13+ post and as of this afternoon, there are 20 +. One of the posts suggested I get in touch with you - so here I am :-)
Thanks in advance,
Bettina
bettina.bennett [at] whichboxmedia.com
When Furqan posted a link to this on Hacker News (http://news.ycombinator.com/item?id=534667), it generated three interesting comments. They are below.
COMMENT #1 (from jlees):
I found it quite interesting to click through to the previous post referenced in that article, as well: http://founderresearch.blogspot.com/2008/12/gender-gap-in-st…
He talks about the proportions of women in tech startups there. Funnily, the 12.7% women-in-IT percentage is more or less equivalent to the proportion of women on my undergrad and graduate computer science courses, and also nowhere near the percentage of female tech entrepreneurs I meet. (I've met two others, I think.)
However, I'm just doing what I want to do because it's cool and fun. Not because I want to fly a flag or be a statistic. I almost get annoyed when people draw attention to the gender gap, as it makes me even more of a three-headed monkey, and heaven knows I get enough strange looks as it is.
COMMENT #2 (from silencio):
Me too, but at a certain point when you are established in a way, you want to fly a small flag just to say “hey look, it's possible!” to other women.
When I was wee (oh god, I'm getting old?! but I'm only 20!) I was put off by how many men there were and how weird it was to be the only girl in my entire CS classes, and now I think I'm over most of it (except for the really hurtful/disgusting discrimination, not limited to tech or gender). However, I occasionally meet another woman or some girl barely a few years younger who was put off by gender discrimination in tech (in general, not just startups) permanently or was on the verge of doing so, and I try to get them interested again in one way or another by mentoring in a way. I think in that aspect it's worthwhile to attempt that at least. All the women I talk to about this have found it helpful to know that there are other women in the industry that have been successful and that not everyone is so rude.
COMMENT #3 (by jlees):
I wonder if there'll ever really be a way to mentor/help out women in tech without drawing attention to the gender statistics. I totally agree that helping others get interested when they are on the verge of being put off is a positive thing. But I still have this whole aversion to making us “special” and thus exacerbating the attitudes. Ho hum.
Thank you for the research. This is very interesting.
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