The Future of Venture Capital is Female

What comes to mind when you think of venture capital (VC)? Men in suits? Men in hoodies? Men in fleece vests? You’re right. Since the inception of the asset class in the 1940s, venture capital in a nutshell is men writing checks to men.

A global report by All Raise in 2019 found that only 12% of VC firms and business angel groups had women in investment decision-making roles. Another study by Women in VC also found that only 2.4% of women VCs are founding partners in the US, who control investment decisions.

Women make better investments

Pitchbook fund performance data shows that 69% of VC firms that scored a top-quartile fund between 2009 and 2018 had women in decision-making roles. This indicates a strong correlation between female investors and high returns. So checks are written by men, but who cashes in these checks? According to Crunchbase, female founders received a mere 2.3% of VC funding in 2020; this dropped from 2.8% in 2019. In Europe, female founders received a dire 0.7% of the total VC funding, which translates to roughly € 400 million, according to Pitchbook.

Xiao Jean Chen
...founded Venture Pole, an AI-powered venture investment platform, in Switzerland. She is a startup investor and mentor at Startupbootcamp accelerator. She also champions gender equality as ambassador of Google Women Techmakers. She is defending her PhD in Organizational Studies at the University of Zurich.

Women are better investments

Let’s take a look at the numbers. From 2019 to 2020, female-founded exits increased 16% year-over-year, while male-founded exits fell by 2%, Pitchbook data reveals. Furthermore, the female CEO exit value soared 30%, while the male CEO figure plummeted 44% between 2019 to Q3 2020. The VC industry is run by a giant boys club and we want to break it.  At the institutional level, the European Women in Venture Capital Group led by Kinga Stanislawska is already taking action and trying to make the VC pie more equitable. This year, they presented a report on the state of VC funding to the European Commission and the European Investment Bank along with a host of recommendations. This includes a € 3 billion European fund-of-funds for female-led venture firms, offering tax incentives to those who invest in female-led funds as well as organizing relationship-building events to broaden the female-led VC ecosystem.

Over the past year, we have moved the needle. Recently, Paris-based Revaia just secured € 250 million in its first growth fund. Co-founded by Alice Albizzati and Elina Berrebi, it claims to be “Europe’s largest female-founded VC fund”. Meanwhile, the female-led VC firm Crowberry Capital also launched a $ 90 million fund – which is reportedly the largest in Iceland. The seed and early-stage fund, Crowberry II, plans to focus on Nordic startups.

The future of VC lies in, well, literally the future – the most successful venture investors are aggressive visionaries who can clairvoyantly imagine the future for mankind, and bet on it early. The future of venture capital – and mankind – is, in my opinion, female.

Gastkommentar: Xiao Jean Chen
Opinions expressed by Forbes Contributors are their own.

Dieses Gastkommentar erschien in unserer Ausgabe 8–21 zum Thema „Women“.

Up to Date

Mit dem FORBES-NEWSLETTER bekommen sie regelmässig die spannendsten Artikel sowie Eventankündigungen direkt in Ihr E-mail-Postfach geliefert.