Fast Company: Why The Few Women Venture Capitalists Often Give Up

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It’s no secret that women-owned businesses can’t get funding.

The statistics paint a clear and discouraging picture. Between 1997 and 2013, the number of women-owned establishments grew 1.5 times more than the national average (68% versus 47%, respectively) and women-led, venture-backed companies bring in 12% more revenue than male-led companies, according to research from Babson College. Despite this, only 2.7% of all venture-backed companies have a woman CEO. That’s 183 out of 6,517 companies or $1.5 billion out of the $50.8 billion invested between 2011 and 2013.

While it’s true that female entrepreneurs have made considerable progress, they still aren’t able to tap into investment opportunities anywhere near the same level that men can. Many blame the lack of funding opportunities for women on the shrinking number of women decision-makers in venture capital firms, which have declined from 10% in 1999 to 6% today.

What's Behind the Shrinking Number?

A lot of it comes down to women no longer thinking it’s acceptable to work in a model that hasn’t changed in decades. With more women entering the workforce, failing to reconsider or re-evaluate how this affects your industry can have detrimental effects on overall performance.

But fortunately, it might not be as bad as it looks. The dwindling number might just mean that more and more high-experienced women investors are leaving big firms to form their own and these reports only count women in funds upward of $250 million.

“As [these young funds] mature, they will have an outsized impact on the industry,” says Trish Costello, CEO and founder of Portfolia and cofounder of the Kauffman Fellows Program.