Understanding Gender Bias In Venture Funding

USV portfolio company goTenna‘s founder and CEO Daniela Perdomo and USV analyst Dani Grant did some number crunching on VC funding and published the info last week.

The good news is that in business sectors where women are well represented in the customer set, women founders are raising more (on a pro-rata basis) than their male counterparts.

The bad news is in the rest of the business sectors, women founders raise a lot less (on a pro-rata basis) and in “deep tech” the numbers are particularly bad.

These conclusions ring true to me based on what I see in the market.

I believe women founders have made a lot of progress in the last decade in raising VC. There are many more of them approaching VC firms for capital and many more of them getting funded. But it seems most of the progress has been in sectors where women are well represented.

The progress in sectors where women are not as well represented is almost non-existent. We in the VC sector need to understand the conscious and unconscious biases at work when we meet with a women founder working in one of these under-represented sectors and fight them off.

Founders like Daniela, when they are successful, will help a lot. There is nothing like success to change people’s opinions, conscious and otherwise.

#VC & Technology

Comments (Archived):

  1. Richard

    This doesn’t offset USVs attempt to make 40% annual returns* – on the $ float of issuing “Libra” -off the sweat of uneducated women.Why not share the Libra business model?*dont cry grumpy Richard, see today’s wsj

  2. OldManGoldenwords

    Equality of opportunity YES. Equality of outcome – NO.

  3. JLM

    .Female founders will be held hostage to the representation amongst funders — VCs — of their gender. Meaning if VC is male dominated they will fund IAW with their own hiring lens.Look how long it took USV to find a woman partner and y’all are “woke.” Seriously, how long had you been beating the drum before you acted?The real tragedy is that VCs are missing out on great founders.Thirty years ago I was hiring the top finance woman grads from the Univ of TX because they couldn’t find jobs on Wall Street.They were easily the best slice of hiring as good as ex-military school, combat arms officers, with MBAs.Totally pragmatic decision on my part, not an ounce of altruism or “woke.” Just plain common sense.So, you have to think — VCs are just not that smart.Gender neutral is the fair play. Gender bias in favor of the untouched slice — funding women — is the smart play.JLMwww.themusingsofthebigredca…

    1. JamesHRH

      It’s the lack of probing inquiry that’s so disappointing – just default to bias.Any chance that the deep tech sector doesn’t attract the kind of female product visionaries that attract huge amounts of capital?I don’t know but neither does anyone who had their hands on this data because they couldn’t imagine it’s possible.I mean, look at Cloudflare. Dynamite female founder. Product visionary? Not her.

    2. Lawrence Brass

      This is the same that goes on in politics. Why women don’t have equal gender representation in Congress? Choose any country. There are roadblocks installed starting from the local organizations, through parties up to the chambers.I don’t think that asking, expecting and waiting for gender neutrality is the way to go. It is very simple. Women should stop voting for male representatives and take back their power.Don’t ask for it, take it. It is already happening.

  4. Kirsten Lambertsen

    Also, more women in VC will help move the needle 🙂

  5. sigmaalgebra

    E. Fromm: “Men and women deserve equal respect as persons but are not the same.”E.g., my brother’s family has two children, both too young for kindergarten. The girl is deep into reading lessons. The boy is deep into mechanical toys and computer games. That was all just natural — no way did the parents, or peers, influence that difference.As many families with both boys and girls have discovered, just naturally, from quite early on, (i) the girls are good with people and (ii) the boys are good with things. The girls have better verbal aptitude, e.g., for reading and writing, and the boys have better quantitative aptitude, e.g., spacial relations, geometry.Could come up with a long list of activities and measures of success. Then, if males and females were both on average and variance, or even just on average, the same on each of these activities and measures, then there would be only one gender! Darwin screams “No way!”, and he is correct. Soooooo, there will be differences.I know; I know; especially if we want to be politically correct, we want equality in every way we can see. Fromm’s explanation is that the French Revolution (started by three years of crop failures in a row from the Little Ice Age) gave Western Civilization the idea that any observable difference was a threat of tyranny — not one of the better ideas from France.The article mentions “fair share” as if there should be no difference. So, the claim seems to be that any difference in outcomes must be due to something unfair; this claim is close to what Fromm said about the idea from the French Revolution and leads to confusion and waste down to death — e.g., my late wife who near her end lamented “this equality stuff got me into a whole lot of trouble.”. Do NOT go there.Gee, I like accomplished women! At the top of my list are women good at being wives and mothers. But, I can also admirehttps://www.youtube.com/wat…https://www.youtube.com/wathttps://www.youtube.com/wathttps://www.youtube.com/wat…but they are different fromhttps://www.youtube.com/wat…https://www.youtube.com/wat

    1. JLM

      .In the end, parents are required to RAISE their children. You cannot leave them to the winds of chance.I made my kids play sports — both were good. My daughter, I made play basketball with the boys. When she went to high school, she was tall and played center for the varsity (girls) her freshman year.In the end, she won 11 varsity letters.Today, she is a successful co-founder and has worked for two other startups (Uncommon Goods, Bustle) and learned the startup gig.She was recently in Southern Living mag — every Southern girl wants to be in SL one time.https://www.southernliving….I guided No 1 Son into investment banking and then politics. He is the assistant campaign manager and chief fund raiser for the most important Congressional race in the US — NC 9th Dist which has a “do over” election with national implications. Trump is likely to make a visit.None of this happened by accident. I was always the “bad” Daddy. But, I had a policy that if you called me at 2:00 AM and needed a ride home, I would come get you and your friends, and there would be no questions asked. I got more than a few calls.When my kids went to college, I made them major in subjects that they could find jobs. My Perfect Daughter wanted to be a sculptor, but she ended up at the top of her class in graphic design.Kids are ours only to shepherd onto the starting blocks in life. Until they have their own children, then you can spoil the Hell out of the grandchildren.JLMwww.themusingsofthebigredca…

      1. sigmaalgebra

        In the SL piece, she looks TERRIFIC! Great congrats. You get an A+ star on your cap, a scout parenting merit badge, …, etc. and, best of all, the joy of having such a “perfect daugher” and now “perfect granddaughter”.Amazing: I’ve seen some women, too few, who did really well, seemed happy doing it, etc. And I’ve seen too many women, some with mountains of advantages, who fell apart for no apparent reason.

      2. Amar

        Yes 100% to the RAISE issue. It feels like there is too much compartmentalization between the “parent” persona and the “business” persona of of an entrepreneur / investor / VC, etc. It might be time for people to rein in this compartmentalization and apply common sense.From today’s Bloomberg “Fully Charged” newsletter:My resounding takeaway: Even the most well-meaning parents were on the losing end of an intensifying battle. One mom I spoke to woke up at dawn every morning to log into her daughter’s TikTok account and remove all the nasty comments left while her child slept. Another mother, writer Anastasia Basil, went so deep down the dark hole of TikTok videos featuring young girls provocatively dancing, self-mutilation, and anorexia, she banned her 10-year-old from the app. Kids I spoke to talked about the anxiety of keeping up appearances on their social media sites and all the naked photos that strangers — and friends — would ask for on a regular basis.The most illuminating person I met throughout the reporting, though, was Officer David Gomez, a policeman in Idaho whose job it is to keep kids at the schools he works at safe. When he started working as a school resource officer seven years ago, he thought it would involve breaking up schoolyard fights or keeping drugs out of the classroom. Besides an outdated Myspace page, he knew little about social media. But he quickly realized it subsumed the kids. It was at the root of all their problems.In our latest episode of Bloomberg’s Decrypted podcast, my colleague Pia Gadkari and I peek into David’s world. He shows us how he quickly got up to speed on social media and how he uses accounts on Snapchat, Facebook, TikTok and Instagram (created under fake names) to keep an eye on who his students are talking to and try to head off trouble. Take a listen here.This is absolutely nuts. Either none of the folks building this, funding this, marketing this:1. Have kids < 18 2. Or don’t see a problem with their kids using this completely differently than how the kids they are marketing to are using this3. Live in an ends-justifies-the-means and hard ethical issues shouldn’t get in the way of growing business.We as the tech community should be spending more time addressing this problem than questioning why decentralized crypto currency hasn’t hit tipping point yet. Yes, the latter will make a couple 100,000 people incredibly wealthy (please spare me the it will make the world a better place in 10 years narrative) but the former is screwing up a whole generation.

  6. sigmaalgebra

    Ah, how to have great nights late on the town, sleep late, take it easy, and STILL get the blog posts in early???? SURE: Move to Paris!!!!

    1. Lawrence Brass

      Or, have a broken circadian clock.Go to bed Dr. Sigma! 🙂

      1. sigmaalgebra

        My clock is okay, but I’m up late getting some stuff done.

  7. Linda holliday

    If VCs were the brilliant “Pattern Recognizers” and “data-driven” deciders they fancy themselves as, females would be one hot thesis! (present company excluded)

  8. joahspearman

    This is not surprising because I’ve seen this happen first-hand with black founders as well. Super talented founders of companies like Walker & Co., Blavity, Mayvenn and Squire are finally getting (some) love from Silicon Valley VCs for starting companies with a keen focus on black customers and users, but black founders focused on general market issues are not being backed with nearly the same magnitude. It’s hard enough being a black founder in tech, but having to be one that is focused on a problem that VCs (mostly white and Asian men) perceive as a “black people problem” is completely unfair to the founders.