Understanding the Venture Capital Gender Gap

HBR IdeaCast

Harvard Business Review

Teams, Business/management, Marketing, Strategy, Management, Innovation, Finance, Entrepreneurship, Economics, Hbr, Business/entrepreneurship, Harvard, Business, Leadership, Business/marketing, Communication

4.3 • 1.9K Ratings

🗓️ 18 May 2021

⏱️ 24 minutes

🔗️ Recording | iTunes | RSS

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Summary

Jenny Lefcourt, partner at Freestyle VC and cofounder of All Raise, says that even as a serial entrepreneur herself, she long underestimated how little venture capital funding goes to female startup founders compared to the money men get. She believes unconscious biases, an industry built on intuition, and historical dynamics all contribute to this inequity. They also affect the low numbers of women in decision-making roles at VC firms. Lefcourt explains the ways the industry can actively reduce this gap.

Transcript

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0:00.0	So you got the job. Now what? Join me, Eleni Mata, on HBR's new original podcast, New
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0:30.0	Welcome to the HBR IDA cast from Harvard Business Review. I'm Kurt Nickish. Women have been
0:49.7	disproportionately affected by the COVID-19 pandemic. In the US, for instance, women left the
0:55.6	workforce at alarming rates, largely due to childcare needs in the year of schooling and working
1:00.9	from home. Also affected the limited numbers of female entrepreneurs. On the one hand, venture
1:07.4	capital firms in the US set a record high investing nearly $130 billion in companies last year. Much of
1:14.6	that money went into fast-growing categories like healthcare, remote work, and e-commerce. But
1:20.3	just 2.3 percent of that money, literally a couple of pennies per dollar, went to startups
1:26.3	led by women. That's down from about three pennies the year before, which although extremely low,
1:32.6	had been trending up. Now, Harvard Business Review has been featuring a lot of research and analysis
1:39.0	of this trend. Go to hbr.org and type in venture capital gender gap, and you'll find all sorts of
1:45.4	articles about how male and female founders get asked different questions when they pitch to VC
1:50.5	firms, and how it affects how much they get, about how the gender gap disappears when women fund
1:57.0	women. But also about how just 12 percent of venture capital firms have women deciding where
2:03.1	funding goes. These inequities are widespread, slow changing, and honestly, they just don't make
2:10.4	economic sense. Here to help us understand this ecosystem and what's happening is Jenny
2:15.8	left court. She's a general partner at freestyle capital in Silicon Valley. She also helped launch
2:21.6	a nonprofit called All-Rays that is trying to change the inequality in venture equity. Jenny,
2:27.9	thanks so much for coming on the show. Thanks for having me. How did you get into VC funding?
2:34.8	Well, I started on the other side, which is being the receiver of venture capital. I was a founder
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