Even though women-owned businesses account for 40% of all privately held firms, they create only 8% of venture-backed start-up companies. A new article in the New York Times explores the reasons why women have such difficulties raising money for their start-ups.
Hurdles for women start with education. After all, men still outnumber women in engineering classes, even though women are now the majority of overall college graduates. Networks can also play a powerful role. Venture capitalists mostly come from business schools and start-ups, arenas where females are under-represented. As a result, women often have a harder time gaining insider access. Moreover, just 14% of venture capitalists are women, and people are often more comfortable working with those of their own sex.
Given that web start ups often attract more female than male users, and given the research demonstrating the benefits of diverse thinking, the benefits of investing in women should be clear. There are a number of organizations now catering to women in tech, including Astia, Girls in Tech, or the Forum for Women Entrepreneurs and Executives. They promote women’s start ups and raise awareness of the continued gender disparities in the field. Fortunately, things are starting to slowly change – but is the pace of change fast enough?
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