Think women investors fund women founders? Not necessarily, new report finds

It seems like a logical solution — to see more women-run startups succeed, bring in more women venture capitalists to invest in them.

But a new report from Bloomberg suggests it may not be that simple.

At 17 of the top venture capital firms, those with women as senior partners backed women-run companies at about the same rate as those with no female senior partners. And none of the top 10 private companies founded by a woman (including Honest Co. and 23andMe) raised money at an early stage from a female VC.

VC firms Felicis, Lowercase, Index Ventures and First Round Capital had the highest proportion of backing for female founders — even though none have women serving as senior investing partners, according to the Bloomberg report. Felicis had one, but she left for Lux Capital earlier this year.

And most female investing partners back just a few women founders, if any. In some cases that’s because the female partners are relatively new at the firm. But in other cases, Bloomberg found, women VCs are hesitant to invest in other women out of a fear of seeming biased — which may cause them to forgo good investments. And some women working as senior partners in predominantly male VC firms also may do extra due diligence in an effort to prove themselves.

That can lead to a bias in the other direction among some women VCs, as illustrated by a study Bloomberg cites on crowdfunding campaigns by the University of Pennsylvania’s Wharton School and New York University’s Stern School. While men didn’t care whether a project was created by a man or woman, two-thirds of women thought projects were better when told they were created by men.

Even so, male startup founders continue to have an edge over their female counterparts. Less than 10 percent of startups that raised funding between 2005 and 2015 had a woman on the founding team, according to PitchBook Data. But it appears female investors may not be able to solve that problem on their own.

Photo: Venture capitalist Ellen Pao is photographed on Wednesday, Sept. 7, 2016, in San Francisco, Calif.  (Aric Crabb/Bay Area News Group)



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