The Gender Gap in Corporate Venture Capital

This week, we released the 2019 Women in Venture Report – a project we’ve undertaken with Female Funders to understand the state of gender diversity in early-stage funding.

This year we looked not only at independent venture capital firms, but also at corporate venture groups. Why? Because corporate venture is playing an increasingly more important role in our overall funding landscape.

As working across the corporate-startup divide through investments, partnerships, and acquisitions has become mission critical for market incumbents, more corporations are launching or doubling down on their venture arms.

Corporations are investing more capital, in more startups, and at earlier stages than ever before. And without women at the table, both companies and startups will lose out.

So what did we learn about women in corporate venture capital?

Report Findings:

Only 15.9% of top decision makers are women

Of all partners and investment executives at the 113 firms we looked at, only 15.9% were women. Why does this matter? It’s impacting corporations and startups alike.

Having women in leadership roles at firms may shape how those firms invest. There is consistent data showing that deal flow is often sourced from pre-existing networks. Venture firms are twice as likely to invest in women-led startups if they have at least one female partner on their team.

But corporate venture capital executives more than invest in startups. They help connect startups to new customers or advisors. They often find opportunities for the core business to leverage the technology, networks, and learnings of the startups in their portfolio. Without women at the table, both corporations and startups lose out.

Most of the women who make it to the top come from within the company itself

Roles senior leaders (partners and executives) held before their first corporate venture capital role:

Corporations have an opportunity to fill the gender gap that other venture capital firms don’t have.

There are two common paths to partner at an independent venture capital firm: as a successful operator with a significant exit, or by rising through the industry ranks from associate to principal to partner.

Our data tells us that corporate venture capital, however, is different. Leaders in corporate venture capital are more likely to enter the space from within the company than from elsewhere. This seems to be especially true for women.

Empowering women corporate and technology executives to take roles in corporate venture to enter the world of venture investing will not only create immense value for their companies – it will also unlock untapped networks and industry knowledge for the founders they back and the firms they co-invest alongside.

As seniority increases, representation drops

Corporate venture capital professionals at all levels are gatekeepers for startups – to more than just investment. Often these teams support portfolio companies in forging partnerships, launching pilots, procuring contracts, or other support that can impact their ability to scale.

Creating opportunities for mentorship and sponsorship, and planning for career advancement of corporate venture professionals will benefit corporations and founders alike.

Some industries are approaching balance on their investment teams. Others, not so much

While upwards of 30% of investment team members within CPG and Healthcare are women, less than 20% of those within Media and Entertainment, Telecom, Manufacturing, and Automotive are women.

Interestingly, in 2017, the Angel Capital Organizations found that Angels are most likely to come from Health, CPG, Financial Services, and Technology.

These sectors had among some of the highest representation of women on their corporate venture investment teams, ranking near the top of sectors represented.

Take Action:

Corporate Venture Groups & Funds

Create opportunities for education: Empowering female leaders to develop the skills and knowledge of investing through the lens of venture capitalists and angel investors strengthens their existing expertise to identify opportunities for innovation.

→ Bring a Female Funders Cohort to your company

→ Volunteer your firm to speak on industry panels to university students, and increase awareness about career paths in venture capital (Canada only)

Make measuring diversity part of your investment strategy: By regularly measuring and reporting on metrics, corporate venture groups have an opportunity to benchmark and identify gaps.

→ Template from the ILPA to measure firm diversity

→ Use this open-source D&I survey from USV

Individuals and Executives

**Take your place in the venture capital landscape: **Thinking about leveraging your capital and expertise as an investor? Female Funders Angel Academy provides the tools, knowledge, and network to confidently build your plan.

→ Apply for Female Funders Angel Academy

Leverage your experience to support women on their investment journey: Experienced investors can volunteer to become a Female Funders Mentor, and support women as they leverage their expertise and capital as angel investors.

→ Volunteer to mentor new investors with Female Funders

Read the full 2019 Women in Venture Report on FemaleFunders.com