This month, Female Funders—an initiative of venture capital firm Highline Beta—released its second annual Women in Venture report. The document identifies female representation in venture capital, angel, and corporate investing, and researches the size of those funds.
The results reveal that only a tiny fraction of Canadian venture capital funds have female partners.
The review examined 55 funds across the country that are larger than $5 million CAD. Those firms represent an estimated total of $6.1 billion CAD in active funds. Using firm websites, LinkedIn, Crunchbase, CVCA Infobase, and other sources, researchers gathered the title and gender of 650 team members.
The investigation revealed that only 15.2 percent of partners at Canadian venture firms were women. While this is an improvement of one percent on 2018’s data (and higher than that reported in the U.S. this year by two percent) it remains a long way off from the 50 percent mark.
The report’s insight is important. Female representation and diversity at the partner level is proven to have a direct effect on which companies receive investment. Partners drive a venture capital fund’s financial decisions, raise the capital (including putting up some funds themselves), and manage the direction of the firm. Robust studies have shown that when more women are placed in these leadership roles, a greater variety of businesses receive funding. Deals are often motivated by pre-existing networks, and venture firms are nearly twice as likely to invest women-led startups if they have at least one female partner on their team.
As well as helping to close the gender gap between the number of men and women that receive funding for their ventures, investments made in women-led firms are more likely to be sound business decisions. Companies with a female CEO have been shown to perform three times better than those with a male leader.
As a result, a number of women in the VC space are calling for greater gender parity and support for women.
“Nothing prepared me for what it would be like to be a woman CEO and entrepreneur,” says Gerri Sinclair, managing director of Kensington Capital Partners and the BC Tech fund, in the report. “I had few role models or peers, and none of my investors were women. I knew that if I were to ever work in venture capital, I wanted to change that. I wanted to help women to access capital and grow their business. Today, we still don’t have enough women investors, and women founders aren’t sufficiently supported. The difference is that now, we’re recognizing it.”
Kate Wilson is the Technology Editor at the Georgia Straight. Follow her on Twitter @KateWilsonSays