Dow Jones recently
published a paper called “Women at the Wheel: Do Female Executives Drive Start-up Success?” which has some great
statistics about the success rates for VC-backed companies with and without
female executives, board members and founders.
The study analyzed
over 20,000 companies that received equity financing between 1997 and 2011 and
the sample size consisted of 167,556 executives (11,193 were female). Key facts that summarize the paper are listed below:
·
1.3% of the private companies have a female
founder, 6.5% have a female CEO and 20%+ have a female executive (C-level)
·
Median percentage of female executives at
successful companies (defined as completing an exit in the form of M&A or
IPO or consistently profitable) is 7.1% vs. 3.1% at unsuccessful companies
(went bankrupt, no longer exist, or currently stalled)
o One
point to note here is that it seems startups tend to hire more females as they
advance further along, so I believe this is part of the reason you see that
more successful companies have more than double the proportion of women than
unsuccessful startups (i.e. 83% of startups have no females but 60% of
companies have females on the team by the time they reach product development
stage)
·
The most common positions for female executives
were in Sales & Marketing and Finance and the industries with the most
female executives are consumer and healthcare
I found this study very relevant with all the press about women in startups and tech. Just last week Bloomberg TV
also aired a new segment called “Women to Watch” where they interviewed four women (a startup founder, a venture
capitalist, a VP of Engineering, and CMO of Facebook) who were all helping
change the culture of tech and startups in Silicon Valley. Many of the points
they mentioned to help increase the number of women at VC-backed companies
included getting younger women interested in tech and programming at a younger
age, but also creating a strong support and mentorship network that help open
up new opportunities for young women looking to enter these industries. I also think that as female executives are getting more attention in the media (i.e. Marissa
Mayer and Sheryl Sandberg), it will help inspire other women to take more risks
and have the courage to step up to more senior positions within startups and the
tech industry.
