8: A Not So Lucky Number

Quick:  what do these things have in common:

• Number of legs on an octopus
• The number of “maids-a-milking” in the 12 days of Christmas
• Number of vegetables in a V8
• The % of venture capital dollars that female founders raised in the first half of 2010

If you said “the number 8,” you are right on the money.  And I do mean money.  8% of venture capital dollars in the first half of 2010 went to women entrepreneurs?  Thank god it’s not called a V3.

Lizette Chapman recently wrote an article about this sad phenomenon in Fast Company, citing a recent study done by CB Insights.  The good news, she says, is that this number is up nearly 5% from what was reported in the year 2000.  Yay! The bad news, of course, is that women make up about 51% of the population and are getting a tad less than their proportionate share of the venture capital pie.  Boo!

Maybe women entrepreneurs are just smart enough to stay away from venture capitalists, many of who are not known for their abundant charm and helpful disposition.  However, I am guessing that plenty of women CEOs would be willing to put up with me and my VC colleagues if it helped get their business off the ground more effectively.

Chapman lists reasons for hope that this lopsided dynamic may change over time, notably:

• the number of women receiving their PhDs in the U.S. now outnumber the men
• there are more females entering as MIT freshmen than men, and;
• there are more women filed as “single head of households” than men

There has also been a marked increase in networking organizations that focus specifically on supporting women entrepreneurs.  This is important since lack of adequate networking opportunities is one of the key reasons used to explain the poor showing at ladies’ night.

Given that women make up nearly 15% of venture capitalists (itself not exactly cause for jumping out of a cake, but still better than 8%), it would be nice to think that we could rapidly get that 8% up to 15% if women (and other) VCs spent some specific energy looking for women-led deal flow.  Naturally, none of us would invest in a company just because the CEO walked in wearing a dress, but it would be great if we could all make just a little extra effort to find the great female entrepreneurs and support them by participating in such organizations as Astia and Forum for Women Entrepreneurs and Executives where female start-up CEOs congregate.

So my challenge to all of us, including myself, is thus:  when we revisit this study again in 10 years, my blog post should start with:

What do these things have in common:

• the first point value in a tennis game
• number of minutes of fame that Andy Warhol thinks everyone will have
• the % of venture capital that was raised by women entrepreneurs in the past 6 months

Don’t worry, we don’t have to stop there.  If we are successful in achieving that objective, we can always set our sights on 51%.