Women who start companies attract considerably less investment than men. A major gender gap – in excess of 20pc – was highlighted in a Bloomberg analysis of US venture capital funding between 2009 and 2015. According to Bloomberg’s figures, investment for companies founded by women average $77 million compared to $100 million for start-ups run by men.
Irish statistics paint a similar picture. An investigation by the Irish Independent last year revealed that less than 3 per cent of tech venture capital in Ireland goes to companies led by women. And, as is the case in other markets, the average investment seen by male-run firms dwarfs that seen by female-run companies.
Uncomfortable as these figures are, this is not a new story.
“This is an area that is receiving a lot of commentary, and has been for some time. However, for all the focus and attention on why the numbers of women that either seek or receive VC funding are so small, nothing fundamental is changing. The trend is not improving,” says Eileen O’Sullivan, a financial markets consultant.
In O’Sullivan’s view, the glaring disparity is a “result of a marketplace that has undervalued and underestimated women in business and, specifically, within finance for generations”.
“Many of the arguments that are put forward as to why women are not seeking or receiving venture capital are the same ones that were rolled out 20 plus years ago,” she says.
It’s a hoary old list: a fear of risk taking, a lack of ambition, women not being ruthless enough, and more of the same. “It’s inaccurate and irritating,” O’Sullivan says.
Part of the issue could be the types of business that women are setting up.
“Female founded businesses tend to be smaller, in lower more stable growth business, such as food or retail. Of those that do start businesses, research shows that they tend to fund primarily from savings,” O’Sullivan says.
Ultimately, the VC investor has one goal: to make money. So why does gender even enter the equation?
Regina Breheny, director general of the Irish Venture Capital Association, doesn’t agree with the argument that investors are more inclined to invest in someone like them, from a similar background. “Irish VCs will invest in a technology or a business idea or an experienced team. They do not discriminate against women,” she says.
In fact, she’s encouraged by the female proportion of the Irish VC community — about one in five — which she says is a “very high proportion compared to the international industry”.
Still, the gap between men and women in terms of venture capital will take time to narrow. “Women are late to this investment space. When we have serial female entrepreneurs the numbers will even out,” Breheny says.
However, O’Sullivan thinks more than just time is required; instead she thinks a fundamental shift is needed.
“Politics and finance, in particular, have developed business customs and behaviours that are structured around the way men like to collaborate, make decisions and conduct business,” she says.
“Why are we trying to push women into conforming to male business practices and behaviours and finding methods of working around male conscious or unconscious biases? It has not worked before.”
On a more positive note, Crunchbase reported last year that the percentage of funded start-ups with at least one female founder increased from 9 per cent in 2009 to 18 per cent in 2014.
So are more female founders the solution to the VC gender gap? It certainly wouldn’t hurt.