The True Cost Of Poor Investment In Female-Led Funds And Investment Firms

By Bahiyah Yasmeen Robinson

The venture capital industry has a severe gender inequality problem. Only 12 percent of women make decisions at many VC firms, and most firms still don’t have any female partners. Female founding partners only make up 2.4 percent of all partners. This is key because the founding partners primarily control a firm’s investment decisions.

One of the results of this lack of gender inclusion in asset management firms is equally abysmal VC funding to female-led startups. In 2020, just 2.3 percent of VC investment went to female-led startups, Crunchbase data shows.

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The pandemic exacerbated this with a 27 percent decrease of venture funding going to women-led startups in 2020.

This lack of investment in women-led VC funds and startups has many reverberating repercussions throughout the U.S. and global economy.

Less representation = less innovation = less alpha

When half of the population is excluded from VC funding, there is an enormous loss to address half the world’s pain points, a missed chance to deliver products and services to a market with enormous spending power, and thereby a failure to tap into massive pools of alpha.

Bahiyah Yasmeen Robinson, CEO and founder of VC Include

Today, more than $10 trillion of total U.S. household financial assets are controlled by women. By 2030, women will control about $30 trillion in financial assets that the baby boomer generation possess—this substantial amount could potentially equate to the annual GDP of the U.S.

Having more diversity in boardrooms, C-suites, funds and startups is a way to incorporate diverse POVs, and include a wider experience base and intellectual capital.

Lost revenue

This glaring gender imbalance represents significant capital and returns being left on the table. For example, valuations for startups with at least one…

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