Women: A Start-up’s Secret Weapon

Women: A Start-up’s Secret Weapon

If you are thinking about launching, or have recently launched, a start-up here’s some food for thought…especially if you plan on seeking venture capital financing down the road.

Do you want to increase your chances of success?
I’ll assume the answer is yes, so keep reading – and take notes.

A 2009 study conducted by the Kaufmann Foundation found that 19 percent of all companies AND only 1 percent of all high tech-focused companies started in 2004 were founded by women.

There have been a number of studies in recent years which aim to explain the lack of women in venture capital and venture capital backed start-ups. The bottom line is there are few women in the venture capital industry and in management roles at start-ups that receive VC funding. The whys, the hows, and the whos can be mulled over until the cows come home and is a discussion for another time.

Adding a woman (or more than 1) to your team statistically will increase your chances of realizing a successful exit compared to companies with all-male management teams. According to analysis by Dow Jones Venture Source, successful US venture-backed companies have more than twice the number of women in top roles than their unsuccessful, or less successful, counterparts.

Adding a woman (or more than one) to your team can make you smarter? Most definitely! According to research conducted by professors Anita Wolley of Carnegie Mellon University and Thomas Malone of the MIT Sloan School of Management, if a group includes more women, its collective intelligence rises.

Now, this is just personal opinion, but start-ups with female founders might also be more memorable. In 2011, only 12 percent of startups pitching to angels in the US were women-led. Out of this small fraction, 20.5 percent secured angel funding, which is above the average 18.3 percent financing rate (Centre for Venture Research)!

Oh and by the way, the benefits of having women on the management team can last well beyond the start up/venture financing phase. According to the National Center for Women & Information Technology, “companies with the highest representation of women in their management teams have a 34% higher return on investment than did those with few or no women.”

There are a lot of smart people in both Clean Tech and Venture Capital. Why they have not yet picked up on these secrets to success I don’t know. I attend many clean tech-focused events throughout the year and women are often in the minority. On the investor side it’s even worse. At a recent Canadian Venture Capital Association event in Vancouver, I was the only female in attendance!

Imagine how much better off we’d all be – entrepreneurs, VCs, and investors – if we all just added some [more] women to our teams.

Are you smarter yet?

Associate, Pangaea Ventures Ltd. Sarah is an environmental scientist and MBA who has been active in sustainability efforts for York and Dalhousie universities, as well as the City of Toronto's Environment Office.View Sarah Applebaum's profile on LinkedIn


  • Guest
    Hovav Gilan Sunday, 07 April 2013

    Interesting ? Any explanantion for this ?

Leave your comment

Guest Saturday, 25 January 2020