Performance of female VCs equals, exceeds industry average


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Photo illustration of woman taking of courtesy of ©iStock.com/akindo

Diversity, particularly in regards to female VCs making investment decisions at venture firms and within corporate venture capital, has become a hot topic of discussion in recent years.

We know anecdotally and from countless media reports that women are underrepresented in the VC community.

But we just haven’t known for sure how many women occupy the partner ranks at venture firms and how they’re doing.

That is we didn’t know until now. On our affiliate VCJ site this morning (for subscribers only) I have a story that delves into how the proportion of women VCs nationwide has dropped in the past two years, but their performance is on par with if not better than the industry average.

That’s one of the findings from Women.VC, a San Francisco nonprofit that has tracked the numbers of women in VC and found that the overall performance of their portfolio companies is 3.78x, ahead of the overall industry average.

In my story on VCJ, I describe how the organization derived at the figure, how it compares to industry benchmarks and how the performance number is not perfect, but a good indicator to mull over.

“We choose not to continue whining and boiling over number differences, but to show that women VCs are doing what any VC would be doing and doing it better than average in the industry,” Renata George told me. She’s co-founder of Women.VC and managing director of Zenmen Venture Fund.

The report is part of the group’s broader effort to raise and strengthen women’s profile in the venture community.

Renata George
Renata George, co-founder of Women.VC and managing director of Zenmen Venture Fund.

In partnership with PE Hub and VCJ, Women.VC surveyed the industry and reported that as of June 30, 253 women were active venture capitalists nationwide. That’s 15 percent below the five-year high of 296 in 2014.

The report, which Women.VC plans to update annually, shows that almost 20 percent of active women venture investors work for corporate VC funds. And the organization found that women VCs are more likely to be found in healthtech and life sciences than in software. The list focuses on active partners who make investment decisions and does not include marketing partners, chief financial officers and similar non-investment roles.

George said the group is preparing an interactive Google map that shows where all women VCs are based. Another aspect of Women.VC that’s worth highlighting is that their website (http://us.women.vc/) profiles all the female VCs, complete with links to their Twitter accounts and LinkedIn pages. Soon to be added are the links to their blog posts.

It’s an interesting list to scroll through, and it’s one that entrepreneurs should find useful. I also found it informative, such as I didn’t know that Shawn Byers, who’s married to Brook, is founder and managing partner of the MITS Fund.

Women.VC is also researching a similar list of women investors in Europe, which it plans to release in first-quarter 2017, as well as Asia, which they aim to finish later.

But the issue of women in VC and their performance is what is most fascinating, especially given recent events, such as the billion-dollar sales of Dollar Shave Club and Jet.com.

Forerunner Ventures, founded by Kirsten Green, was the lead backer in Dollar Shave Club’s first round of funding in 2012. Cowboy Ventures, founded by Aileen Lee, was also an investor in Dollar Shave Club, which Unilever agreed to buy for $1 billion.

Kirsten Green
Kirsten Green, founder, Forerunner Ventures. Photo by Oscar Urizar, Red Eye Collection, for VCJ.

Forerunner also invested in Jet.com, which Walmart has agreed to purchase for $3.3 billion.

“Forerunner and Cowboy are aspirational. It’s very cool what they have done and that they have women partners,” said Beth Engel, an early-stage investor at Dundee Venture Capital of Omaha, Nebraska. “The attention they’re bringing to the industry is great.”

And as Women.VC shows with its study, the performance of women venture investors is on par with or better than the average in the venture industry.

Beth Engel Women
Beth Engel, Dundee Venture Capital. Photo courtesy of the firm.

Photo illustration of woman taking off courtesy of © iStock.com/akindo

Clarification: PE Hub misrepresented the 3.78x performance figure of women VCs in the study, by saying that the figure was net return multiple. Actually, Women.VC reported that the overall performance of the portfolio companies of women VCs is 3.78x, calculated as if all the investments were in one massive venture fund. After management fees, carried interest and other possible expenses, the return multiple still remains above 2x, according to Women.VC. More information is available in the study synopsis.