Venture capital’s glass ceiling

Canada’s venture capital industry features a number of high-powered women in senior positions on the investment and executive teams of their firms. Like their male counterparts, these women source opportunities, evaluate risk, make tough investment decisions and manage portfolio assets.

Think of Ela Borenstein of BDC; Sophie Forest of Brightspark; Shermaine Tilley of CTI Life Sciences; Andrée-Lise Méthot of Cycle Capital; Geneviève Morin of Fondaction CSN; Janie Béïque of Fonds de solidarité FTQ; Michelle Scarborough of Fronterra Ventures; Élizabeth Douville of GeneChem; Shirley Speakman of MaRS IAF, Whitney Rockley of McRock Capital; and Jeanette Wiltse of Relay Ventures.

And let’s not forget  Nanon de Gaspé Beaubien-Mattrick, founder and president of Vancouver-based Beehive Holdings, a venture firm that focuses on investing in high-growth businesses managed by women entrepreneurs.

That’s to name just a few.

However, as impressive as the list seems, the reality is that female VCs are still far outnumbered in the top ranks of their organizations by men. That’s the key finding of an October 2013 report produced by MaRS Data Catalyst, the research arm of Toronto-based innovation hub, MaRS Discovery District.

The report, named ‘Women in Canadian venture capital: Where are they?’, found that just 15.5% of senior professionals in early-stage Canadian venture capital firms were women. That’s only slightly higher than the 14.6% share estimated by a comparable study done in the United States in 2012.

Malavika Kumaran, an intern at MaRS Data Catalyst and a student of economics, statistics and psychology at the University of Toronto who was lead author and researcher on the report, said its findings indicate that the Canadian early-stage venture capital landscape “is far from gender neutral.”

Kumaran told peHUB Canada that the findings were based on a review of the current employees of Canadian venture capital firms as listed on Thomson One, the database owned by Thomson Reuters (publisher of peHUB Canada). When she and her team narrowed down the lists to professionals with investment and related responsibilities, and then narrowed them again for gender, only 51 of a total of 329 employees were found to be women.

Helen Kula, data product manager at MaRS, agreed with Kumaran’s take on the report, saying it confirms a broader perception that the VC world is dominated by men. And while the existing body of research does not indicate gender imbalances necessarily prejudice decisions to fund technology startups founded and managed by women, it does point to some pretty significant challenges.

Kumaran and Kula argued that it is in the interest of all venture capital firms to address this issue – especially as the North American community of women entrepreneurs and women-led startups continues to grow and diversify.

MaRS Data Catalyst is planning to do further research on the topic, including holding interviews with senior Canadian women VC professionals about their market experience and outlook. Future research is also likely to explore such issues as the correlation between gender composition in venture firms and the number of women-led companies that reside in portfolios.

To learn more about the findings of Women in Canadian venture capital: Where are they?, please go to the MaRS website link here.

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