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VCs That Back Women Beat Those That Don't

VCs That Back Women Beat Those That Don't
Photograph by Jutta Klee/Gallery Stock

Venture capital firms that invested in women-led companies outperformed those that didn’t, according to a new analysis of a decade’s worth of VC deals.

What’s more, the VCs that did invest the most in women entrepreneurs were less ingrained in the Sand Hill Road network. “Venture capital firms that don’t have the social ties—the social capital with other VC firms—those firms are more likely to invest in a women-led businesses than venture capital firms that are very well connected,” says Joy Godesiabois, a professor of entrepreneurship at the Colorado School of Mines, the paper’s lead author. The study, conducted for the Small Business Administration’s Office of Advocacy, also found that after VCs first invested in women entrepreneurs, they were more likely to do so again.