Patents, Not Sexism, May Be Reason Women Lag in Venture Capital

  • Study finds female applicants involved in only 19% of patents
  • Under-representation in STEM fields linked to funding gap

While women own more than a third of all businesses in the U.S., companies run by them get only about 3 percent of venture capital funding. Is that one more example of sexism in Silicon Valley?

Maybe not, according to a new study by the Institute for Women’s Policy Research, which found that the lack of funding may be partly explained by what it calls a gender patent gap.

For entrepreneurs and venture capitalists, patents are a bellwether of innovation. If a firm has a patent-worthy invention, it’s far more likely to get financing. Managers of startups reported that more than three-quarters of venture capital investors consider whether a firm has patents when deciding whether to fund it, according to the study.

The U.S. Patent and Trademark Office, in a working paper published in January, said that startups that obtain a patent are more likely to go public or be acquired.

Women participate in teams that obtain just 18.8 percent of all patents, according to the Washington-based IWPR. While those numbers are up substantially from the 1970s, the change is proceeding at such a glacial pace that it will take until 2092 for women to catch up, the study said.

Jewelry, Apparel

Women-led patents -- those where the primary inventor is female -- are even rarer. They account for just 7.7 percent of all patents. And in those cases, the report said, most of the innovations were concentrated in patent technologies “associated with traditional female roles, such as jewelry and apparel.”

Women’s lagging role in inventions is also partly due to their under-representation in studying science, technology, engineering and mathematics, or STEM. Women earned about a third of all STEM degrees in 2010, and less than 20 percent of engineering degrees.

Patent Office Director Michelle Lee, the first woman to hold the post, has made it a priority to promote women in the sciences. At a time when companies are unable to find the talent they need, “It is an economic -- not just a social -- imperative that we nurture and develop all of our talent,” Lee said in March at a Senate luncheon.

Lee, a computer scientist and former Google executive, has launched programs to introduce schoolchildren to science subjects and has partnered with the Girl Scouts to develop a patch on intellectual property and innovation.

The one bright spot in the study: Diverse teams of inventors produce patents that are more useful than those developed by either men or women alone, in the information-technology field at least. Diverse patents are cited more often by later patent applicants, indicating that they’re more useful and influential.

— With assistance by Susan Decker

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