Trends in Diversity Among Venture Capitalists

Amid an industry reset, where fundraising is squeezed for both VCs and founders, investors tend to revert to what they know; the tried and tested. AKA ‘pattern recognition’. So while depressing, there was little to shock us in the Carta Equity Report for 2023, which included the following:  - Only 4.6% of funding to pre-seed companies on Carta went to women-only founding teams this year. (Down from 6.3% in 2022) - The percentage of Black founders has fallen from 3.9% in 2021 to 2.7% in 2023. - The percentage of founders who are women declined this year. For companies incorporated in 2023, 86.8% of founders were men, the highest rate in the past six years. The proportion of founders who are women (13.2%) is the lowest in the last six years. And as a reminder, the VC industry itself is only marginally better: - In 2022, women represented just 16% of GPs at U.S. VC firms with over $50M in AUM. (source: PitchBook) - In Europe, for every woman VC there are > six men, and women hold just 13.5% of GP roles (source Atomico, via Insider) - In 2022, companies founded solely by women garnered just 2% of the total capital invested in venture-backed startups in the U.S. (source: PitchBook) - More promisingly, startups founded by mixed female and male teams received 16.5% of total VC capital invested in the U.S. last year. (Source: PitchBook) Techstars is a universal investor, which means we invest in standout entrepreneurs, regardless of background, race, gender, age and geographical location, because that’s where we believe the best returns lie. While we still have far to travel, I’m so proud that this year, across over 700 investments, we have far out-performed the wider industry:  U.S. investments in 2023: - Gender Diversity (including non-conforming) - 27.4% - Ethnic/Racial Diversity - 43.9% - Total Diversity - 69.3% Non-US investments in 2023: - Gender Diversity (including non-conforming) - 21.4% - Ethnic/Racial Diversity - 20.2% - Total Diversity - 44.3% Overall investments in 2023:  - Gender Diverse (Woman only) - 24.5% - Gender Diversity (including non-conforming) - 25.2% - Ethnic/Racial Diversity - 35.7% - Total Diversity - 60.4% We haven’t taken this approach because it’s ‘the right thing to do’ (although it is!), but because we the largest financial upside often lies not in following the VC pack, but in going where most other investors do not – and in many cases that is traditionally underrepresented entrepreneurs. https://lnkd.in/eYYXN_nd #techstars #startups #VC #fundraising #VentureCapital #startups #growth #founders #Entrepreneurs #preseed #seed #womenintech #womeninvc #diversityintech #blackentrepreneurs #blackfounders

An important new analysis of the 2024 VC landscape reveals critical insights into the persistent gender disparities impacting female founders and investors. My latest Forbes article, "Female Founders And Women VCs: An Unrealized Opportunity For Investors," highlights key findings from PitchBook's "2024 US All In: Women in the VC Ecosystem Report:" 📉 Declining early-stage funding for female founders signals a concerning trend. 📈 Record exit shares achieved by female-founded unicorns demonstrate their significant potential. 💰 Compensation progress for junior-level women VCs contrasts with persistent senior-level gaps. 👩🦰 Increased representation of women in VC decision-making roles is crucial for equitable change. 🤝 Expanding investment opportunities for women LPs is essential to support diverse venture funds. The data underscores the urgent need for collective action to address these disparities and unlock the full potential of women in venture capital. This is an important read for anyone invested in the future of innovation and economic growth. Read the full article here: https://lnkd.in/eG-xuaUV Annemarie Donegan, Jody K. Thelander, J. Thelander Consulting, Julie Castro Abrams, How Women Invest, How Women Lead, Jo Ann Corkran, Loretta McCarthy, Golden Seeds #VentureCapital #FemaleFounders #WomenInVC #Investment

"The chronic underfunding of Black, Hispanic, and Latine founders only got worse in 2023...Only 0.6% of all dollars invested through priced venture rounds in 2023 went to companies with a Black founder, compared to 1.68% in 2022. Hispanic and Latine founders experienced a similar decline, with just 1.02% of #VentureCapital raised in 2023 compared to 2.6% in 2022 and nearly 4.6% in 2021. *77.7% of new co-founder teams did not include a single woman or non-binary person. This is a higher rate of teams made up only of men than the previous 5 years. When women are part of founding teams, they often receive less equity than their co-founders who are men. The exception is teams of two, where founder equity is often split equally. In teams with more than 2 founders, co-founders often prorated equity, rather than splitting equally among founders. In these cases, women tend to receive less #equity than their counterparts who are men.... *White men receive about 3.4x more #equity value than white women, whereas East Asian men receive 2x more equity than East Asian women. Among all these groups, the largest gap between the percentage of employees and the percentage of equity is among Hispanic women. They account for 2.39% of all employees yet receive just 0.94% of equity value.... *The proportion of new equity-receiving hires who are women dipped slightly to 35% in 2023, the first annual decline in the past decade... *Over the past 4 years combined, 78.7% of #startups raising priced rounds did not have any women or non-binary individuals on their founding teams. *73.1% of funding for priced seed rounds went to founding teams made up entirely of men... *Women-only teams raised only 2.8% of all venture funding this year, the first time in the past 4 years that figure has fallen below 3%.... Our data shows that this environment has had an outsized impact on women founders and founders of color. While previous years showed some progress, this year is a reminder that time alone does not move us forward. Across the startup ecosystem, we must work actively to build a more fair and equitable industry." all excerpts and charts in image below from Carta report credits: Editorial: Kiley Roache, Kevin Dowd, Zoran Basich, Peter Walker #Data: Lucy Wang, Irvin Ding, Winston V. #Communications: Lauren O'Mahony, Tania Zaparaniuk 🇺🇦, Jessica Capibaribe Web: Alex Danoff #Leadership: Mita Mallick, Jane Alexander, Julia King Link to full report (a must read): https://lnkd.in/evpFzYix Carta Team - #InspiredByYou all of you! #gratitude Does this data make you wonder: who is the most marginalized? #intersectionality #systemschange #entrepreneurship #finance #investing #assetmanagement #economy #innovation #power #business #money #cultureofmoney #NotJustVenture #UniteforChange #FearlessFreedom