In 1999, Babson College’s Diana Project published its seminal report on the state of venture capital investments in female entrepreneurs. This report set out to examine why fewer than 5% of all ventures receiving equity financing had women on their executive teams. While antiquated logic might have left you to quickly surmise that female entrepreneurs were neither prepared nor motivated to found high-potential businesses and as a result, were not good candidates for venture capital investors, the Diana Project report actually found stark evidence to the contrary.
Women indeed had the skills, expertise and experience required to lead high-growth ventures, yet, despite their preparedness and qualifications, were consistently left behind.
Fast forward to the second iteration of the report published last year. Unlike the bleak picture the original report drew, time shifted the landscape in the favor of female leaders. While there is still much progress to be made, the 2014 report uncovered immense growth. In fact, data from the report showed that between 2011 and 2013 more than 15% of the companies receiving venture capital investment had a woman on the executive team, compared with just 5% in 1999, proving that given the chance and access to the right networks, women can command equity financing to grow their businesses. And, to further show that women can and will succeed when given the opportunity, First Round Capital discovered just this week that their investments with a female founder performed 63% better than those with all-male founding teams.
Check out our infographic to get the full story on the economic impact of female entrepreneurs: