Gender, Leadership and Venture Capital: Measuring Women's Leadership in VC Firm Portfolios

Abstract

Women entrepreneurs have made some progress in obtaining venture capital funding, yet a wide gender gap exists. No uniform metrics or standardized criteria to identify and differentiate between women’s leadership roles in VC funded companies currently exists. Potential investors who are interested in gender impact are uncertain about the differences between VC fund managers gender diversity performance within their firm portfolios. Introducing transparent and uniform assessments for women’s leadership would address imperfect information by providing a tracking mechanism for identifying gender-oriented funds through their actions and not solely by their intentions. This paper introduces standardized definitions for women’s leadership in terms of: women-led, women-founded and women-managed. A number of studies have assessed a specific form of women’s leadership such as women-founded companies, yet no study to date has assessed and compared all three dimensions of women’s leadership. This paper also introduces a methodology and constructs an index to uniformly compare VC firm portfolio companies according to all three dimensions of women’s leadership.