Where are the Women Entrepreneurs in Hi-tech Start-ups?
Why are there Noticeable Few?
There are many meetings in Silicon Valley about innovation, technology, start-ups, and entrepreneurs. If one of the panelists or speakers is a woman, inevitably someone asks the question why there aren't more women founders or more start-up women in technology and science. While the number of women small business owners hovers around 50 percent, the number of women founders of hi-tech start-ups is in the low single digits. What makes the technology industry different?
Many studies have calculated the numbers and percentages on this subject, but facts don’t tell the stories or give insightful reasons. Thinking back on numerous start-up companies I’ve had the pleasure of being involved with, only 2 percent to 7 percent of the technical staff were women – none had a woman as CTO, CSO, CIO, or Vice President of Engineering. Yet one CEO asked me one day why his start-up of 350 people couldn’t seem to attract more women engineers and programmers. It was great that he thought enough to ask the question, but his entire senior staff was men. I go to a lot of meetings whose target attendees are founders of start-ups. More often than not, I am one of only a couple of women in the meeting, and often the lone women in the meeting.
So what do women venture capitalists, entrepreneurs, and founders think is the reason why there are so few women starting high tech companies, and how do they think men are different than women this community? Below are some comments they’ve made when asked these questions.
There are many programs to encourage young women to enter fields of science and technology, but look at the number of women in senior technical positions. In 1989, 15 percent of engineering bachelor's degrees were awarded to women and 39 percent of the bachelor's degrees conferred in science were to women. These are the women that should be seen in senior management positions today. Delving into the companies listed on a recent Forbes’ Top 25 Hottest Tech Stocks, the statistics gathered on senior management teams showed no woman held the CEO position, 13 percent of the senior managers were women, and 1.9 percent of the women senior managers held a technical position. And while one can suppose that 25 tech companies will only have 25 senior technical positions, that’s not true. Many of these companies have multiple senior technical positions but virtue of the fact that they are “tech” companies. Similar statistics can be gathered from the Fortune 500 companies: 16 percent of the senior leadership teams were women and only 1.7 percent were women in senior technical positions. Business Insider’s list of the 40 Hot Start-ups in Silicon Valley and New York City showed 87 founders, of which only 3 were women, and 36 of the 40 start-ups were investor-backed companies - even a start-up focusing on women’s fashion was co-founded by three men.
Most women who hold senior management positions have come from sales, marketing, finance, legal, or human resources; they rarely come from engineering or product development areas. Yet, founders of hi-tech companies often have technical backgrounds. How many women hold the position of Chief Science Officer (CSO), Chief Technical Officer (CTO), Chief Information Officer (CIO), Vice President of Engineering, or Vice President of Research and Development? Not many. Women CEOs and founders tend to be from marketing and sales backgrounds.
Most venture capitalists admit that start-up investment is a high touch, personal business – investors fund people they like and everyone likes people like themselves. A recent survey showed that 70 percent of women funded by venture capitalists were funded by firms with at least one woman partner. There is a Silicon Valley angel investor group with 139 angel investors, all about the same age. Only 3 are women.
The competition for funding is always great. There are thousands of entrepreneurs proposing new technology projects to investors and only a very few get funded. Future women entrepreneurs need to mindful of their experience prior to seeking funding. Investors aren’t going to change; they are always going to put their money behind experience and successful track records.