Inc. Magazine: Another Reason for Women Entrepreneurs to Seek Out Female Investors

getty_533979145_100805By Kimberly Weisul

We all know that women get precious little venture capital funding: Only three percent of venture capital goes to female CEOs, according to Babson College. And that might be because so few women become venture capitalists: Only six percent of investing partners are women, also according to Babson.

Now, here’s the twist. New research published in the Harvard Business Review shows that if you’re a woman starting a company, you and your startup may be better off without all those guys. In fact, writes Sahil Raina, an assistant professor of finance at the Alberta School of Business who did the research, women entrepreneurs are much more likely to achieve successful exits if their investors are other women.

Raina used Crunchbase to compare startups that were female-led with those that were male-led, and then to look at the gender of their backers. Overall, he found that female-led startups were less likely to achieve a successful exit than male-led startups. About 17 percent of female-led venture-backed startups had a successful exit (in the form of an acquisition or an initial public offering), compared with 27 percent of male-led startups.

Click here to read more.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s