When venture capital firm Albion VC reviewed its investment portfolio, it unearthed a rather telling statistic: women represented only about 20 percent of the founders. For those of us who envisioned VCs as the champions of diversity, this might be a sobering revelation. However, as Albion VC partner Ed Lascelles explains, this disparity doesn’t indicate any kind of conscious or unconscious bias against women. Instead, it points toward a broader issue: women are approaching VCs in smaller numbers than their male counterparts.
This under-representation of women in VC portfolios is not a new story. It’s a well-documented phenomenon, often attributed to the male-dominated nature of the industry, where investors may have a tendency to back founders who look and sound like them. One logical solution to this problem is to introduce more female VCs into the mix. Last month, a report from European Women in VC made an astute observation: teams of female or mixed-sex investors have a much better track record of investing in women. It appears that diversity within the decision-making bodies can indeed lead to a more diverse portfolio of founders.
Lascelles sheds light on this as the accelerator’s organizers gear up to sign the next cohort. When asked whether a female-focused program requires a different approach from a mixed group, Lascelles’ answer is both simple and profound. The core difference lies in the representation within the teaching sessions; there will be many more women involved. This subtle shift in the structure could potentially create a more welcoming and relatable environment for prospective female founders, thereby encouraging more of them to step into the VC spotlight.
Of course, there are moral and societal reasons to strive for greater inclusion of women in the VC community. But let’s not overlook the commercial imperatives. Ignoring the potential of female founders means VCs could be missing out on brilliant ideas that might just become the next big thing. As the startup landscape continues to evolve, women are likely to be at the forefront of new and emerging industry sectors. The European Women in VC report highlighted that venture capitalists are increasingly drawn to companies with a social impact mission—an area where women have often been pioneers.
The Radia Accelerator initiative is one attempt to bridge this gap, but it’s just one piece of a much larger puzzle. It’s certainly not the only female-focused accelerator out there, and the momentum is growing. As more and more initiatives aim to draw women into the VC funnel, the industry stands to gain from the untapped reservoir of female entrepreneurial talent.
By encouraging more women to engage with venture capital, the industry doesn’t just become more equitable; it becomes richer in ideas and innovation. The future of venture capital could very well depend on how successfully it taps into this pool of talent. As they say, you can’t win the lottery if you don’t buy a ticket—or in this case, if you don’t broaden your horizons.