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Innovation Economy

Not enough women in venture capital boardrooms

Maria Cirino, founder of Boston-based .406 Ventures.Wendy Maeda/Globe Staff

Since it sprouted in Boston just after World War II, some things haven’t changed about the venture capital business: the desire for outsized returns, the constant hunt for promising startups, the framed documents celebrating stock offerings and acquisitions, and the long conference tables around which partners gather each Monday to debate which companies deserve money.

Another constant at most Boston firms: the partners sitting around those tables are all male. Next year, one of the oldest active firms, Greylock Partners, will mark its 50th anniversary. It has backed companies like Filene’s Basement, Facebook, and Zipcar. But it has never hired a woman to sit at the table and approve deals.


It’s a problem, and one that venture capital firms here and in California have been unable to solve for decades.

A Fortune magazine analysis earlier this year found that just 4 percent of senior partners at venture capital firms — defined as the people able to give the thumbs-up to a new investment -- are women. Even if you include non-investing partners focused on tasks such as marketing or recruiting, that number rises to just 11 percent, according to the most recent data from the National Venture Capital Association.

For comparison, in other industries structured as partnerships, such as law or accounting firms, women represent between 16 percent and 21 percent of partners at US firms.

Why is it a problem? Venture capitalists manage billions of dollars. They are powerful gatekeepers who determine which fledgling companies get a shot at becoming the next Uber or Care.com. And when I talk to women entrepreneurs — most of whom don’t want to go on the record criticizing firms that either have or might one day supply them with money — there are two common complaints.


The first is that if a woman-founded business targets women as customers, a male venture capitalist will often say, “Let me float the idea past my wife and my assistant.” Does either one have the proper background to analyze the business opportunity? Or the influence to persuade the male partner that it is worthy of investment? It leaves some women feeling like they’re subject to a very different kind of evaluation than, say, male entrepreneurs who come in pitching mobile apps for rounding out golf foursomes.

The other complaint is about not being taken seriously. After presenting her e-commerce site, The Grommet, to a California venture capital firm, Jules Pieri says a partner told her, “You really surprised us. We did not expect much from you or your business before you opened your mouth, but you really know your industry and metrics.” Pieri, a former executive at Stride-Rite and the design firm Continuum, has raised more than $5 million for her Somerville company, which sells useful gadgets and household products.

“When I go to a VC office or event I feel like I’ve stepped back into 1969,” Pieri says. “They are so extremely sheltered from the current business population and creative class that they don’t realize their own isolation.”

Some investors do acknowledge there’s a problem. At North Bridge Venture Partners, Michael Skok says diversity is important, so when entrepreneurs who are women or minorities come to pitch, they see themselves “mirrored in the VCs who greet, mentor, and invest in them.” Founded in 1994, North Bridge does not have any female partners on its venture capital team, though it does have women who help run a separate fund that makes later-stage growth investments.


At Greylock, a spokesperson acknowledged that the firm has never had a female investing partner, but said women have worked there in many other capacities, and Greylock has invested in female-led companies.

There is a challenging chicken-and-egg problem when it comes to bringing more women into the industry. Many venture capitalists ascend to the partner level because they’ve been successful entrepreneurs who have worked with — and produced good returns for — VC firms in the past. And just a small fraction of those entrepreneurs are women, which means fewer female candidates for partners.

As Meredith McPherron puts it, “Are women getting less money and less rocket fuel for their companies because there are too few women VCs, or are there too few women VCs because there aren’t enough women entrepreneurs? I don’t know what causes what, but there is a dearth of women.” McPherron runs the Rock Center for Entrepreneurship at Harvard Business School.

So how to alter a status quo that has persisted for decades?

First, we need to encourage, prod, and inspire more women to study math and science, including computer science. That eventually leads to more women starting and holding key leadership roles at growing companies — and some day having the right experience to be a VC.


Second, regular data from groups like the National Venture Capital Association on whether the industry is making progress promoting women is crucial. So is goal-setting; a reasonable target that Maria Cirino, founder of Boston-based .406 Ventures, has proposed is 20 percent. Venture capitalists constantly set goals for their entrepreneurs and demand regular reports. Let’s do the same for them.

Another possibility is that so-called “limited partners” who give money to VC firms to invest — wealthy individuals, pension funds, and university endowments — press for more diversity in the teams that make the investments. (But limited partners’ primary concern is a solid return, not gender or racial balance. So don’t hold your breath.)

Finally, VC firms need to broaden recruiting strategies to ensure that accomplished women are on a firm’s radar screen. Today, when venture capital firms hire the junior employees who help them identify and evaluate possible investments, they typically tap their existing networks.

Dayna Grayson says she was hired by Waltham-based North Bridge when a professor at Harvard Business School connected her with one of the firm’s founders. She is now a partner at Maryland-based NEA, another venture firm. For VC firm engaged in recruiting entry-level associates, she says, “It really does come down to try harder — or try, period.”

“The case around diversity has been built at every Fortune 1000 company and every university,” Grayson says. “They’ve found that it expands their thinking and expands their progress. We shouldn’t have to build the case for diversity all over again in venture capital.”


Surprisingly, what seems to be moving the needle the most is women who decide to launch their own VC firms, rather than climbing the ladder at companies that don’t have the best records for promoting women to partners. By my count, there are 10 women partners active today at Boston-area VC firms — and seven of them are at firms that they founded or co-founded. In Silicon Valley in recent years, women have started new firms like Cowboy Ventures and Aspect Ventures.

One of the newest female investors in Cambridge, Millie Liu, manages a $10 million fund called Procyon Ventures. After earning a master’s degree in finance from MIT’s Sloan School of Management two years ago, she says she knew she would pursue a job in venture capital. But not by making the rounds to interview at existing venture firms. The 20-something Liu networked with China-based investors who wanted to put money into early-stage data and analytics businesses in the United States.

“If there’s no current job that you can successfully pursue, just go out and create it,” she says. “Which is pretty much what I did.”

Related coverage:

Rudina Seseri: Leaving out women only hurts VC firms

Maria Cirino: Lack of women in VC reflects broader bias

Scott Kirsner can be reached at kirsner@pobox.com. Follow him on Twitter @ScottKirsner and on betaboston.com.