A jury failed to agree with Ellen Pao’s sex-bias claims against her former employer.
A jury failed to agree with Ellen Pao’s sex-bias claims against her former employer.REUTERS

A brief message to the venture capital community: Take advantage of this moment.

I’m talking about the immediate aftermath of the verdict in the closely followed sex-discrimination case against the famed venture firm Kleiner Perkins Caufield & Byers.

Ellen Pao, a former executive at the firm, failed to convince a San Francisco jury of any of her allegations on Friday.

As a legal contest, it was a slam-dunk for Kleiner Perkins.

The case attracted a lot of attention for reasons beyond the fact that the bluest of blue-chip venture firms was on the hot seat.

It struck a powerful chord because the venture capital business — regardless of the outcome of this particular lawsuit — has a big problem with women.


Look around venture firms and you won’t find many women working there, certainly not in partnership or other leadership roles.

Look further at the young companies those venture investors are backing, and you won’t find very many female leaders there, either.

Lots of people have examined those facts and see a blatant social wrong. Here’s another way to look at them: as a business opportunity. Seriously.

Doing something to alter venture’s yawning gender gap would almost certainly open up new portfolio choices for the investment firms.

It could help build better venture capital portfolios. It could put money in the hands of worthy startups that might not get funded otherwise.

In short, it could be good for business.

How do you do that? The first step the venture capital industry needs to take is to acknowledge its very male-oriented culture and the fact that it’s a problem.

Warning: This is a bigger challenge than you might think. But now would be a good time to start.

Thoughtful industry people could point to the Kleiner Perkins victory in court and still acknowledge the real reasons so many people paid attention to the case.


The basic statistics behind that interest are hard to explain away. Some of the best recent information available comes from Babson University, which began watching venture capital firms and their investing habits through a gender lens in 1999. For anyone who thinks women in venture is one of those social issues that has to be changing with the times, however slowly, think again.

In 1999, women held 10 percent of the partner positions at venture firms; by 2013, just 6 percent of venture partners were female.

“Women are not making much progress in terms of moving into the partnership ranks in the venture capital industry,” said Candida Brush, a coauthor of the study who chairs Babson’s entrepreneurship program.

One admittedly imperfect comparison: In the legal profession, which also is often criticized on gender grounds, women account for 17 percent of equity partners in the nation’s 200 largest law firms.

Venture capital firms tend to invest in companies with the kind of gender profile you probably expect. About 15 percent of companies that received venture funding between 2011 and 2013 had a woman on their executive teams, according to the Babson research.

Fewer than 3 percent of those companies were run by a female chief executive.

Brush said there was clear evidence that venture firms with female partners invested more often in companies with a woman on their management teams.

About 58 percent of venture firms with women partners invested in companies with a female chief executive, compared with just 15 percent of firms without women partners, she said.


Brush said the numbers suggest that venture firms with women involved in investment decision-making are more open to backing a broader range of businesses. She said companies with women in top management have performed at least as well in investments, compared with venture-backed businesses run by men.

“Why wouldn’t you want to have a bigger pool of people to choose from if you’re trying to invest in the best deals?” she said.

Why, indeed? The leaders of the venture capital industry — in our backyard and across the country — should take advantage of this moment in time to start dealing with a very old problem.

It could even be good for business.


Failed bias suit is fodder for Boston Women’s Venture Summit

Jurors reject bias claims in Kleiner Perkins case

Figure in bias suit married to fund manager who defrauded T pension fund

Charges of sexism roil venture capital world

Venture capitalist says he tried to prevent woman’s firing

Suit portrays a Silicon Valley hostile to women

Steven Syre is a Globe columnist. He can be reached at syre@globe.com.