Choose To Challenge

One challenge is whether the world will reach net zero carbon emissions faster than gender parity will be reached in the venture capital industry?

Currently, the money would be on the former.

Women represent 16% of investment partners at US VC firms compared to 14% in 2018, according to the third edition of the VC Human Capital Survey, published by the National Venture Capital Association (NVCA), Venture Forward and Deloitte last week.

This self-selected survey from 378 VC firms, representing an aggregate total of $256.4bn in assets under management, on their talent management practices and on the demographics of nearly 5,000 employees was more positive about junior-level female investment professionals, where representation increased to 33% (up from 28% in 2018).

But even taking this data set – only about 12% of decision makers at VC firms are women, and most firms still don’t have a single female partner, according to Crunchbase’s broader study of VC firms, it will take time to fill effectively dead men’s shoes.

At two percentage points every few years it could take past 2050 to reach parity at these rates.

And even with more female investors, the money is struggling to reach a diverse set of entrepreneurs. In 2019, an all-time high of 2.8% of funding went to women-led startups; in 2020, that fell to 2.3%, according to Firework Ventures in the Harvard Business Review using Crunchbase data.

By contrast, there seems more activity on carbon parity to balance emissions and removals.

The UK has passed a law to bring all greenhouse gas emissions to net zero by 2050, while the US has rejoined the Paris Accord, a legally binding international treaty on climate change adopted by 196 Parties at COP 21 in December 2015.

The next meeting, COP26, will be in November in the UK and is expected to see tougher targets set.

At the risk of blurring correlation and causation, however, but what would happen if the two issues were conflated? Maybe more environmental and socially-focused startups would be funded?

After all, a non-scientific glance at the 480 impact-focused VC funds tracked by Giant Leap fund indicates greater parity between genders among the investors and portfolio companies.