Gender, leadership and venture capital: measuring women’s leadership in VC firm portfolios

The purpose of this paper is to present a new index summarizing women’s leadership in entrepreneurial ventures (WLEV) in the context of venture capital (VC) firm portfolios. Gender representation among VC portfolio firms is a concern for academics, and increasingly for practitioners aiming to reap the benefits of gender diversity.

Drawing on the institutional theory and gender role congruity theory, the authors present dimensions of women’s involvement in leadership roles in VC-funded companies. As previous research has not provided standard definitions, the authors clarify the relevant dimensions. In addition, the authors present an empirical analysis of 153 VC fund portfolios and demonstrate women’s involvement across the three key dimensions forming the WLEV Index: involvement in leadership, management and founding of portfolio companies.

The authors present a summary of WLEV index aligned with previous research. The index has suitable characteristics for future research and introduces a first comparison with existing statistics. The authors’ findings show relatively low scores of women’s leadership in the VC portfolio companies investigated, especially as compared to average USA companies.

This paper introduces standardized definitions for women’s leadership in terms of: women-led, women-founded and women-managed. This paper also introduces a methodology and constructs an index to uniformly compare VC firm portfolio companies according to all three dimensions of women’s leadership. These contributions can be expected to form the basis of future research on gender representation in VC portfolio companies.