March 15, 2022
This Women’s History Month, we celebrate the countless contributions women have made to society, throughout history and today. The month also serves as a time to pause and reflect on the gender imbalances which continue to plague female entrepreneurs, and the ways in which these challenges can be reduced through direct impact investment.
In the financial services sector, historically one of the most male-dominated fields, progress on female inclusion has occurred, but very slowly. Although women now make up 52% of entry-level financial services professionals, female representation steadily drops off at every step of the corporate ladder with women representing just 30% and 28% of Vice President and Senior Vice President roles, respectively. At the C-Suite level, only 27% of Executives are women.
Not only do women lack representation in the financial services sector, they also receive substantially less private capital than their male counterparts. In 2021, female entrepreneurs received just 2.3% of total venture capital funding in the US.
Gender imbalances in the financial sector are not only harmful from a social equity perspective, they’re also bad for business. A burgeoning body of evidence shows that companies benefit substantially from investing in women — as senior employees, entrepreneurs, and community partners. On average, women in finance make better financial decisions based on risk than their male counterparts, resulting in reduced volatility and more stable returns. Investing in women-owned and women-led businesses yields equally positive results: a recent study found that businesses founded by women deliver higher revenue—more than twice as much per dollar invested—than those founded by men.
At Advantage Capital, some of our most innovative and impactful portfolio companies are led by women—North End Teleservices, which aims to improve lives through meaningful jobs, and Advanced Enviro Systems, one of our fellow Real Leaders Top Impact Company award winners—to name a few. Still more range from Florida-based engineering and controls system supplier Champion Controls, to Gammill, a quilting machine manufacturer in central Missouri, and dozens more.
At Recursion Pharmaceuticals, seven women are in the executive ranks, and close to 40% of the workforce is female—a stark contrast to the data science industry norm of 26% women. Las Vegas’ All-In Recruiting, founded by Lauren Anderson, seeks to bring women and people of color into tech–a historically white and male dominated industry.
Not only do we recognize the dual financial and social impact returns of investing in women-owned businesses, we also recognize the critical importance of gender parity in financial services firms like ours.
Whereas women represent only 23% of total venture capital professionals and just 4.9% of VC partners, at Advantage Capital 36% of full-time employees and 13.6% of our leadership team are female. In an industry that still has substantial work to do on diversity and inclusion, we’re humbled to be moving the needle on female inclusion in finance.
Our female employees, portfolio company leaders, and community partners are some of the most intelligent and enterprising individuals we know, driving real impact at Advantage Capital and beyond. We’re proud to recognize their countless contributions this Women’s History Month.
