Only 14 per cent of partners at Canada’s most active venture-capital funds are women, according to a new report that examines the gender imbalance in the country’s investment ecosystem.
The Women in Venture study, published Tuesday by the diversity-in-venture-capital group Female Funders, collected data from public sources on 33 venture-capital firms that were active in 2017 or announced the closing of a fund in the past year; it focused specifically on investment-focused roles, analyzing the titles of more than 300 people.
While the proportion of female partners at Canadian VC firms is twice that of the top 100 firms in the United States, the report says, it highlights the difficulty for women to access leadership positions in venture funds: While 58 per cent of Canadian venture-fund analyst staff are women, that proportion is cut in half for more senior associate and principal roles, and by nearly half again at the partner stage.
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Two-thirds of Canada’s venture-investment dollars, meanwhile, are controlled by teams with no female leaders, the report found. Homogeneous, male-led venture leadership can have cascading effects throughout investment ecosystems: Businesses led by women regularly struggle to access capital, but as organizations such as The Diana Project have reported, VC firms with women as partners are up to twice as likely to fund women-led companies.
“I keep hearing, all across the ecosystem, a really important conversation around championing the next generation of women founders − but there’s not enough conversation around the people who are funding the future innovation of our country,” Lauren Robinson, Female Funders’ executive director and general partner with preseed fund Highline Beta, said in an interview.
Frequently, she said, she had to turn to either U.S.-based or incomplete Canadian statistics about the venture-capital industry when asked about its gender diversity; this report, which was conducted with the private-market data firm Hockeystick, the Canadian Venture Capital and Private Equity Association (CVCA) and the National Angel Capital Organization (NACO), was an attempt to clarify that, and to help Canadian firms make more informed decisions on hiring that could improve investment returns. The report’s findings confirm the widely acknowledged reality of the lack of women in senior roles in the Canadian technology industry, which reflects a similar issue in finance as a whole.
The figures are consistent with the landmark Move the Dial report released last fall, which found a similar level in the low to mid teens of VC partner roles held by women. Its survey of more than 900 Canadian tech firms found women account for just 5 per cent of chief executive roles and 13 per cent of executive team positions, while more than half − 53 per cent − of tech companies have no female executives.
Several Canadian efforts have emerged in recent months to correct the course of inequity in Canadian venture funding. CVCA has launched a Diversity and Inclusion program; Business Development Bank of Canada’s $200-million Women in Technology Fund is expected to announce its first investments imminently; MaRS launched the $5-million StandUp Ventures Fund I, which invests in companies run by women and is led by Michelle McBane; and Toronto serial entrepreneur Elaine Kunda is raising $30-million to launch Disruption Ventures to invest in women-led startups.
The federal government also insisted that firms receiving funds from its $400-million venture-capital-funding program address the gender imbalance issue.
This year, a string of Canadian venture-capital firms with no female investing partners have launched or closed new funds, including Golden Ventures, White Star Capital, Georgian Partners, iNovia Capital, Yaletown Partners and newly formed Luge Capital, backed by some of the top investors in Quebec.
Some of these firms say they are are beginning to address gender imbalance in their leadership. In a recent e-mail, Georgian Partners vice-president Ben Wilde said that “Georgian has a culture of developing and promoting from within,” and that it would not hire someone directly into a partner role.
But it has begun implementing “gender-balanced candidate pipelines” for external hires, he said, shortlisting an equal number of women and men, with more of the former hired since 2014. “We are confident given the balance of our staff that we will see women achieve partner level in the coming years,” Mr. Wilde wrote.
Salil Munjal, Yaletown’s managing director, said in a recent interview that the firm’s principal, Sophie Gupta, was part of the firm’s investment decision-making and suggested she was on track to becoming a partner. (Her father, Shyam Gupta, is a partner.) “There’s lots more work to do, but the good news from the Yaletown perspective is we are certainly beginning to cover the bases on all aspects of diversity,” Mr. Munjal said.
The Women in Venture report found that, at Canadian VC funds, zero per cent of venture partners − partners brought on to manage investments but are not full, permanent members of a partnership − are women. Whitney Rockley, managing partner of McRock Capital and past chair of the CVCA and the current chair of its Diversity and Inclusion program, said she found this result the most surprising. But it’s also, she continued, an opportunity to get more women into the managing-partner and general-partner-track pipelines.
“We can bring in really successful women who’ve been entrepreneurs into the venture funds as venture partners, and start feeding the entrepreneurial ecosystem,” Ms. Rockley said, “and you can probably see some of those venture partners move into core partner roles within the general partnerships.”
The report also collected data on angel investment with assistance from NACO, analyzing self-reported diversity breakdowns of angel-investment groups. It found that angel groups, on average, are made up of only 14 per cent women in Canada, versus 22 per cent in the United States.