Enriching European venture capital with the female viewpoint brings diversity to the startup ecosystem, opens new investment areas and improves the overall quality of startups. How to make European VC industry more diverse was the subject of discussion during European Women in VC Summit in Berlin.
Lack of diversity in startup financing is a fact. Last year in the US only, 2% of VC financing for startups went to companies founded by women – and women comprise just 9% of the decision-makers at U.S. venture capital firms. In Europe, general statistics are similar, but once you start digging into the numbers, the situation is even worse. Actually, the number of women decision makers at VC funds (i.e. those who actually write the equity cheques and have management responsibility) is less than 5%.
Nevertheless, the positive impact of women on companies is supported by prestigious research. McKinsey, in its latest report “Women Matter” shows the existence of a strong correlation between the presence of women at the top management of companies and better financial results. After analysing 300 companies around the world, McKinsey found out a difference in return on equity of 47% between the companies with the most women on their executive committees and those with none, and a 55% spread in operating results.
The European Women in VC initiative comprises a group of over 350 senior VC women professionals from over 20 European countries with total assets under management of around €15bn. The initiative is supported by 19 ambassadors from Europe and Israel who gathered forces to change the status quo in the European and Israeli VC market. Luz Ramírez, CEO of Red Capital Partners, is the ambassador for Spain.
During the summit in Berlin, which took place 8-9th of October, over 100 senior VC professionals both male and female met to discuss the importance of the female viewpoint in the European VC industry. Among the speakers were also representatives of key players in the European venture capital market, such as the European Investment Bank, the European Bank for Reconstruction and Development, the European Investment Fund and the US-headquartered International Finance Corporation.
Luz Ramírez, CEO of Red Capital Partners, was part of the panel of venture capital investors and stated:
“Companies with diverse teams and with women as founders or co-founders are the largest untapped investment opportunity in the market today. This is why our firm, Red Capital Partners, with offices in Madrid and Tel Aviv, is launching a pioneer venture capital fund that will not only invest in high-growth companies founded or co-founded by women, but will also benefit from having a diverse team with experienced female investment professionals holding the most senior positions”.
You can find more reports on the outstanding returns generated by female-led startups and VC firms here: