Date of Award
Spring 2017
Degree Name
Bachelor of Science (BS)
Advisor(s)
Udayan Gupta
Abstract
This paper critically investigates the venture capital industry and its investments in female entrepreneurs. There is a distinct funding gap between male and female founders in the venture capital industry. Women account for an equal proportion of the entrepreneur population in the United States, but they receive a very small portion of all venture capital funding. This disparity may inhibit growth for women’s businesses since venture capital often provides a needed capital infusion for growth. Importantly, evidence suggests that women’s businesses can be a source of equal if not superior returns for venture capital. Further, growing societal awareness of the importance of gender equality will inevitably affect venture capital as institutional investors are pressured by their constituents to place their money in ethical investment vehicles, including those that strive for gender equality. The combination of potential returns and impending pressures from institutional investors suggests that the next opportunity in venture capital is female entrepreneurs. This paper suggests that investments in female entrepreneurs will be the next trend in the venture capital industry. The investigative approach involves gathering data on investments in female entrepreneur’s businesses and on the VC firms making those investments. By analyzing the multiple variables that might influence venture capital funding decisions and gender bias, this paper supports the theory that the key factor positively influencing investments in female founders is the presence of female VC partners. Being that VC firms are the ones responsible for choosing worthwhile investments, the partners they employ are extremely important. They are the ones able to create an investment portfolio cognizant of the value of diversity. Ultimately this serves as a recommendation to the venture capital industry to increase its own diversity.
Recommended Citation
Koehler, Lucy, "Venture Capital and Female Entrepreneurs: Investigating the Funding Gap" (2017). Gabelli School of Business Honors Thesis Collection. 124.
https://research.library.fordham.edu/gabelli_thesis/124
