Wouldn’t it be odd to discover a group of venture capitalists not acting in their best economic interest to maximize return on investment? Well, we believe that is exactly what VCs did between 2013 and 2015 by only investing in women-led companies at a rate of 2.7%. Let’s take it a step further; wouldn’t it be even odder to know there are strong financial correlations with the gender diversity of senior leadership teams, yet no standard way of tracking this in the venture capital world? For those investors who recognize the financial, and even non-financial, benefits of having more gender diverse senior leadership teams, we establish a standard set of metrics to track the gender impact of VC funds so investors can choose the highest quality track records of gender diverse investing.

True Wealth Ventures partnered with Dr. Ruta Aidis, Research Director at Global Women Entrepreneur Leaders Scorecard, CEO and founder of AIG Inc and Senior Fellow at George Mason University, Dr. Sandra Schillo, Assistant Professor, Telfer School of Management, University of Ottawa and the Kauffman Foundation on a breakthrough research project to establish a gender metrics system to evaluate VC firms and VC firms’ portfolio companies. Surprisingly, no such system existed for evaluation, and this pilot study is a first stab at the task of determining uniform metrics and measurements for women’s leadership in VC fund manager’s portfolio companies. Aimed to assist interested investors, policy makers, and VCs interested in adopting a gender-lens strategy, these metrics will create a standardized system to compare the impact of gender diversity within VC firms’ portfolio companies.

We live in a gendered world with institutional gender biases affecting the progress of women leaders. These gendered biases often aren’t recognized or addressed which compounds the problem even further. In order to address underlying biases head-on, it’s important to first present the data uniformly and cohesively, establish metrics to measure the data, and then develop a strategy and propose solutions.

For our research, we leveraged Thomson Reuter’s VentureXpert database, one of the best and largest investment banking databases for information on private equity firms and their portfolio companies. It provides information on well over 1.2 million global portfolio companies with 100,000 of those backed by venture capitalists.

As a first step, it was important to clearly establish the measurements of women’s leadership that were representative of a VC fund manager’s portfolio and could be tracked. The four chosen metrics for the portfolio companies are: woman as the top executive (CEO), women-led as women present in the executive team, women-founded and women-managed. Once we established the track-able metrics of women’s leadership, we could evaluate the VC firms in terms of these distinct classifications.

There were four objectives of the first phase of this project. First, we established an inventory of both traditional and women-oriented investment funds to measure. Next, we compiled existing measurements for women’s entrepreneurship and leadership and developed a standardized scoring methodology. Third, we identified gaps in the existing data and explored strategies for improving data accuracy.  Lastly, we aimed to present the data in a cohesive and clear fashion making it easily accessible to investors, policy makers or researchers interested in adopting a gender lens strategy.

A paper based on our initial research was presented in June at the Diana International Research Conference in Bodo, Norway, and in September at the Schar School of Policy and Government at George Mason University, and is currently under review by the International Journal of Gender and Entrepreneurship. We will be presenting on our study at the International Council for Small Business (ICSB) conference in DC on October 17-18th, 2016. The primary objective of this pilot was to establish the viability of collecting comparative data for women’s leadership in VC funded company portfolios. Phase 1 was a success! The next phase of the study is already underway which includes applying alternative methodologies to fill existing data gaps, further establish a standard metrics system of tracking women’s leadership in fund portfolios and lastly apply the standardized metric system to VC firms to start understanding and providing visibility into their associated gender performance.

Data-driven metrics are particularly important to overcome unconscious gender biases as we know from many studies that show, for instance, investors find male voices to be more “persuasive, logical and fact-based” despite the fact that female voices read the exact same content. Introducing transparent and uniform assessments will provide a reliable tracking mechanism for identifying funds incorporating the benefits of investing in more women on the leadership teams through their actions and not solely by their intentions. And, furthermore, increased transparency will ultimately lead investors to act in their best economic interest by increasing their investments in women leadership.


Brush, C., Greene, P., Balachandra, L. and A. Davis “Bridging the Gender Gap in Venture Capital, Babson CollegeDiana Report.

Krause, Alex. ”Women’s Entrepreneurship Research – What We’re Funding”, Kauffman Foundation

Brooks, A., Huang, L., Kearney, S. and F. Murray (2014) “Investors Prefer Entrepreneurial Ventures Pitched By Attractive Men” Proceedings of the National Academy of the Sciences 111(12): 4427-4431.