High-Performance Entrepreneurs: Women in High-Tech Whitepaper

11 Oct

Illuminate has this detailed 15-page whitepaper about women in technology. The summary alone is very encouraging.

  • Efficiency, efficiency, efficiency: The high-tech companies women build are more capital-efficient than the norm. The average venture-backed company run by a woman had achieved comparable early-year revenues, using an average of one-third less committed capital.
  • Big Progress in Recent Times: More women are serving as officers of venture-backed companies with successful exits. In 1988, only 4% of the 134 firms that went public in the U.S. had women in top management positions. Of 2009’s 19 high-tech IPOs, all but two had at least one woman officer.
  • Fewer Failures: Despite often being capital-constrained, women-owned businesses are more likely to survive the transition from raw start-up to established company than the average.
  • Expanded IP Contributions: From 1985 to 2005, the annual number of U.S. female-invented fractional software patents increased 45-fold – three times the average growth rate in that sector.
  • Growing Influence in Tech: Women-owned or led firms are the fastest growing sector of new venture creation in the U.S., growing at five times the rate of all new firms between 1997 and 2006 – now representing nearly 50% of all privately held businesses.
  • Venture-level Returns: In the past 10 years more than 125 companies with over 200 women co-founders or officers have achieved IPOs or >$50M M&A exits in the U.S. high-tech sector alone.
  • Diversity Improves Performance: Organizations that are the most inclusive of women in top management achieve 35% higher ROE and 34% better total return to shareholders versus their peers – and research shows gender diversity to be particularly valuable where innovation is key.
  • Financial Bottleneck: $1M+ woman led companies are twice as likely as those led by men to gain debt versus equity capital. In 2008 woman co-founded tech businesses gained less than 10% of venture investment in the high-tech sector while representing 30% of the workforce.
  • Impact of Women Investors: Women now represent just over 15 percent of angel investors, but just 5%-7% of partner-level high-tech venture capital investors in the U.S. Firms with women investment partners are 70 percent more likely to lead an investment in a woman entrepreneur than those with only male partners.

The bottom line: More than ever before, women are influencing the face of business. They are on the cusp of becoming a leading entrepreneurial force in technology.

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