Why Venture Capital's Male Dominance Endures

For more than fifteen years, a stubborn number has hovered around the world of venture capital, refusing to budge. Two percent. That’s the share of investment dollars that finds its way to startups founded solely by women. A number so small and so persistent it feels less like a statistic and more like a permanent fixture, something settled in the corner of the room that everyone has tacitly agreed not to notice.

In 2023, that number even dipped, a small, quiet sigh of a decline. It makes you wonder about the very shape of the industry, the cut of its cloth. Venture capital, after all, was tailored by men for men. Whether you start the clock in 1946 with the buttoned-up American Research and Development Corporation or in 1961 with the California sun of Davis & Rock, the story is the same.

Men in suits. Another man with an idea. A handshake. This was decades before a woman could even get a business loan or a credit card in her own name. The original pattern was set before she was even allowed to bring her own thread.

This isn’t a story of overt malice, not usually. It’s a story of comfort. Of familiarity.

Pattern matching is just a business term for a deeply human habit: we look for what we already know. A founder who reminds a partner of his younger self. A resume with the same university name. A certain way of speaking, a particular kind of confidence. It’s a sense of recognition, a quiet click. A comfortable fit. But comfort can be a cage.

It explains how, in a recent Y Combinator batch, over 27,000 applications were winnowed down to just 260 companies. An acceptance rate of less than one percent. A filter so fine it catches almost everything. And in that tiny, chosen group, only a fifth of the companies had a woman on the founding team. You have to wonder what gets filtered out.

A better breast pump, one designed by an actual engineer who had used one. A software for managing the chaotic schedules of caregivers for aging parents. An algorithm to predict crop blight in sub-Saharan Africa, built by a woman who grew up there. Ideas born from lives that don’t match the existing pattern.

Change, when it comes, isn’t a single, dramatic event.

It’s the slow, steady work of countless people pulling at the threads. It’s organizations dedicated to ushering more women into the venture capital firms themselves, placing them at the table where the decisions are made. It’s mentorship programs that feel less like formal meetings and more like a series of coffees, passing along the unwritten rules of the game.

A systemic problem requires disruptions at multiple points. A snag here, a new weave there. The whole garment begins to shift.

What if the answer is as simple and as revolutionary as looking in new places? What if a woman sourcing deals sees something others miss? She might recognize the quiet, determined grit of a founder who doesn’t perform bravado.

She might understand the market for a product because she, her sister, and her mother have been waiting for it their whole lives. It isn’t about fulfilling a quota; it’s about expanding the field of vision. It’s about recognizing that genius doesn’t wear a uniform. It’s about finally realizing that the old, familiar pattern, comfortable as it may be, is starting to look a little worn.

A little too tight in the shoulders. Perhaps it is time for a new outfit, entirely.

• A Stubborn Statistic For over 15 years, startups founded only by women have received just 2% of all venture capital funding, a figure that has remained largely stagnant and even recently declined.
• An Industry’s Origin The venture capital industry was established by men who primarily funded other men for decades, creating a foundational pattern of investment long before women had equal access to financial instruments.
• The Comfort of the Familiar Pattern matching in VC often translates to funding founders who fit a pre-existing mold—in background, education, and presentation—inadvertently filtering out brilliant ideas from those who don't fit the familiar profile.
• The Funnel Effect Elite accelerators like Y Combinator have acceptance rates below 1%, with their Winter 2024 batch comprising only 21% companies with a female founder, highlighting how the selection process narrows diversity.
• A Multi-Point Solution Undoing this ingrained bias requires a systemic approach, including increasing the number of women in VC, supporting emerging female fund managers, and creating robust mentorship networks for women entrepreneurs.