The gender gap in venture capital explored

ANN ARBOR-Gender bias in venture capital, particularly in Silicon Valley, has grabbed a number of headlines with stories of challenges that women-led startups face. New research by Sahil Raina, a University of Michigan doctoral student at the Ross School of Business, looked at whether the numbers support those anecdotes and what's driving it. He studied the performance of women-led firms that receive venture capital and found a gender gap in performance. A - Overall, women-led startups that received venture capital had a 37-percent lower rate of exit (IPO or sale) than startups led by men. Could the financial backers be playing a role? "I wanted to find out if venture capital financing played a role in the performance gap," said Raina, a finance student. "If women-led companies perform worse when they are financed by some VCs, then some good projects that should successfully exit VC financing are being held back." Raina analyzed information from CrunchBase, a large crowdsourced database that tracks high-tech startup activity, financing rounds and information on the entrepreneurs. The percentage of women-led firms in the dataset was comparable to that of all venture capital-backed firms.