Tech start-ups founded by women have twice the number of female employees, study says
Start-ups with at least one female founder wind up building companies where nearly half the staff are women, a new study finds.
With an average of 48% female workers, women-led firms have nearly twice the industry average and outpace some of the nation’s largest tech companies in gender diversity including Google (31%), Facebook (33%) and Uber (36%), according to the study by online start-up investing platform FundersClub that surveyed 85 U.S.-based tech start-ups.
Alex Mittal, co-founder and chief executive of FundersClub, said start-ups are key to addressing gender diversity in the workplace because the ones that succeed may someday be massive companies. (The majority of start-ups surveyed had fewer than 20 employees).
They “have the potential to become huge — they’re great agents for change,” said Mittal, a coauthor of the study.
The study also examined the effect of female tech founders on leadership and engineering teams. Women made up 38% of executives at firms with at least one female founder — 2.4 times the average at start-ups with no female founders. At women-led firms, females made up 23% of the engineering teams — 2.3 times the average at firms led by men.
The findings come on the heels of a months-long investigation into allegations of sexual harassment and discrimination at Uber, which has elevated awareness of what has long been one of the tech industry’s biggest deficiencies.
Mittal said the timing was simply a coincidence. Women in the industry say the survey’s findings are no surprise.
“Top female talent is more attracted to work on a team where they can see themselves in leadership and know that is respected in the company,” said KJ Erickson, the CEO of Simbi, a service exchange platform.
Natalia Oberti Noguera, founder and CEO of Pipeline Angels, a network of women investors, said the survey failed to address the elephant in the room — race.
“How many of those women founders are white women,” she asked. “It would’ve been even more exciting if this report had included race and gender together.”
Indeed, one 2016 study found that only 0.2% of venture deals from 2012 to 2014 went to start’ups led by black women. Lauren Schulte, founder of Flex Co., agrees gender is just one part of the diversity equation.
She recalls attending a Los Angeles gathering for women founders that attracted more than 200 women, but few of color.
“There were only two black women and maybe four Asian women, the rest of women were predominantly blonde and very attractive,” Schulte said. “This is not representative of the people that are out there.”
Diversity — gender, race, age, among others — is crucial to being competitive in the start-up world, Schulte said. It “can bring a richness to problem solving that you can’t get if you have 10 people who are clones.”