Women in Venture Capital: Overcoming Barriers and Advancing Representation in Canada and the United States
5 min read · Jan 2025
Diversity Institute (2023)
Women comprise just 15.2% of partners at Canadian VC firms, 11.8% of managing partners, and just 10.3% of venture partners. While this represents an increase of 1% from 2018, it is still a stark deviation from the goal of gender parity.
Summary
This report examines the representation of women in the venture capital (VC) ecosystem in Canada and the United States, highlighting systemic barriers and proposing actionable solutions. Despite its importance to economic growth, the VC industry remains predominantly male, with women underrepresented at all career levels. The report synthesizes existing literature and original qualitative research to provide a nuanced understanding of the challenges women face and identifies practical steps to cultivate a more inclusive and equitable VC ecosystem.
Method
This study employed a mixed-methods qualitative approach, combining a thorough literature review with semi-structured interviews to explore women’s representation in the venture capital (VC) industry in Canada and the United States. The literature review examined existing research on gender diversity in the VC ecosystem, focusing on barriers, drivers, and best practices for inclusion. Additionally, semi-structured interviews were conducted with 15 senior leaders and women staff from Canadian and U.S. VC firms to gain insights into their lived experiences with diversity and inclusion.
Key Findings
Women remain significantly underrepresented in the venture capital ecosystem across Canada and the United States.
As of 2021, women represent 15.4% of all general partners at VC firms in the U.S., reflecting progress from previous years when the figure was 12%.
In Canada, women account for 15.2% of partners, 11.8% of managing partners and 10.3% of venture partners at VC firms.
When considering intersectionality, the representation of women becomes even more limited, particularly for underrepresented racial and ethnic groups and nonbinary individuals.
According to a 2020 report, of the 4.9% of female partners in the U.S. VC firms, only a small fraction represented underrepresented racial and ethnic groups, with just 16% being East Asian, 7.7% South Asian, 4.8% Black, and 3.5% Latinx.
There is a gap in research and data on intersectionality in the Canadian VC industry.
Barriers at micro, meso and macro levels affect women’s representation in the VC industry.
At the micro-level, education requirements, the need for effective leadership, lack of networking and learning opportunities, and the skills gap were identified as significant barriers to women’s representation in the VC industry.
At the meso-level, issues such as inadequate equity, diversity, and inclusion (EDI) practices, unwelcoming organizational structures and cultures, and human resources challenges were highlighted as obstacles.
At the macro-level, societal challenges, including the low representation of women in the VC industry and a culture that often marginalizes their contributions, were recognized as overarching barriers.
Several key drivers were identified as effective ways to increase women's representation and success in the VC industry.
According to the interviews, the most significant driver was the monitoring and tracking of team diversity, with 28.8% of respondents highlighting it as essential for fostering inclusive environments.
Management commitment and support (13.7%) as well as cultivating an inclusive organizational culture (12.3%) were also seen as crucial for ensuring women’s success.
Takeaways
This study highlights that while there has been some progress in increasing women’s representation in the VC industry, significant barriers remain at the micro, meso and macro levels. The issue of intersectionality, in particular, needs attention, as women who are gender-diverse or women of colour face even greater challenges in accessing and advancing within the VC industry. To better understand these obstacles, it is critical to explore the lived experiences of these individuals, gather more comprehensive data, and gain deeper insights into the unique barriers they encounter.
We also need to better understand the role of VC networks and firms in either promoting or inhibiting career success for women. More robust, data-driven research is necessary to assess the effectiveness of diversity tracking metrics, the presence of diversity targets, and the policies and practices aimed at increasing women’s representation in Canada.
References
Diversity Institute. 2023. “Women and the Venture Capital Industry in Canada and the United States.” https://www.torontomu.ca/content/dam/diversity/reports/Women_in_Venture_Capital.pdf.
About WIN-VC Canada:
New Power Labs is the research lead of the Women and Nonbinary (W) Impact (I) Network (N) for Venture Capital (VC), a national collaborative of organizations working to provide services, programming, events, and dedicated resources to women and non-binary entrepreneurs and gender lens investors across Canada who are working towards becoming investment ready and increasing the pool of investors driven to invest in these ventures.
This research is part of WIN-VC Canada, supported by the Government of Canada. WIN-VC acknowledges the support of Innovation, Science and Economic Development (ISED). ISED has awarded funding for WIN-VC that will make the venture capital environment more inclusive for women by transforming traditional investment processes, processes and knowledge into respectful and meaningful approaches that value equity and impact with a focus on diverse women and non-binary entrepreneurs and SMEs including Black communities, Indigenous peoples, racialized populations, persons with a disability, 2SLGBTQ2+ and new Canadians.
