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Successful start-ups have more female execs – US study

US venture-backed companies that have held successful exits employed more female senior executives than unsuccessful companies, according to a new research study from Dow Jones VentureSource.

The study finds that the median proportion of female executives in successful companies is 7.1pc, more than double the 3.1pc median in unsuccessful companies.

The ‘Women at the Wheel: Do Female Executives Drive Start-Up Success?’ study examines the role of female executives in venture-backed companies headquartered in the US and their impact on a company’s success.

Influencing success

It indicates that female executives may influence success in certain industries. The median number of female executives at successful companies in the IT, business and financial services, consumer services and healthcare industries was significantly higher than the median at unsuccessful companies in those industries. No relationship existed between female executives and success in the consumer goods, energy and utilities, and industrial goods and materials industries.

It also finds that companies that hold an IPO are more likely to have at least one female executive. Seventy-five percent or more of companies that went public since 2003 had at least one female executive. During the same time, between 60pc and 70pc of companies that exited via a merger or acquisition had at least one female executive.

Companies in the start-up and product development stages are the least likely to have a female executive, according to the study. Companies that are generating revenue or profitable, however, are more likely than not to have at least one woman in the executive suite.

Rare among today’s private companies

Female founders, CEOs and executives are still rare among today’s private companies. Women founded 1.3pc of privately-held venture companies, 6.5pc have had a female CEO, and 20pc have had one or more female C-level executive.

Female executives are most likely to hold a position within sales and marketing (27pc), followed by finance (17pc), product (11pc), and technology (11pc).

“This study shows that, in some cases, hiring female executives into management roles can improve a company’s odds for success,” said Maryam Haque, senior research analyst at Dow Jones VentureSource. “In the venture capital industry where companies are as likely to succeed as they are to fail this information shows that gender diversity in the executive suite can give a company an edge.”

Dow Jones VentureSource

The study was produced by Dow Jones VentureSource, which analysed 20,194 US-based companies that received venture capital financing or were exited between 1997 and 2011 and all senior executives at those companies including founders, board members, C-level executives, vice presidents and directors. Fifty-five percent of the companies analysed had at least one female executive and the proportion of female to male executives at these companies was two to nine.

In the study, a successful company is defined as one that exited through an initial public offering, is in IPO registration, is privately-held and consistently profitable, or has been acquired for an amount greater than the total venture investment. An unsuccessful company is one that is still private and independent but has not yet become successful as defined or has ceased operations, gone bankrupt or exited at a valuation below its total venture capital funding.

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One Response to Successful start-ups have more female execs – US study

  1. Fin October 23, 2012 at 11:33 am #

    Great article..over the coming days we’ll have more articles showing growing influence of women led businesses in US and UK….we’ll also start discussing the the role of women led businesses on this island…

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