Women-led U.S. startups attract Only fraction of venture Cash

Promising startups in america get when directed by women, a shred of the billions of dollars shareholders pump to them, a study discovered on Tuesday.

Between 2011 and 2013, companies with a female CEO received $1.5 billion of the $51 billion venture capital investors poured to those that they deemed promising, or a mere 3 percent of available dollars, according to the analysis by U.S. researchers.

They discovered that teams that were all-men were likely to win venture capital than teams.

Venture capital is money invested in small businesses thought to possess potential.

The findings published in the journal Venture Capital confirmed a pattern of levels of venture capital flowing into businesses.

The Diana Project, A landmark study, had discovered that venture capital injected in businesses never exceeded 4 percent of funds spent between the turn of this century and the 1950s.

In the new study, researchers analyzed nearly 7,000 U.S. companies that received venture funding between 2011 and 2013. Then they identified companies with women.

Just why businesses were receiver of venture capital that was less raised questions regarding the inner workings of the industry, stated co-author a professor of entrepreneurship at Babson College in Massachusetts, Candida Brush.

“What’s the disconnect?” Said Brush in a telephone interview.

“My hypothesis about the disconnect is that girls aren’t in the perfect network (or) they are either being placed through a tighter display,” she informed the Thomson Reuters Foundation.

The report’s authors, who include an consultant and Babson College professors, found there was no performance gap between companies whose CEOs were men or women.

The proportion of male to startup entrepreneurs is equivalent, based on the Global Report of the 2013 Global Entrepreneurship Monitor.

However, the venture capital business in the United States is 92 percent man, said Brush.

“Those are things that must be looked at,” she said.

Prominent Silicon Valley investor Dave McClure resigned from his position 500 Startups after allegations of sexual harassment earlier this month.

McClure’s resignation came after entrepreneur Sarah Kunst accused misconduct’s investor .

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