Women VCs Make Gains in Tech Amid DEI Backlash

(Bloomberg) — Women and nonbinary venture investors have gained a foothold in the technology industry five years faster than advocacy group All Raise expected, but leaders say a national backlash to diversity, equality and inclusion initiatives threatens the progress that has been made.

About 18% of decision makers at US venture capital firms are female — double from 2018 when All Raise was founded and set a goal of reaching that number by 2028, according to the group's annual report published Wednesday.

"While nearly at the goal line, it's not parity," All Raise Chief Executive Officer Paige Hendrix Buckner said in an interview. Although she finds the results encouraging, she is concerned that moves across the nation to roll back diversity efforts could also hit venture capital. "There's a backlash," she said.

Founded by a small group of female investors in the wake of the #MeToo movement, All Raise set out to bring transparency and gender equality to the largely opaque, male-dominated industry, where venture firms at the time had just 9% female decision makers. Diversity benefits investors, who get a share of profits when their startups succeed, and startup founders seeking funding because women investors are more likely to back them, Hendrix Buckner said.

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Amid an industrywide pullback in 2023, female founders fared better than their male counterparts, securing almost 28% of total US deal value, according to PitchBook data, which easily surpassed All Raise's goal of 23% by 2030. Still, the total amount of capital raised by women declined to $34.4 billion in 2023 from $44.2 billion in 2022.

Of the 80 All Raise members who identified as check writers, 75 of them reported having completed one or more deals during the past two years, with 66 serving as lead investor on at least one deal.

Hendrix Buckner, who took the helm of All Raise last year, said her group of full-time employees and volunteers has learned what strategies are most effective. Partnerships with male allies and with Pivotal Ventures, Tiger Global and other venture firms are "critical" to increasing the number of female and nonbinary investors, according to an All Raise survey.

The same questionnaire showed more than 71% of respondents said a male ally had helped them get hired or promoted. Half of the respondents said male allies invited them to speak on panels, sent them deals, co-invested in startups or investing in their funds.

"We have a wide community and we're going to continue to build that," Hendrix Buckner said.

All Raise will increase its effort to build relationships with groups that serve as limited partners in venture funds, a contingent that includes family offices, endowments and others, with the goal of introducing them to female and nonbinary investors seeking investment to start their own funds. 

Despite the progress and clarity around on what's working, "we have more to do," Hendrix Buckner said.