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Study shows firms more open to diverse workforce

- Rachel Sandler @rachsandl

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Technology start-ups with at least one female founder have more women employees than major technology companies and twice as many women employees as start-ups with no female founders, according to a study by online venture capital firm FundersClu­b.

Start-ups with at least one female founder, on average, employ 48% women, according to FundersClu­b’s findings. That’s more than twice the number of women at start-ups with no female founders. It’s also more than Google, which has 31% women, Facebook, which has 33%, and Apple, which has 32%.

The survey also found that executive leadership and engineerin­g teams at female-founded start-ups are comprised of more than twice the number of women than at start-ups with no female founders. In addition, companies with female founders have, on average, one female founder and one male founder.

The results underscore research that shows women in leadership positions are crucial for the advancemen­t of other women. It’s also a signal that more women are pursuing entreprene­urial paths and that young companies may becoming more open to recruiting diverse workforces in an industry widely criticized for being a boys club and for having a widening gender gap.

“We didn’t go into this survey with any expectatio­ns, but the magnitude was surprising for us,” Alex Mittal, CEO and co-founder of FundersClu­b, an online venture capital firm, told USA TODAY.

Of the 234 start-ups in FundersClu­b’s portfolio, 85 responded to an anonymous survey.

Though the survey shows progress, the status quo remains. In 2017, 17% of start-ups had a female founder, according to a recent CrunchBase study. That number has been flat for five years, even though women make up nearly half of the U.S. workforce and are majority owners of 36% of U.S. small businesses.

Still, diversity experts say they are seeing some start-ups taking steps to recruit more women and people of color.

“If you don’t create diversity at the beginning of a company, it’s never going to change,” said Ann Crady Weiss, a partner at True Ventures and co-founder of Hatch Baby, a maker of products for infants such as a baby changing pad with a wireless scale and a nightlight and sound machine that can be controlled with a smartphone.

“These are the future Face- books, the future Ubers, and it’s important for them to have women from the beginning.”

Chiara McPhee and Jen Kessler’s start-up Bizzy was the first to graduate from incubator Y Combinator with two female founders. They didn’t set out to hire women, but women gravitated to them, they said.

On average, half the staff at the email marketing firm, which was recently acquired by Sendgrid, were women.

“When we spoke to female applicants they were definitely really excited about the idea of having two female founders,” Kessler said. “And it always came up in the first call.”

Ellen Pao, an investment partner at Kapor Capital and the chief diversity and inclusion officer at the Kapor Center for Social Impact who unsuccessf­ully sued her former venture capital firm for gender discrimina­tion, says her own experience bears this out.

“As an executive and then CEO of Reddit, I saw that I could hire women and people of color who were more qualified and more excited about their roles,” Pao said in a statement to USA TODAY. “I have no doubt it was in part because I am a woman of color.”

“If you don’t create diversity at the beginning of a company, it’s never going to change.” Ann Crady Weiss, a partner at True Ventures and co-founder of Hatch Baby

 ?? JUSTIN SULLIVAN, GETTY IMAGES ?? In Silicon Valley, decades of hiring from the same old networks and the same old places has produced an industry that is dominated by white and Asian men.
JUSTIN SULLIVAN, GETTY IMAGES In Silicon Valley, decades of hiring from the same old networks and the same old places has produced an industry that is dominated by white and Asian men.
 ?? JUSTIN SULLIVAN, GETTY IMAGES ?? “As an executive and then CEO of Reddit, I saw I could hire women and people of color who were more qualified and more excited about their roles,” Ellen Pao said.
JUSTIN SULLIVAN, GETTY IMAGES “As an executive and then CEO of Reddit, I saw I could hire women and people of color who were more qualified and more excited about their roles,” Ellen Pao said.

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