inclusion
Women hold only 9 percent of equity value in their startups, report finds
While women comprise approximately 33 percent of the combined founder and employee workforce at startup companies, they hold just 9 percent of all equity value in those companies, according to The Gap Table from Carta – a software platform for managing startup equity and ownership. The new report was based upon capitalization table (cap table) data from more than 6,000 companies with a combined total of nearly $45 billion in equity value.
While women comprise approximately 33 percent of the combined founder and employee workforce at startup companies, they hold just 9 percent of all equity value in those companies, according to The Gap Table from Carta – a software platform for managing startup equity and ownership. The new report was based upon capitalization table (cap table) data from more than 6,000 companies with a combined total of nearly $45 billion in equity value. The cap table is a list of owners of a company and includes information about the percentages of ownership, equity dilution, and value of equity in each round of investment. The researchers found that:
- Women make up 35 percent of equity-holding employees, but only hold 20 percent of employee equity; and,
- Women make up 13 percent of founders, but hold 6 percent of founder equity.
Cities can compete for $500M in funds to drive inclusive growth
JPMorgan Chase announced the creation of AdvancingCities, a new $500 million, five-year initiative to drive inclusive growth and create greater economic opportunity in cities across the world. The firm will invest in cities where conditions exist to help those who have not benefited from economic growth. This includes demonstrated collaboration across the public and private sectors on solutions that create opportunity for people at risk of being left out of economic growth. Successful applications will be eligible for a three-year grant of up to $3 million.
Financial hurdles for minority small businesses appear on both sides of the banker’s desk
In a previous Digest, SSTI discussed the positive impact that community banks have had on small business lending activity and economic growth in communities across the country since the Great Recession. In this article, SSTI shares two studies on the existing roadblocks and pessimism faced by minority small business and entrepreneurs as they seek financing through banks.
A deeper dive into company valuations: the case of female-founders
Valuations of venture backed companies and the number of unicorns are rising based on the leading nationwide surveys, but closer examination of the data reveals not all startups are seeing the effect. The median valuation for female-founded companies, for example, was lower in 2017 (approximately $11 million) than it was in 2007 (approximately $15 million), according to research from PitchBook’s Dana Olson.
Valuations of venture backed companies and the number of unicorns are rising based on the leading nationwide surveys, but closer examination of the data reveals not all startups are seeing the effect. The median valuation for female-founded companies, for example, was lower in 2017 (approximately $11 million) than it was in 2007 (approximately $15 million), according to research from PitchBook’s Dana Olson. In comparison, the median valuation for male-founded startups has increased by approximately $8 million between 2007 (approximately $21 million) and 2017 (approximately $29 million). Olson also found that, across all industries, a much higher percentage of VC-backed, male-founded companies (35 percent) received at least one round of follow-on funding than female-founded companies (2 percent). With regard to exits, male-founded startups are acquired more than 11 percent of the time, while less than 0.5 percent of female-founded startups ever reach the same milestone. Male-founded companies also have a higher rate of IPO (nearly 1.7 percent) than female-founded startups (less than 1 percent).
Recent Research: Strategies for connecting communities to the innovation economy
The final part of this series explores the tactics and strategies associated with increasing exposure to innovation and broadening economic opportunity.
The final part of this series explores the tactics and strategies associated with increasing exposure to innovation and broadening economic opportunity.
Last week, The Digest explored recent research examining the role that exposure to innovation plays in determining future inventiveness. The study’s authors, led by Stanford’s Raj Chetty, find that a child’s characteristics at birth – their neighborhood, socioeconomic class, race, and gender – are highly predictive of their propensity to file a patent later on in life. Based on their results, the authors recommend strategies that focus on increasing exposure to innovation and broadening intergenerational economic mobility. This article explores these types of policies in depth, as well as additional tactics that may help reconnect America’s communities with greater economic opportunity.
Recent Research: Broadening economic opportunity to support American innovation
This article is part one of a two part series focused on the intersection between economic opportunity and the economic development practice.
This article is part one of a two part series focused on the intersection between economic opportunity and the economic development practice.
A lack of economic opportunity could threaten American innovation, according to new research from Stanford economist Raj Chetty and other members of the Equality of Opportunity Project. The authors advocate that in light of empirical research showing the worsening effects of economic segregation and inequality, the economic development community needs to support new strategies and tactics that can deliver “realistic economic opportunity” to more communities across the country. If the future of American inventiveness depends on place-based economic opportunity and exposure to innovation as the study suggests, troubling times may lie ahead.
NSF finds gender inclusion benefit within programs
In a report of FY 2011-2016 data, the National Science Foundation finds that rate of female participants in its currently-funded Engineering Research Centers (ERCs) may be higher than for overall engineering programs. Specifically, participation among female faculty is better by about seven percent, by about 15 percent among female undergraduates, and a more modest 1-2 percent increase among doctorate students.
Second set of NSF INCLUDES awards focuses on increasing STEM diversity
The National Science Foundation (NSF) has announced the recipients of 27 Design and Development Launch Pilots as part of its INCLUDES initiative. The initiative is aimed at enhancing U.S. leadership in science, technology, engineering and mathematics (STEM) discoveries and innovations through a commitment to diversity and inclusion. The 27 pilots feature public-private partnerships that will develop blueprints for broadening STEM participation and are funded through two-year, $300,000 grants.
BX Challenge supports diverse entrepreneurs in Chicago area
The Blackstone Charitable Foundation has announced its first cohort of eight organizations in the Chicago-area entrepreneurship challenge. Named the BX Challenge, up to $3 million in grant funding will be provided over three years to innovative organizations that effectively recruit and support diverse entrepreneurs and scale startups in the Chicago area. The selected programs will serve underserved populations, including communities of color, women, veterans, and immigrants.
Unfairness, mistreatment largest contributors to employee turnover in tech industry
Unfair treatment is the largest driver of employee turnover in the tech industry, according to a new report by authors at the Kapor Center for Social Impact with support from the Ford Foundation. In the 2017 Tech Leavers Study, the authors surveyed a national sample of 2,000 adults who in the past three years have voluntarily left a job in a technology-related industry. They find that unfairness or mistreatment in the work environment was the most frequently cited reason for leaving (37 percent), especially for professionals from underrepresented populations (e.g., women, black, Latinx, and Native American).