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Gender Gaps in Venture Capital Performance

Published online by Cambridge University Press:  05 January 2021

Paul A. Gompers Open the ORCID record for Paul A. Gompers [Opens in a new window] ,
Vladimir Mukharlyamov ,
Emily Weisburst  and
Yuhai Xuan
Paul A. Gompers*
Affiliation:
Harvard Business School and National Bureau of Economic Research
Vladimir Mukharlyamov
Affiliation:
Georgetown University McDonough School of Businessvladimir.mukharlyamov@georgetown.edu
Emily Weisburst
Affiliation:
University of California–Los Angelesweisburst@ucla.edu
Yuhai Xuan
Affiliation:
University of California–Irvineyuhai.xuan@uci.edu
*
paul@hbs.edu (corresponding author)
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Abstract

We explore gender differences in performance in a comprehensive sample of venture capital investments in the United States. Investments by female venture capital investors have significantly lower success rates than investments by their male colleagues when controlling for personal characteristics, including employment and educational history, and portfolio companies’ characteristics. The gender differences in investment outcomes are not due to female investors being less skilled but, rather, are largely attributable to female investors receiving less benefit from the track records of their colleagues. Performance differences disappear in older, larger firms and firms with other female investors. This supports the view that formal feedback mechanisms and hierarchies are potentially useful in ameliorating the female performance gap.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 57 , Issue 2 , March 2022 , pp. 485 - 513
Copyright
© The Author(s), 2021. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington

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Footnotes

We thank an anonymous referee, Robin Ely, Boris Groysberg, Jarrad Harford (the editor), and seminar participants at Harvard Business School for helpful comments and suggestions. Daniel Kim and Natee Amornsiripanitch provided excellent research assistance. This article was previously circulated under the title “Gender Effects in Venture Capital.” This research was supported by the Division of Research at Harvard Business School. Gompers has invested in and consulted for venture capital firms.

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