A common knock against venture capital (VC) is that for all its emphasis on innovation, many venture firms are behind the times when it comes to gender diversity. According to data from CBInsights and the New York Times, only eight out of the top 100 VC partners are women.
Broad-based numbers are telling, to be sure, but as with any big undertaking, improving gender equality in VC requires looking beyond headline numbers to understand which roles women are playing and how they’re compensated.
In an effort to help women working in VC manage their careers more effectively, First Republic Bank recently conducted its second annual Women in Venture Compensation Survey. More than 285 women working in VC responded to the survey, which was conducted in 2019.
While the primary goal of the survey is to provide women in VC, across multiple roles, with a compensation benchmark, it also offers insight into their roles and ownership, as well as family leave policies at their firms. To add industry insight to the survey results, we sat down with two VC professionals to get their thoughts, experiences and tips.
Gender diversity, steady progress
When Nancy Pfund began her VC career at the investment bank Hambrecht & Quist in 1990, Amazon referred to a rainforest and the Internet was still a nascent technology. Meanwhile, women were only beginning to make headway in the investment industry, with very few taking on the VC space.
“From 1990 to today, there has been a big shift in the awareness of the need to increase the number of women in VC and the benefits of doing so,” says Nancy, who went on to found San Francisco–based DBL Partners, an early backer of such household names as Pandora, The RealReal and Tesla. “While the statistics still show that women have a long way to go, there has been more attention and more effort to bring women into the field. I certainly notice a much higher level of commitment to this than in the early days, when it wasn’t on anyone’s radar to speak of.”
In the 2019 First Republic survey, average total compensation for associates did not change significantly, but total cash compensation for principals and vice presidents increased 15% on average. Total cash compensation for partners was also higher in 2019 than it was the year prior.
Broaden your network
For women who are in or interested in making inroads in VC, seasoned professionals recommend building a wide network while honing specific expertise.
“My advice to women who want to enter the field is that they build their networks to be as broad as possible. Don’t replicate the way VC has always been done, because its roots are obviously planted in a different place than you are,” Nancy says. “Look for your deals and investors across your network, not just in the typical watering holes where VCs have always gone.”
Meanwhile, she recommends creating a strong support group and staying focused on a long-term trajectory. “This is a long-term business, and so you need to treat it that way,” she says. “Being patient doesn’t mean you need to settle for things that aren’t fair; it just means you need to build your power over time. It won’t happen overnight.”
Patience takes many forms, including an eye to work-life balance.
In addition to looking at compensation, the survey also asked respondents about family leave policies at their firms, which is a priority for a growing number of professionals, male and female. While the typical leave was three months, smaller firms offered an average of four months of family leave.
Nurture your niche
Enmi Kendall, Co-founder and General Partner of Healthy Ventures, is a big proponent of specialization. “We started the firm to invest against where we see the best opportunity in healthcare, namely in an infrastructure software,” she says of her firm’s focus on technology that, among other things, accelerates drug discovery, provides security for the exabytes of healthcare data, and supports payments and credit products for healthcare-related spending.
Indeed, many women are finding that the best avenue for success in VC is to launch their own firms. Based on the survey, women represent 33% median ownership at firms with less than $100 million in assets under management (AUM) and 18% at firms with $100 million to $300 million AUM. At larger firms, that representation shrinks considerably.
Enmi’s advice to other VC professionals: “Make your luck. Control the potential of your arc by aiming to become a General Partner of a fund. I think specialization — be it of a vertical market, horizontal distribution strategies, technical know-how — is key. Your voice at the table will be sought because of it. And then once you’re seated at the table, claim your due share.
Click the download button to access the full First Republic Women in Venture Compensation Survey.