That the venture capital industry is dominated by men is hardly new news, and a new VCJ story (gated – so here is a recent article and a historical study) notes that just 5% of partners at the 50 most active venture firms are women. However this theme has been extended with a recent Business Week article title bemoaning the lack of female entrepreneurs, which trod unabashed into the dangerous ground of comparing female and male entrepreneurs. Not a big surprise then to find the author’s subsequent attempt to deflect criticism with a defense worthy of Animal House: an indictment of society.
Far more interesting was a longer WSJ article wondering why — despite the growth of women-owned businesses (which mostly fall outside the venture funding parameters above) are those firms consistently smaller than companies owned by men? This piece looks, much more seriously, at the underlying social factors, including studies showing that women are less inclined towards debt to finance growth, and are more suspicious of banks.
Two months ago I noted a study that posited how overconfidence made men worse investors during an economic downturn (see article). However it stands to reason that the same overblown faith in their abilities may make men more likely to take risks that results in larger companies — but if so, one might expect that there are a disproportionate number of business failures at male-owned companies. Just selectively picking from the headlines, I don’t recall a lot of women leaders at Enron, Lehman, or Pan Am. If anyone knows of some data, send it on.