Study Unsurprisingly Finds Female-Founded Tech Startups Employ More Women

Study Unsurprisingly Finds Female-Founded Tech Startups Employ More Women


Amidst a slew of recent reports on gender inequality in the workplace, and particularly the underrepresentation of women in tech, one study has found that it evidently takes a company started by a woman to level the playing field. According to a study conducted by FundersClub, startups with at least one female founder were found to be much more gender-diverse in general: nearly half of their staff force are women, too.

These women-led firms have a 48% female workforce, on average. That means they’re essentially leading the way in terms of gender diversity and equality. In contrast, only 31% of Google’s workforce is female, while 33% of Facebook’s is. Although Uber reports that 36% of its staff are women, considering the months-long investigation into claims of sexual harassment and discrimination at the company, the ride-hailing service likely has a long way to go.

Unfortunately, these types of reports are quite common, as is evidenced by numerous profiles, including one from last month published by the New York Times. More than two dozen women spoke to the outlet about sexual harassment they’d experienced in the tech startup industry. For a long time, the behavior was often covered up, but now many women are finding their voice.

Katrina Lake, founder and chief executive of Stitch Fix, an online clothing startup, was allegedly harassed by a well-known venture capitalist.

She told the New York Times, “Female entrepreneurs are a critical part of the fabric of Silicon Valley. It’s important to expose the type of behavior that’s been reported in the last few weeks, so the community can recognize and address these problems.”

Experts agree that it’s a widespread issue that needs to be fixed; women shouldn’t have to form their own startups just to be free of harassment or find employment. But these gender-diverse startups may end up paving the way and being even more successful in their own right.

Study co-author, Alex Mittal, says they “have the potential to become huge — they’re great agents for change.”

KJ Erickson, the CEO of service exchange platform Simbi, notes in a report published by The Star, “Top female talent is more attracted to work on a team where they can see themselves in leadership and know that is respected in the company.”

Data shows that female tech leaders are much more effective, on average. Not only do female-led companies generate a higher ROI in sales, earnings, and equity, but they’re often found to be better leaders in general. Employees with female leaders feel that women have better leadership skills including initiative, integrity, drive, and self-development, according to a Harvard Business review survey. These skills could help a given company’s bottom line, to be sure, but they could also improve employee development and reduce turnover. Since $11 billion is lost every year due to employee turnover alone, this might provide more incentive to consider female leadership across various traditionally male-dominated industries.

However, the initial study did not address the issue of race. While there aren’t many female leaders in tech startups to begin with, there are even fewer women of color even involved in STEM careers at all. If startups and established companies alike expect to take their organizations to the next level, experts agree that they’ll need to take a good, hard look at their hiring practices and their own bias.