Women outperform men-only teams by 9.3% — European Women in VC report

In 2023, gender diversity continues to play an important role in European Venture Capital firms. According to the research published by European Women in VC, it improves financial performance, as on average, each 10% point increase in the representation of women in senior management teams is associated with a 1.3% point increase in internal rate of return.

The 2023 report highlights the positive financial and societal impact of diverse investment teams in the growth and venture space. It is based on a survey of 104 European-headquartered VC firms representing 220 funds with combined assets under management of nearly €12 billion, as well as a PitchBook data sample of 558 European-headquartered VC firms. AIN.Capital shares the key points.

Key takeaways

• The report states that the financial performance of European VC funds increases with higher representation of women in senior management teams. Management teams mostly composed of women outperform men-only teams by 9.3% points.
• On average, each 10% point increase in representation of women is associated with a 1.3% points increase in IRR of a VC fund.

• The higher the proportion of women in European VC senior management teams, the lower the volatility of the returns of the fund portfolios they manage.
• However, gender gaps are still an issue in European VC firms, as only 16% of general partners are women in 2023.
• In terms of actual investment power, female GPs have less investment power, raising only 9% of total AUM, compared with 91% raised by male GPs.

Survey results

• Overall, the number of women entering the VC market is rising. 47% of European VC firms expect the number of female GPs in their companies to grow over the next five years.

• However, only 30% of investment committees have women members, and only 12% have members from other minority groups.
• Limited partners who make decisions are still predominately male.
• Only 50% of respondent VC firms have corporate strategies for addressing gender diversity.