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MYTHS From page 46 4. WOMEN CAN’T CUT IT IN THE TECH WORLD. Women start only around 3 percent of the nation’s technology companies. They are almost absent in high-level technology positions. They contribute to fewer than 5 percent of all I.T. patents and 1.2 percent of opensource software. This despite the fact girls match boys in mathematical achievement, 140 women enroll in higher education for every 100 men, and women earn more than half of all bachelor’s and master’s degrees and nearly half of all doctorates. Yet our research found almost no difference in the factors driving success for male and female company founders. They had the same motivations, were of the same age, had similar levels of experience and about equally enjoyed the culture of start-ups. Men and women were equally likely to have children at home. It’s not that women don’t do well in business. According to research by the venture capital firm Illuminate Ventures,
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women-led companies are more capital-efficient, and venture-backed companies run by women have 12 percent higher revenue. The problem is a broader one. Few girls get encouragement to study engineering; they encounter negative stereotypes in the workforce; when they approach venture capitalists, they are asked demeaning questions such as, “How are you going to manage your company when you have children?” 5. VENTURE CAPITAL IS A PREREQUISITE FOR INNOVATION. The National Venture Capital Association touts its members’ impact on the U.S. economy. But less than 5 percent of venture capital goes to early-stage companies — those taking the risk of developing innovative products. Our analysis of more than 500 companies in high-growth industries revealed that not even 11 percent of these companies took venture capital at any stage of their existence. The Kauffman Foundation ran a similar analysis of companies on the Inc. magazine 500 list and found that only 16 percent of them raised venture capital. The reality is that venture capital follows innovation.
cvbusinessmonthly.com
Such investors seek out compa- stimulate innovation; it wants in nies that already have working once it looks like a good bet. Vivek Wadhwa, a Washingproducts and proven business models. Venture capital doesn’t ton Post columnist, is the direc-
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NOVEMBER 2011 tor of research at the Center for Entrepreneurship and Research Commercialization at Duke University.