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You can’t measure change in Venture Capital by ignoring half the industry

Yesterday, Dan Primack over at Axios published commentary on the state of women as partners in VC funds. While we agree with Dan that women are still incredibly underrepresented in the venture industry, we question his methodology. For his assessment, he excluded all funds with under $100M in AUM — why?

The reality for venture capital is that the vast majority of venture firms are under $100M in size. Change — as with so many industries and cultural norms — rarely comes from the top. It’s more likely to come from the bottom … from the startups, from the grassroots, from the early-stage Micro VCs who are managing their first or second funds. So why examine only the large funds that have reputations for being stuck in the past and hindering partner-track advancement for women and people of color?

At Startup Angels, we believe that Micro VCs are not only the volume of the industry, but they are its future. Through our work with our private placement marketplace for Micro VC funds, we’ve met with over 150 U.S. seed funds over the past year. Many of these funds are downright inspiring.

  • First: they are incredibly diverse. Of Micro VC funds raising or recently closed in the U.S. market, we know of at least 50 funds that have a GP who is a woman, a GP of color, or both.
  • Second: many have unique, dynamic investment theses. Some funds are built around sectors ripe for transformation, targeting areas like cybersecurity, hard science, big finance, edtech, and much more. Others are impact driven, focusing on sustainable technologies, underrepresented founders, or undercapitalized parts of a state or region. Still others are experimenting with new fund frameworks, including revenue-based and no-fee models.
  • Third: they’re located all over the country. By our count, every major U.S. city has multiple seed-stage funds, and nearly every mid-sized city has at least one fund raised or coming to market.

So yes…women are still incredibly underrepresented at the large VC firms. But the good news is women are starting their own funds instead and they’re predominantly operating as Micro VCs. We believe that some of these firms will grow to be the industry leaders of tomorrow, but they won’t meet Dan’s $100M criteria until Fund III or IV — if ever — as many of the top Micro VCs choose to stay small and focused.

If we’re going to assess change in the venture industry, we must look at it holistically and recognize the momentum with Micro VCs. Yes, it’s early. Yes, there’s a lot more to do. But measuring dinosaurs isn’t usually a good predictor of the future.



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