Despite the VC industry’s commitments to improving diversity, it’s a well-documented fact that the most senior ranks are still overwhelmingly male.
But new analysis by Sifted sheds light on why that's likely to continue if European VCs don’t start to look for candidates outside the industry.
Given that internal promotions are an important way to diversify the industry's talent pipeline, we took a look at the makeup of Europe’s top seed and Series A firms by seniority and gender, with support from talent adviser Julia Dous.
The analysis shows that while the industry as a whole is close to making gender parity at the junior and middle levels, female representation drops off sharply for the most senior positions.
In fact, there are only 23 female partners at the top 22 funds in Europe, and only two women were made partner in 2021, one a promotion and one an outside hire. Meanwhile, there were nine male partner appointments by these funds last year.
The list of the top 22 funds in Europe is based on Dealroom’s prominence ranking of seed and early-stage funds that made notable investments or hires in Europe in 2021. We’ve included a note on methodology at the end of this article.
So why is there a lack of female representation at the top of these firms?
Keeping it in the [investment] family
A big barrier standing in the way of more female partner representations is the fact that Europe’s top VC funds tend to stick to hiring from a pool of existing investors — rather than hiring women with transferable experience from outside the industry.
According to Dous’ analysis, the top funds hired 68 new investment team members in 2021, of whom 30 were women.
Of those 30 female hires in 2021, 46% were made from within the VC and private equity (PE) industries. Another third (33%) were operator hires, hailing from startups such as Revolut, Elder and Elvie.
Given that the majority of the industry’s new hires continue to be from within the investor space, this narrows the talent pool further for potential female partner hires.
“There seem to not be enough potential female candidates for senior roles that tick all the boxes — ie, having started at McKinsey or Goldman, then done a Harvard MBA, then two years at a startup before joining VC,” says Dous.
Once women have joined the investment industry, our data shows it’s more likely they will work their way up the ranks in their current firm, making it harder for firms to hire straight to the senior level from outside.
“The competition for these seemingly ‘picture-perfect’ CVs is red hot,” says Dous. “If female investors are happy and internally progressing, they are locked in due to long time incentives with carry.
“Then, if they are open to talking, they also have American funds knocking on their door.”
While more investors are hiring talent with a non-investment background, lifetime VCs say their lack of knowledge of deal processes can make it difficult to integrate them. And associates can feel shy about teaching their superiors how the work is done.
Lonely at the top
While firms are close to achieving 50/50 parity at junior and mid-level positions, there is still a lack of gender diversity at the highest positions.
This year is off to a better start, however, after SpeedInvest last week announced the promotion of Deepali Nangia to partner, joining GP Marie-Helene Ametsreiter as the second senior female on its investment team.
Nangia’s promotion and the appointment of Sabina Wizander at Creandum last year have brought the number of female partners (including GPs) across European top tier funds to 23 — 18% of the total pool of partners.
But eight of the 22 VC firms for which Sifted could confirm information still have no female partners — that’s more than a third (36%). They are Acton, BTOV, DN Capital, Earlybird, HV Capital, Point Nine, Project A, and Target Global.
Talent in the middle
At the mid-level, however, the gender imbalance is less stark. Index Ventures has the most women at mid-level — 10 women, accounting for 59% of its 17-strong mid-level team.
Then came Target Global and Northzone in second, with five women at mid-level; and Dawn Capital and Atomico come after, both with 3 women at mid-level — making up 75% of Dawn’s team at that level and 50% of Atomico’s.
But Battery Ventures, BTOV, DN Capital, Lakestar, LocalGlobe and Project A all have no female investors at mid-level.
In LocalGlobe’s case, this is because the firm is only made up of partners. At all the other funds, however, this could indicate more of a systemic issue.
Ones to watch
So who are the industry’s future partners? Given that hiring to partner level is still very much internal, Sifted pulled together the mid-level female investors who joined their fund in 2018 or earlier and who soon could be up for a promotion.
Lukaszewicz joined Balderton in 2018 from Goldman Sachs, where she spent three years working across the financing group and then the consumer, retail and M&A team in the Nordics. She continues to invest mostly in the Nordics at Balderton, with a focus on ecommerce infrastructure, fintech, foodtech, sustainability, gaming and operational complex businesses.
Hurtado had a similar path to Lukaszewicz to her role at Balderton, joining in 2018 from the tech and telecoms M&A division of Goldman Sachs in London. She has an MBA from Columbia Business School, and now focuses on consumer, sustainability, healthtech and B2B SaaS investments across France, Spain and Portugal.
Firm: Notion Capital
Opdam joined Notion Capital in 2018 after three years at new venture debt fund Columbia Lake Partners. Before that, she’d gained a financed degree in London after having cofounded a non-profit NGO that ran for two years. At Notion, Opdam focuses on B2B software company investments in the Benelux and DACH region.
Firm: Project A
Cramer joined Project A as an investment intern in 2017, and was promoted to investment manager after six months. Before that, she did a range of internships across a range of sectors including private equity and luxury holdings. At Project A, she focuses on business software and education investments across the DACH region, France and Italy.
BaoY Van Cong
Firm: Target Global
Cong joined Target Global in 2017 from Morgan Stanley, where she worked on the M&A team across the TMT, financial services and industrial sectors in London and Sydney. Before that, she’d begun her career as a graduate trainee at Germany’s Postbank. At Target, she helps lead the growth stage investment team and focuses on edtech, consumer and SaaS companies.
Firm: Target Global
Chong is an investment director at Target Global, which she joined in 2018 from Hasso Plattner Ventures. There, she’d led investments in software and consumer companies including ReBuy, GoEuro and iZettle. Before that, she comes from an operator background, having founded two successful consumer companies. At Target, she invests in the SaaS, Consumer, and Web3 space, with a focus on the German and Spanish markets.
A note on methodology
We have tried to confirm all these figures with the investment teams themselves, but in the case that firms were unable or did not wish to provide data, information has been compiled from LinkedIn. We looked at the gender breakdown of the firms’ investment teams, which does not include operational, finance or investor relations partners.
We did not look at other measures of diversity, given that most funds do not track at this point.
*The funds included are:
Earlybird (Digital West)
Point Nine Capital
*This piece has been updated with additional data for HV Capital and Dawn Capital