Just 15% of general partners in Europe are women, according to a European Women in VC report from May 2022. And VCs are slowly waking up to how crucial parental leave is in attracting, and keeping, female talent, particularly in senior roles.
That said, just half of funds in Europe have a parental leave policy, according to the first survey of its kind by impact fund AENU.
Of 66 funds surveyed across 10 countries, 50% already have a parental leave policy and 15% are in the process of setting one up. The funds surveyed cover a variety of stages, with assets under management (AUM) of the funds ranging from below €100m to €500m and above.
It’s important to note that the data may not be fully representative of parental leave at European VCs broadly, given that respondents were mostly from firms that already have robust policies or that are thinking about creating new policies, says Melina Sánchez, principal at AENU. That means the actual proportion of VCs with parental leave policies is likely lower than this survey suggests.
Sifted dug into the data to see how well the current parental leave policies of VCs stack up.
Paid leave
VC firms are typically less professionalised than other traditional investors, with many lacking HR policies or a dedicated person to manage the people function.
This — and the fact that VC funds have typically been male-dominated — partly explains why a parental leave policy is often only introduced by VCs once an employee in the firm is due to have a baby, says Caroline Chayot, chief people officer at Atomico.
85% of the firms that already have a parental leave policy surveyed say they provide paid parental leave, above what is statutorily mandatory in most countries — in the UK, for instance, women on statutory maternity leave receive 90% of their weekly earnings for six weeks, and then just £156.66 per week for the following 33 weeks.
That means that the individual’s full salary is paid by the VC for an average of 18 weeks. The range of paid leave offered to employees ranges from four to forty weeks.
For most firms, the amount of paid leave offered to the primary caregiver is more than what's offered to the secondary caregiver — an outdated approach, according to many funds Sifted spoke to.
Research shows that equal parental leave can have a significant impact in reducing the gender pay gap
Chayot says that it was important for Atomico to have an equal parental policy, where both caregivers are entitled to the same 24 weeks of paid leave, to help make it the norm for fathers to play an active role in childcare.
There is also lots of research showing that equal parental leave can have a significant impact in reducing the gender pay gap.
Carry and board seats
One concern for many VCs when taking parental leave is whether or not their carry will continue to vest. Sifted has heard horror stories in the past about women who went on maternity leave and had their vesting schedule automatically paused.
There are signs that this is being taken more seriously: 85% of the firms surveyed say they allow carry to accrue during parental leave for an average of eight months. This ranged from three to twelve months across all 66 VC firms.
Another concern for partners of VC firms is board seats.
70% of respondents say they allow investors to decide whether to pause, leave or keep their board seats while on parental leave.
Atomico also allows for this flexibility, says Chayot. If investors want to give up their board seats temporarily, Atomico arranges for a colleague to take over, always by consulting with the initial board member.
“This also gives an opportunity for someone else to sit on the board of a company in an area they’re interested in,” adds Chayot.
Making it work
While awareness of parental leave is growing — 72% of respondents said that at least one person in their firm has taken parental leave before — “there needs to be more education around operationalising [parental leave] and making it work,” says Atomico’s Chayot.
The two keys to creating and sustaining a parental leave policy are flexibility and role modelling, according to Chayot.
In terms of paid leave, VCs should encourage investors to take time off when it works best for them and their family, meaning it doesn’t always have to be taken in linear chunks. “For example, a father-to-be could take a month or two off as a block, come back when, for example, the firm is fundraising, and then take another couple of months off at the end of it,” explains Chayot.
Atomico offers childcare support including a 10% discount on nursery fees as well as six sessions of back-up child care, which employees can use when their normal childcare option is unavailable, which helps to make assisting working mums and dads a part of the firm's culture.
The other key to success is having the leadership team model the parental leave policy themselves to be an example for the rest of the organisation — especially to men, who statistically take much less leave than women, if any. When Atomico launched its policy in 2018, the firm had two fathers at senior level who took parental leave.
We made it work and were able to show that it doesn’t slow down efficiency, it creates opportunities and it’s good for the person’s family, as well as their career advancement
“We made it work and were able to show that it doesn’t slow down efficiency, it creates opportunities and it’s good for the person’s family, as well as their career advancement, whether they’re women or men,” says Chayot.
Margarita Skarkou, principal at 2150, a VC firm focused on urban sustainability, says the “greatest challenge” it faced when implementing its parental leave policy was reminding team members to actually take time off. There’s a natural fear that stepping away could leave their work unattended.
“We have overcome this by hiring interim replacements where the individual was closely involved in the interview process to feel that their work was in ‘good hands’ or rotating responsibilities such as board roles while the team member is away,” Skarkou tells Sifted.
Another aspect of paternal leave that is often overlooked by VCs — but that can be beneficial for reintegrating staff after paternity leave — is returnship policies, which include things like reduced working hours, additional remote options or mentorship.
Only half of the firms surveyed have flexible returnship policies.
