Women driving start-up success

19 October 2012
| By Staff |
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Venture-backed start-ups that place women at the helm have more success than all-male affairs according to a new Dow Jones report that asks the question 'do female executives drive start-up success?'

Dow Jones found the overall proportion of female executives in successful companies was 7.1 per cent compared to 3.1 per cent at unsuccessful companies and successful companies had an executive team of 5-25 per cent females.

"We claim with statistically significant evidence that there is a dependence between a company having female executives and its success," the report said.

But success was conditional on industry. The four largest sectors; financial services, IT, healthcare and consumer services, were found to have had a higher median proportion of females at successful companies than unsuccessful companies.

That is important when you note that Dow Jones found that 1/3 of business and financial services start-ups failed. Start-ups with five or more females at vice president (VP) and director levels had a 61 per cent success rate while 39 per cent failed.

Women are still under-represented in executive positions; of privately held companies, 1.3 per cent had a female founder, 6.5 per cent had a female chief executive and 20 per cent had one or more female C-level executives.

Although new start-ups were often all-male affairs and males dominated across all levels, women made some progress in vice-presidential roles.

Of the female executives at venture capital-backed companies, 46 per cent held a VP role compared to 30 per cent of males while C-level roles held 20 per cent of females to 28 per cent male.

Women also made up 19 per cent of board positions compared to 36 per cent for men. 

The report said females were often hired over time - companies that received initial equity financing in 2006 were more likely to have one or two females executives than those financed in 2011. 

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