The Allyship

Women are good business. 

The data is clear: women-run ventures outperform those run by just men. According to a startup study, companies with a female founder perform 63 per cent better on average than all-male founding teams. Another report showed that for every dollar of funding, startups founded and cofounded by women generated 78 cents, while male-founded startups generated just 31 cents.

So why, despite the evidence, do women continue to face systemic barriers in the venture capital world? The percentage of women in VC firms is low, the number of women entering the field is low, and there remains a lack of momentum to shift these barriers. The challenges this creates downstream are significant: women founders have only received around $4.5 billion—less than two per cent—out of the whopping $238.3 billion in venture capital dollars allocated in 2022. For women founders of colour, these numbers are even more dismal.

The Allyship is hoping to change all that, with a mission to increase the representation of women in venture capital to at least 30 per cent by 2035. By all measures, it’s an ambitious goal, but for Katrina German and Neal Dempsey, who together founded the movement, it’s an issue too important for small efforts.

German and Dempsey's unique perspectives, experiences, and networks drive the influence of The Allyship. German cut her teeth in the non-profit sector before becoming a tech-focused entrepreneur who founded Ethical Digital, a venture aimed at making the internet a better, more equitable space; and Dempsey is a prolific venture capitalist and the Managing General Partner of Bay Partners, one of the longest-running venture capital firms in Silicon Valley. 

“We want to do what we can to change mindsets in the venture capital community,” says German. “It’s about equity and giving people the same opportunity to get into the game—and not just because it makes good financial sense, but it’s the good and right thing to do.”

“We’re stuck in a vicious cycle where venture capitalists only invest in founders who look like them—typically other white men. It’s been long overdue that we get in the habit of checking our unconscious biases,” adds Dempsey. “It just shouldn’t be like this, especially not today, in 2023. It doesn’t make any sense, and I want to do what I can to help change it.”

The Allyship’s research aims to address the gender gap and encourage new pathways for women in the venture capital world. From bringing together an experienced and influential advisory board, conducting industry interviews and compiling them into an in-depth literature review, and launching a podcast, the initiative has distributed its efforts in a variety of directions to amplify and emphasize the importance of its mission.

The podcast, called “Passing The Mic: The VC Exchange” and hosted by Dempsey, features women who are powerhouse entrepreneurs, venture capitalists, CEOs, executives, and leaders, providing them with a platform to share their stories and highlight the hurdles they face as they try to fund and scale their ventures or break into the industry.

"This podcast goes beyond venture capital," explains Dempsey. "This also calls out the need for women in all areas of innovation—VCs, entrepreneurs, C-suite executives—technology as a whole, which affects the entire ecosystem."

The Allyship’s most recent effort is an intensive eight-month research project in partnership with Ted Rogers School of Management’s Diversity Institute at Toronto Metropolitan University. Backing academia with survey responses from women and men in the U.S. and Canadian investment and entrepreneurship landscapes, the data painted a thorough and complete picture of the scale of the problem. The subsequent report, “Women and the Venture Capital Industry in Canada and the United States,” will lay the foundation of our work moving forward, says German.

“We wanted to understand the barriers fully, which helps us understand what can be done to remove them,” she says.

Despite 2022 being a slower funding environment than 2021, venture capital continues to be a dynamic and growing field making significant contributions to economic prosperity, with global venture funding reaching $445 billion. But consistent with the highs and lows, systemic challenges stubbornly persist, including significant barriers preventing women from attaining a career in the field and the retention and advancement of women who do. Data found that just 15 per cent of Canadian venture capital firms and 13 per cent of U.S. firms have women partners, perpetuating an uneven distribution of investments.

Because women are excluded so systematically, countless opportunities are neglected, their potential remains untapped, and millions of dollars are left on the table: one study highlighted how VCs could have made an additional $85 million over five years had they invested in both women and men-founded startups equally.

“It’s risky to not be thinking about diversity right now,” says German. If you want to find fresh ideas that scale, “there’s an entire universe out there trying to solve problems that haven’t been funded,” she adds. “There are massive markets for solutions, but we need to support an ecosystem that is solving them.”

Armed with impactful research, The Allyship’s awareness and action campaigns will target venture capitalists, entrepreneurs seeking investments, and policymakers to promote gender parity in the VC world and secure a “brighter and more diverse future” for tech entrepreneurs and the next generation of women entering the industry. 

The Allyship’s efforts are on the next phase of developing a strategic plan to push existing venture capitalists to think practically about diversifying their teams from societal, organizational, and individual levels. Still, Dempsey and German recognize things won’t change overnight. “But we’re not the only people working on this,” German says. “If we all keep chipping away, eventually, we’ll see major change.”