Women Ask: Why Have We Been Getting as Little as 4% of VC Money?
NEW YORK (MainStreet) -- It seems male investors like to give their money to other men -- even when the product is geared toward female consumers.
This became clear last month when entrepreneur and co-founder of popular sports website BleacherReport.com Bryan Goldberg caused an uproar when he announced the launch of a female-focused website, Bustle.com. The uproar was not so much caused by his encroachment on the terrain of women-themed sites, but because he claimed he was carving out new territory -- dismissing a slew of existing websites such as Jezebel, The Hairpin and Bust.
Adding to the collective ire was Goldberg's bragging at having been granted $6.5 million to launch Bustle, then offering to pay female staffers $100 a day for up to six posts, which translates to $26,000 a year, assuming the gig is full time. (The ads for these positions have been removed from the Web).
By comparison, the women's websites already out there -- founded and run mainly by women -- often run on much more modest budgets, having been overlooked by investors despite their popularity.
In an open letter to Goldberg, the Bust editors decried that he "was actually able to launch a website, with a spiffy responsive design ... All because some other men gave him $6.5 million."
With $6.5 million, they could spiff up their own website and pay writers better -- much better than Goldberg seems willing to, they wrote.
That seems unlikely to happen; the vast majority of all investment money in the United States goes to male-led ventures. Specifically, only about 4% to 9% of venture capital funding goes to women, despite the fact that as of a decade ago, 28% of businesses were owned by women, employing more than 10 million people and generating $1.5 trillion in sales.
A report by business analysts the Diana Project, Gatekeepers of Venture Growth: The Role and Participation of Women in the Venture Capital Industry, found that at the turn of the century women represented less than 10% of high-level venture capitalists and had been leaving the industry at twice the rate of men.