Venture Capital's 'Me Too' Moment

Abstract

In this paper, we document the under-representation of women in the venture capital sector. We find that the high-profile Pao v. Kleiner Perkins gender discrimination trial likely had dramatic effects on the hiring of women in venture capital: firms with higher exposure to the trial, measured by their home states’ Google search interest in the trial and their network connectivity to Kleiner Perkins based on shared investments, experienced larger increases in the hiring of female venture capital investors. We provide additional evidence that the impact of the trial is concentrated on the venture capital sector, and that these changes do not appear correlated with other contemporaneous social movements. Lastly, we show that the fraction of venture-backed founders who are female also increased after the Pao trial, with both male and female venture capitalists increasing their investments in female founders. These findings are consistent with the notion that the Pao gender discrimination lawsuit has increased the awareness of gender issues in venture capital, leading to changing hiring practices and spillover changes in investment decisions.

Keywords: venture capital, gender diversity, discrimination