Venture Capital's 'Me Too' Moment
Jacobs Levy Equity Management Center for Quantitative Financial Research Paper
NBER Working Paper No. w28679
49 Pages Posted: 18 Aug 2021 Last revised: 15 Sep 2021
There are 3 versions of this paper
Venture Capital's 'Me Too' Moment
Venture Capital’s 'Me Too' Moment
Venture Capital's “Me Too” Moment
Date Written: August 2, 2021
Abstract
In this paper, we document the historically low rate of hiring of women in the venture capital sector. We find that the high-profile Ellen Pao v. Kleiner Perkins gender discrimination trial had dramatic treatment effects. In difference-in-differences regressions, we find that the rate of hiring of female venture capitalists increased substantially after the trial and that the hiring was more pronounced in states that were more receptive to the exposure. We use the state-level mandated maternity benefits as an instrument for the receptivity to the treatment effects of the Pao Trial. We also show that the fraction of founders who are female increases after the Pao Trial, but that the increase is driven entirely by the hiring of female venture capitalists. There is no increase in the propensity of male venture capitalists to differentially invest in female founders in the post-Pao Trial period.
Keywords: venture capital, gender diversity, discrimination
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