Now that anyone can invest in a start-up, you might be wondering what you should look for before you pitch in. A great idea? Sure. Smart people? Absolutely.
Oh, and women.
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This isn’t just for warm fuzzies. A new study by Dow Jones shows–definitively–that start-ups are more likely to succeed if they have women on the executive team.
The study, which examined more than 15 years of data on venture-backed start-up companiesBrand new, high-risk and high-growth companies that are given funds to operate by investors, with the hopes that they will give a return on the initial investment either through an IPO or by being acquired., found that this held true no matter which way you slice the data:
- Successful private companies have a median of 7.1% female executives, while unsuccessful companies have only 3.1%.
- As the number of females in the VP and directors’ suite (or couch rather, it is a start-up) increases, so does the chances of success for the company.
- Of start-ups with five or more females, 61% succeeded. But less than 50% of companies overall in the study succeeded.