The compensation picture for women in VC may be reaching a tipping point in Canada—at least at the highest levels.
For the first time, women’s average salary in senior investment roles was higher than that of men, according to the 2024 Canadian Venture Compensation Report.
The average minimum compensation for four roles—senior associate, vice president, principal, and partner—now sits above $100,000. The median salaries and median bonuses across all positions were the highest in Ontario.
Though the findings provide a nugget of aspiration for women looking at VC leadership roles, data still indicates inadequate family leave policies and a drop-off of women in the highest ranks.
31 percent of firms have no women in firm or investment leadership, and 50 percent do not count a woman among senior investors.
Women investors on average received lower bonuses, despite salaries remaining mostly even for entry-level positions. Meanwhile, people of colour saw lower salaries across the board in Canada, just as a recent Business Development Bank of Canada (BDC) report noted that fewer firms have diversity targets for the companies they invest in compared to last year. The report did not provide data on how women of colour fared overall.
Glass ceiling, leaky pipes
Across Canada, women are increasingly present at venture capital (VC) firms, but not among the senior ranks where big investment decisions are made.
And as companies grow wary of Diversity, Equity, and Inclusion (DEI) commitments, the gap is reaching a tipping point. Only about 25 percent of Canadian venture firms are hitting gender parity at senior levels—leaving male-dominated investment committees as the norm nationwide.
Women now comprise over half of the staff at 37 percent of VC firms. However, the further up the leadership ladder, the fewer women are present: 31 percent of firms have no women in firm or investment leadership, and 50 percent do not count a woman among senior investors.
VC firms in Canada seem to follow the pattern of a leaky pipeline, a phenomenon that has been well-documented in science, technology, engineering, and mathematics (STEM) fields. It’s also been called broken scaffolding, an indicator of the poor structural support for women in the workplace.
With representation at the top lacking, women are walking out: half of departures were women at 59 percent of GPs in 2022. Two-thirds of GPs saw more women leaving than men.
The exodus is having an impact on returns, as well. Just a 10-percent increase in the share of women partners is associated with higher annual returns and more profitable exits, according to a 2019 Harvard study. More homogeneous venture firms are less successful in general, a Toronto Metropolitan University study found.
Building stronger supports
Increasing the number of women in leadership and entrepreneurship is a stated goal of both BDC and the Canadian government, as evidenced by funding and coaching available through the Women’s Entrepreneurship Strategy.
Paula Cruikshank, senior vice president of fund investments at BDC Capital, said in an email to BetaKit that the improved gender balance at the junior level will translate, over time, into a better balance at the senior level.
“I’m convinced that increasing visibility of women and visible minorities in the industry, especially in senior roles, will not only inspire others to enter the field but also foster a more inclusive environment that attracts diverse talent,” Cruikshank said.
But time and again, research has shown that increased visibility does not change cultural bias or retain women at higher levels. Workplace policies that acknowledge domestic responsibilities, such as family leave, are best practices to promote retention among women employees, according to a report from the federal ministry, Employment and Social Development Canada.
Cruikshank also noted that commitments to human resources and DEI policies among VCs represent a “positive mindset shift” that she believes will create change over time.
RELATED: Lack of inclusion, unclear parental leave still hamper retention of women in Canadian VC
The CWVC report found that firms offering parental leave increased by 16 percent compared to last year and were more transparent about the benefits available. Still, over half of those surveyed said the parental leave program did not fit their needs or were unsure if it did.
Even in provinces where social policies have promoted expansive parental leave, such as Québec, women are still underrepresented in venture firms. A recent Réseau Capital survey found that women make up only 23 percent of surveyed VC firms in the province, representing a microcosm of the national issue.
However, the report noted an encouraging number: 55 percent of all venture capital raised in Québec since 2016 has gone to companies with at least one woman co-founder or leader.
To address systemic challenges and retention gaps, women-led organizations have emerged, such as Victoria-based Women’s Equity Lab (WEL), as well as venture firms like The51 and Sandpiper.
WEL uses a pooled fund system to facilitate investing for women early in their VC careers with little experience by offering minimal risk opportunities. WEL members write smaller cheques, typically for pre-Series A rounds, with a preference for women-led companies that “do no harm.”
Ariel Siller, the new managing director of the women’s network and investment fund said that true equity includes policies such as “fair pay and mentorship,” as well as an inclusive culture where diverse perspectives are valued.
The goal is to reduce barriers that have pushed women out of the field and blocked them from entering altogether—to drive better representation now and ensure it trickles up.
CORRECTION (11/21/2024): A previous version of this article stated that 59 percent of GP departures in 2023 were women. In fact, at least half of departures were women at 59 percent of GPs in 2022. BetaKit regrets the error.
Feature image courtesy Unsplash.