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For women at startups, the equity gap is worse than the pay gap

For women at startups, the equity gap is worse than the pay gap
[Photo: Flickr user Mikael Moiner]

If you think the gender pay gap is bad, we have even more bad news: When it comes to equity, women are far worse off. According to a study by ownership management platform Carta, they hold just 47¢ for every equity dollar that men have.

[Graphs: courtesy of Carta]
Carta’s analysis, which pulled data from nearly 180,000 employees across more than 6,000 companies, found that women accounted for 35% of employees with equity, but they only owned 20% of equity dollars. The equity gap is even worse for female founders. Of the 15,000 founders surveyed, 13% were women, but they only owned 6% of founder equity; they have 39¢ for every dollar of equity held by male founders.

One reason men have a bigger share of equity dollars is that early-stage companies are more likely to have male employees–in part because far more startup founders are men. Carta found that in companies with 10 or fewer employees, only 29% were women. It was only when a company had close to 400 employees that women made up at least 40% of their workforce.

[Graphs: courtesy of Carta]
So why does this matter? People with the lion’s share of equity benefit most from big exits and acquisitions–which means they have the cash to turn around and invest in new companies or launch startups of their own. Carta’s study doesn’t account for how race and other identifiers impact how equity is distributed, but I can only imagine what that analysis might reveal.

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