Women (especially founders) face a 20% equity gap at work

Women (especially founders) face a 20% equity gap at workWomen (especially founders) face a 20% equity gap at workWe already know that there is a gender pay gap holding women back at work, but did you know that there is an equity gap too?For every dollar of equity a man holds in a company, women hold 47 cents, according to data of 180,000 employees across 6,000 companies compiled by Carta.When you get equity at a company, you earn mora than a paycheck, you also get a stake in a business that can secure your financial future. Unlike cash, equity is likely to increase in value over time. This is the bet that many early startup employees make If I work at this new idea and our company gets bought or goes public, I can one day get rich overnight. But women are missing out on this opportunity. The research found that women make up 35% of equity-holding employees, but only hold 20% of equity. The gap gets more pronounced for female founders.They only own 39 cents for every dollar of equity a male founder earns. In total, women make up 33% of employees and founders in the workforce, but only hold 9% of equity.Women only hold 20% of the employee equity valueWhat happened to all that equity value? In response to the research, the Angels investment collective of six women suggests that the problem is a combination of factors. For one, female founders are more like to raise money at lower valuations and have to sacrifice a greater proportion of their company to investors, which dilutes their equity value. For another, women are less represented as investors - they make up 9% of venture capitalists, one study found - and are more likely to face industry bias overall.This bias creeps into decision-making. One study on Swedish venture capitalists found that investorswould be more likely to question a womansentrepreneurship knowledgethan a male entrepreneur. Men in business were more likely to get the benefit of the doubt. A male entrepreneur would get described optimistica lly as young and promising while a woman got the tepid response of young, but experienced.For women to get more ownership of the businesses they help build, Angels suggests that closing the capitalization table gap needs to become a priority for leaders. Their advice to founders and CEOS? Include and develop women from the beginning of a companys story. Raise money from women investors. Hire women from day one. Compensate men and women equally when in similar roles. And focus on women of color, especially URMs underrepresented minorities, in all these areas as they face even higher barriers in our industry, the group suggests.