Women Are Being Shut Out of Web3 with Only 13% of Founding Teams Including at Least One Woman, and Only 3% of Companies Have a Team that Is Exclusively Female
Startups in the Web3 space founded by men raise almost four times more capital than those established by women, according to a new study by BCG and People of Crypto Lab. The study highlights measures that can address these imbalances and promote greater diversity in the industry before it's too late.
Web3 companies—those developing radical new applications involving the metaverse, blockchain technologies, and cryptocurrencies that are set to transform many global industries—are on the cutting edge of shaping the future of the digital world. But in one aspect, these companies remain stuck in the past: Women are vastly underrepresented among founders and investors. What's more, that underrepresentation is greater than in science, technology, engineering, and math (STEM) education and the wider tech industry. Only 13% of Web3 founding teams include a woman, and only 3% have a team that is exclusively made up of women.
These are among the findings of a study being published today by BCG X, the tech build and design unit of Boston Consulting Group (BCG), and People of Crypto Lab, a creative and innovation studio that aims to boost diversity, equity, and inclusion in the Web3 ecosystem. The firms partnered to analyze the gender diversity of founders and investors using a database from Crunchbase consisting of nearly 2,800 participants.
Titled “Web3 Already Has a Gender Diversity Problem,” the study also notes that in funding for Web3 companies, the split is even wider. All-male founding teams raise nearly four times as much, on average, as all-female teams—almost $30 million compared to about $8 million. And among Web3 companies that have raised more than $100 million, the percentage with all-female founding teams is zero.
The gender disparity extends to the overall Web workforce. Among all employees at top Web3 startups, the share of women is higher—approximately 27%—but they are often clustered in non-technical roles such as HR and marketing. Alarmingly, this gap is greater than in the overall workforce in STEM-based fields, where women make up 33% of the workforce, with 25% filling technical roles.
"The numbers are alarming. This is an economic as well as a diversity crisis, with opportunities being missed to back and scale businesses designed with female customers in mind. The gender gap in Web3 is an even bigger problem than what we've long known about in STEM companies overall. With Web3 we're not just talking about tech—we're talking about tech applied to every industry and every aspect of life," said Jessica Apotheker, BCG's chief marketing officer, and a coauthor of the study.
"Web3 companies will shape how people represent themselves online, transact business, and interact with each other. BCG research has found that companies with diverse leadership teams are better at innovation and more profitable. Web3 companies that do not embrace and leverage diversity from the start will forego a huge business and monetization opportunity."
Because the Web3 ecosystems are still early in its development, there remains time to address these issues using the following measures outlined by the authors:
- Measure everything. A critical first step is granular, objective measurement and reporting about the representation of women and other aspects of diversity—across the entire ecosystem of company founders, employees, and investors.
- Put women on investment teams. There is clear data showing that unconscious bias can sway funding decisions, and all-male investment teams are more likely to back all-male founding teams. To address this, some venture capital firms now require that investment teams include at least one woman.
- Design brand experiences to be inclusive. Companies creating a digital presence in Web3 should ensure that they create the widest range of experiences for the broadest possible base of consumers.
- Build a supportive ecosystem. Companies need to invest time and resources in ensuring that female founders and investors in the Web3 space can tap into strong networks that are diverse and inclusive. Mentorship—from women and men—is especially important in opening doors for aspiring female founders and investors. Web3 summits and conferences should commit to sponsoring events that work toward ensuring gender parity among speakers, with a commitment to at least 30% women speakers as a start.
- Partner with regulators. As governments and nonprofits focus more on environmental, social, and governance (ESG) issues, they are developing stricter reporting requirements and other measures regarding the gender makeup of companies and industries. Companies and investors have an opportunity to proactively collaborate and help shape those regulations, rather than simply waiting for them to emerge.
“Web3 will revolutionize how we interact, transact, and monetize as a society, but this can only be achieved if women are equally involved in its development,” said Simone Berry, cofounder of People of Crypto Lab and a co-author of the study. “Despite the current ecosystem being biased towards men, we are very early in development with an incredible opportunity not to repeat past mistakes and ensure that women have the resources and funding they need to lead the new digital economy.”
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