Why pattern matching in venture capital needs unraveling

Venture capital, though vital for innovation, disproportionately favors male-led startups due to embedded pattern matching. Despite the 1988 Women's Business Ownership Act, investments in women-led companies have stagnated at a low percentage for decades. Pattern matching, a practice of investing in the familiar, has become ingrained since the industry's inception, with men primarily investing in other men. This bias persists even though data indicates women-led startups generate more revenue per dollar raised. Organizations are working to expand the pipeline of women in venture capital and support female founders to disrupt this pattern. Sourcing is a crucial area where women venture capitalists can identify high-potential, women-led startups. Moving beyond familiar networks is crucial to increase efficiency and broaden the pool of considered startups. Addressing the underinvestment in women and people of color could unlock trillions in potential returns. The women entrepreneurs and advocates who persevere inspire hope for a future where progress is realized.