Women Get Much Less in Start-Ups Than Men

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Add insult to injury. Women make less money than men in almost every industry. The average of the discount is over 20% on average. The number has not changed recently.

Now, it turns out that women get much less equity in start-ups than their male counterparts do. Since equity can be much more valuable than salaries as companies grow, the disadvantage can be extreme.

Equity management platform Carta conducted a study of the problem. Its universe was over 6,000 companies and covered 180,000 employees. The researchers wrote in its report:

Women make up 35% of equity-holding employees, but hold only 20% of employee equity. Female equity-holding employees own just 47 cents for every dollar male employees own.

While many start-ups fail, some modest number are sold and even fewer go public.

When companies are sold or go public, there are often millions, tens of millions or hundreds of millions of dollars at stake. Equity award values are usually below the amount companies receive in these transactions, so the percentage of equity an employee or founder owns can be highly valuable.

The data adds to a large body of evidence women have large compensation differences in the workforce. Women’s advocacy firm American Association of University Women puts this at 80% of base compensation, which is usually salary. The organization says the figure has been stuck at that level for years, and it is worse in some parts of the country. In some states, the figure is closer to 70%.

There is nothing surprising about the equity gap. It is, from a women’s compensation standpoint, more of the same.