'Unsurprising' but 'deeply disappointing': Deerfield report finds vast gender gap in VC-backed healthcare

“Given the outsized role that investors play in board seat allocation and placement, the gender diversity of investment firms cannot be ignored in the context of gender diversity of private company boards,” Deerfield said. (iStock/Getty Images Plus/fizkes)

Studies on diversity in the life sciences industry often look at the makeup of companies’ employees, executive teams and board members. In a new report, Deerfield Management zeroed in on early-stage companies and the venture capital firms that back them, offering a look at gender diversity in company creation. 

In an analysis of 140 venture-backed companies, the report found nearly half of the companies had no female board members. Women held about 10% of director roles in those companies. The report, titled “Gender Disparity Among Venture-backed Healthcare Companies and Their Investor Base,” included venture-backed companies working in therapeutics, medical devices and diagnostics, healthcare information technology and healthcare services subsectors. 

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And of the 140 companies analyzed, only six (4%) had boards whose members were at least 50% women. All but one of those six companies also had female CEOs. 

“The findings of our report are unsurprising, but still deeply disappointing,” said Leslie Henshaw, a partner on Deerfield’s Healthcare Services team and one of the authors of the report, in a statement. “With this research, our goal is to help our peers understand the considerable gender imbalance on their own teams is having a direct impact on the board composition of the companies they fund, increasing the imperative to seek out diverse independent board members.”

Besides the 140 healthcare companies, the report also looked at the top 50 healthcare investment firms based on the number of healthcare transactions they took part in. The authors excluded four firms from the analysis because they didn't publish information on their investment team on their public-facing website. They excluded another two because they were smaller funds within larger firms. Of the 44 firms, four (9%) had no female investment professionals. Overall, women made up only one-fifth of investment professionals. 

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“Given the outsized role that investors play in board seat allocation and placement, the gender diversity of investment firms cannot be ignored in the context of gender diversity of private company boards,” Deerfield said in the statement. 

“We hope these findings will serve as a wakeup call for private companies in our industry to examine the gender composition of their leadership and work harder to diversify and grow more equitably across all levels of their organizations,” said Christine Livoti, director at the Deerfield Institute at Deerfield Management and the other author of the report.