Diverse executive teams at health startups see higher investments, but just 6% have women executives

While more than half of healthcare workers are women, just 21 percent of executives and 21 percent of board members at Fortune 500 healthcare companies are women, according to a Rock Health report.

According to the report, just 6 percent of CEOs of funded digital health companies are women, and of 148 venture capital firms investing in digital health, women make up 10 percent of partners at those firms responsible for making final investment decisions.

Additionally, startups that have women on the executive team tend to raise more money than startups with all male executive teams. According to Rock Health, the average investment size for diverse teams is $12 million, while the average investment size for all male teams is $8 million. Diverse teams have a valuation 64 percent higher than all male teams in the first round of funding, and 49 percent higher in the last round of funding prior to exist, according to the report.

Similar dynamics hold true for venture capital firms, according to Rock Health.

Having female board directors can boost firm value and returns on investments. According to Rock Health, firms with at least three female directors receive a 14 percent return on stock, while firms with fewer than three female directors receive a 9 percent return on stock. Firms with at least three female directors also receive an 8 percent return on investment compared to 5 percent of firms with fewer than three female directors.

Interestingly, the Rock Health report indicates venture capital firms with women partners are two times more likely to invest in companies with a woman on the management team and are three times more likely to invest in companies with a woman CEO.

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