Female CEOs An Investing Segment?

By divisionprima

Snapshot:

  • Companies led by women outperform the broader markets by an average of 104%.
  • Companies with a female founder performed 63% better than our investments with all-male founding teams.
  • Investment apps are adding this as a segment to their platforms.

Robinhood, the free stock trading app, recently released its web platform, before it was just available on Android or iPhone. If this is your first time hearing about Robinhood we suggest your check them out after you finish reading this. Part of their release was offering new tools for investors to help make better decisions. For example you can browse for new stocks by sectors such as, “Gas and Oil”, “Entertainment”, and “Female CEOs”. Hold on, “Female CEOs” is an investing sector?

Let us ask the question, “Why did they do this?” There are different perspectives most people would say that statistics say that having more women on Boards leads to healthier companies so does having a female CEO follow the same logic. Of course there are the trolls on the internet who say this is a segment so you know to stay clear because females are less capable than men. We are going to assume that this sector was created for the former that, statistics show the female run companies have historically shows strong performance.

Female Run Companies Have Strong Performance

  • Companies led by women outperform the broader markets by an average of 104%. Women CEOs in the Fortune1000 drive 3x the returns as S&P 500 run predominately by men.  Fortune article here.
  • There are statistics supporting female CEO increse stock which leads to algorithm developments to invest in a buy and hold strategy for stock. Fortune article here.
  • People cite Marissa Mayers as a failure but let’s be realistic she was asked to walk the plank. That “failure” also resulted in and increase in value 224%. Fortune article here.
  • Companies with a female founder performed 63% better than our investments with all-male founding teams. Data here at FirstRound.
  • VC firms that invest in WLBs (Women-led Business) has an improvement in firm’s performance. SBA data here.

Now we are not saying any of this to completely conclusive. We still need more data and more time to figure out why some of these statistics are true or why they are showing. For now it is a way to get a conversation started.

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