What Digital Health Lacks: Female CEOs

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Leah Sparks, CEO of Wildflower Health at a women in health retreat.  (Rock Health)

Health care is undergoing major technological changes, from an explosion of consumer tools used to access medical information to advancements in genetics.

But in the booming health-tech economy, just like in the health care industry at large, this transformation is primarily being led by men.

Just 6 percent of digital health startups that have raised at least $2 million in capital in the past four years are led by women. That's according to data compiled by early-stage venture fund Rock Health for a report released on Monday.

Digital health sits at the intersection between new technologies, health care and medicine. In Silicon Valley, investors are increasingly opening their checkbooks to startups that are attempting to disrupt the health care system, not unlike how the Internet changed banking and commerce.

But relatively few women are gaining funding for their startup ideas. And the percentage hasn't improved much in recent years, despite the swell of media attention on the topic and the explosion of women-in-tech networking groups.


Some investors say it's simply more difficult to fund women in health-technology, as the pool is still so small.

"There are too few female founders who are taking the risk in starting a company, especially for moms that need to support a family," said Missy Krasner, a former digital health investor at Canvas Venture Fund.

Kranser said she actively sought out female founders to meet and potentially fund but "there were just not a lot."

For those who do take the plunge, female mentors and role models in health care are hard to come by, said Rock Health's Teresa Wang, author of the report.

Making matters worse, some female entrepreneurs in Rock Health's network have experienced a gender-based bias when pitching venture capitalists.

Dozens of venture firms in Silicon Valley do not have a single female partner in their ranks (a few notable exceptions who invest in digital health: Rebecca Lynn at Canvas Venture Fund and Beth Seidenberg at Kleiner Perkins Caufield Byers).

Others say this lack of investment in female founders is the key problem -- and not the lack of desire among women to start companies.

6 female-led digital health startups to watch
6 female-led digital health startups to watch

"The problem here is clearly not expertise or interest from female CEOs," said Kyra Davis, a program manager for the Entrepreneurship Center at UCSF. Davis said many of the female founders she knows have faced challenges raising money.

"In one case, I've seen a female entrepreneur bring on a male mentor to act as a chairman and lead the early fundraising efforts entirely. The strategy was effective, but obviously does not address the larger problem."

The Big Picture

Across the board in health care,  women represent only 21 percent of executives and 21 percent of board members at Fortune 500 companies, according to information compiled by Rock Health.

There's only one female CEO at a Fortune 500 health care company, the report found.

Similarly, hospitals lack diversity in their senior management. Women make up 27 percent of hospital boards, and 34 percent of leadership teams, according to data from Thomson Reuters Top 100 Hospitals.

And yet, women are the target demographic for a growing number of health care companies. Women are the health care decision makers for their families about 80 percent of the time, according to the U.S. Department of Labor.

So why haven't women shot through the ranks? The problems are systemic and often cultural.

Of the 400 women surveyed for the report, 96 percent said that gender discrimination still exists, and almost 50 percent described their gender as a professional hurdle.

But the report concluded its findings by providing some recommendations for both men and women, who want to change the ratio.

One key solution involves rethinking the hiring process to include more female leaders, Wang said. Gender balance is fair, but is also good for business, numerous recent studies have found.

Rock Health and other organizations are also working to improve access to female mentorship. Wang suggests that experienced women in health and technology should try to take 15 or 20 minutes of their time, occasionally, to advise a more junior female entrepreneurs.

"Mentorship and support would go a long way," said Wang.