If you thought the glass ceiling was bad in the corporate world, take a look at the venture-capital community. As women have made gains...

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NEW YORK — If you thought the glass ceiling was bad in the corporate world, take a look at the venture-capital community.

As women have made gains in the executive suite, those who dreamed of making venture investing their career have found more headwinds. A study conducted last year found that in 1995 there were 346 “professional women” — partners, principals and associates — comprising about 10 percent of the venture-capital industry. By 2000, while that number had risen in absolute terms — to 510 — it fell as a percentage, to 9 percent.

The study also found that 64 percent of female venture capitalists in 1995 were no longer in the industry by 2000, almost double the turnover rate for men. The study was conducted by The Diana Project, which is associated with the Kauffman Foundation, a group that fosters entrepreneurship.

The small number of female investors “says to me that the industry is not necessarily gender neutral, which isn’t to say that it’s outright discriminatory,” says Davia Temin, president of the strategic-marketing firm Temin, whose clients include VC firms.

Observers explain the persistence of the gender gap as being in some ways a result of the structure of the VC industry, often described as a clubby old boys’ network. But they say it’s only a matter of time before that gap starts to narrow, given the advantages of a more diverse environment.

Aside from confronting the stereotypes about home and family that have dogged women in other industries, females face additional challenges in the venture-capital industry, insiders say. For instance, many VC professionals come with advanced degrees in fields like electrical engineering, where women are underrepresented. And it’s an industry in which the best jobs continue to be found through business contacts.

Also a factor is the typically tiny size of the average firm, which likely discourages institutional efforts to address the gender gap. According to the National Venture Capital Association, the average VC firm employed roughly 10 professionals in 2004. Temin says that at large investment banks, another traditionally clubby industry in which women have made some progress of late, there was “some conscious effort by the industry” to hire more women. But for small, low-profile venture-capital firms, “it’s much harder for them to make an institutional effort,” she says.

In such a work environment, “How people get along is really the critical issue,” says Karen Kerr, a former managing director with Arch Venture Partners who left this year and plans to raise an independent VC fund. “I don’t think people are necessarily interested in balancing out gender inequalities or ethnic inequalities.”

Some people are, though. The Kauffman Foundation’s Fellows program — a high-profile road to a partnership at a major venture-capital firm — says that including women and minorities “is a very explicit goal.”

In 10 years, 23 percent of the program’s 111 fellows have been women. The program places professionals from fields like business, the physical sciences and medicine in two-year salaried positions at VC firms, which frequently lead to jobs.

The fellowship’s head, Patrick Von Bargen, thinks it is only a matter of time before the industry becomes a more level playing field. “Venture capital will benefit from a broader representation of culture and life experiences,” he says.

Lisa Tatum, a general partner with early-stage health-care investor Cardinal Partners, says that because investors prefer deals stemming from their own networks, women, who have different contacts, can find strong companies unnoticed by their male counterparts. They might, for instance, look to companies headed by female entrepreneurs, which raised less than 4 percent of total VC funding in 2004.

Tatum said she has seen a growing number of women succeed since she joined Cardinal as a Kauffman fellow in 1998.

“This whole industry is never going to have a horde of people running into it from anywhere,” she says, but she thinks more women will enter. “It’s one of the great professions for women because it is a meritocracy,” she says.