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Vast Majority of Paper Millionaires in Silicon Valley Are Men

Candy Cheng

(Bloomberg) -- With companies like Uber Technologies, Inc., Slack Technologies Inc., and Pinterest Inc. going public this year, the question has been: How many millionaires will Silicon Valley mint? What’s not being asked is how much of that new wealth will go to women. 

The answer, according to a new study released Monday, is: not much. Carta, an equity management platform, crunched data from over 300,000 employees at more than 10,000 companies, and found four out of five paper millionaires are men.

The jobs that land the biggest equity packages tend to be held by men in C-suite roles, said Emily Kramer, Carta’s vice president of marketing. “As wealth goes up, the percentage of millionaires who are women go down because they are not CEOs, CFOs or founders,” she said. Chief marketing officers, the most common executive role held by women, have the lowest median equity award, 39% less than that of CFOs, which tend to get the most generous packages after CEOs.

Among the world’s 500 richest people, there are just two female technology billionaires, according to the Bloomberg Billionaires Index. MacKenzie Bezos, a major shareholder of Amazon.com Inc., is worth $36 billion and Zhou Qunfei, the founder of Lens Technology, is worth $5.9 billion. Sheryl Sandberg, the chief operating office of Facebook, who is not in the top 500, has a net worth of $2.1 billion.

Carta last year for the first time identified an “equity gap,” finding women in Silicon Valley held 47 cents for every dollar of equity men did. Carta this year found a slight improvement: Women hold 49 cents for every dollar in stock options men do, a 2% increase from last year. Women make up more than a third of all employees, but only hold 20% of equity wealth, the study finds. 

While most equity ends up being worth nothing, when a startup goes public or gets acquired, stock grants can result in a big payday, creating the next class of angel investors and entrepreneurs. And even with underwhelming valuations from tech companies this year, underrepresented employees are getting the “short end of the stick” and become “collateral damage,” said Henry Ward, the chief executive of Carta.

The gender equity gap exists for a variety of interconnected reasons. Early employees often get better stock options than those who join later, and younger companies tend to have smaller proportions of women. There’s also a lack of representation on founding teams. Women only make up 13% of all founders in the data pulled by Carta, and female-founded teams only got 2.2 percent of venture funding last year. 

Women also say they don’t know what to ask for during already opaque salary negotiations. One woman who worked for a unicorn startup, who asked not to be identified to avoid alienating her former employer, said she didn’t know to ask for refresh grants after getting promoted several times. When the company went public, she ended up getting $20,000 (before taxes); she calculates she could’ve been a millionaire.

As WeWork prepared to go public, Trista Kempa, who says she was the 17th employee, said she wasn’t offered options at all. “I was 23, naive, and didn’t know what equity or options were—I certainly didn’t know how much it could impact my financial future,” she tweeted. WeWork did not immediately respond to request for comment. 

Carta offers educational materials that teach women how to negotiate their liquidity preferences and ask for fair equity offer up front. “It’s not a matter of getting in the door,” said Carta’s Kramer, who is also head of Table Stakes, an initiative highlighting the gender gap in equity at venture-backed companies. “It’s about advising employees on how to avoid a WeWork situation.”

To contact the author of this story: Candy Cheng in San Francisco at ccheng86@bloomberg.net

To contact the editor responsible for this story: Rebecca Greenfield at rgreenfield@bloomberg.net, Mark Milian

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