The most exclusive boys’ club: America’s largest startups by Erica Swallow @FortuneMagazine March 16, 2015, 9:12 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons It’s no secret that the Fortune 500 is led mostly by men. Only 25 Fortune 500 companies have a woman as CEO, and 23 had all-male corporate boards when Fortune conducted an analysis earlier this year. But according to a new analysis by Fortune, America’s largest and most powerful private companies might be the most exclusive boys’ club of all. Just 6.2% of board seats are held by women within U.S.-based “unicorn” companies, that rare breed of private firms whose value is more than $1 billion, based on fundraising. America’s 55 unicorn companies collectively represent 354 board director seats, the Fortune analysis shows, and only 22 are held by women. A full 60% — or 33 — of the U.S. unicorn companies have all-male boards, as compared with nearly 5% of Fortune 500 companies. The startups with all-male boards include some of the most celebrated brands, such as Uber, Snapchat, Tinder and Airbnb. These are the wildly influential innovators that the rest of the startup world strives to emulate. None of the 55 companies have more than one woman on their board. Some research suggests that boards need at least three women in order to achieve the effective critical mass that leads to improved performance and governance. These statistics are based on publicly-available documents and information that the unicorn companies provided to Fortune. Because these companies are private, they are not required to disclose this information. As a result, unicorn companies often escape the scrutiny that public companies face, despite the fact that they are larger, more valuable and powerful than many public companies. With the exception of Magic Leap, a secretive augmented reality firm, all of the U.S.-based unicorns provided Fortune with their list of directors. Magic Leap, however, did identify two recently-appointed directors and two observers (non-voting attendees) in an October 2014 press release touting its $542 million in series B financing. All four are male, as is President and CEO Rony Abovitz, who also serves on the board. Magic Leap — which declined to comment — is included in the Fortune analysis of the 55 U.S.-based companies, based on the available public information. Only about half of the 26 internationally-based Unicorns would disclose board make-ups so Fortune excluded these Unicorns from this analysis. Fortune reached out to all 33 U.S.-based unicorns that have all-male boards. Only eight – JustFab, Lookout, Pluralsight, Razer, Slack, Snapchat, Pinterest and Legendary Entertainment – offered comments. Most stressed their commitment to diversity, but noted that early-stage startup boards tend to be composed of founders and investors — who were men. “It just so happens that the people who wanted to invest in JustFab were men,” Adam Goldenberg, JustFab’s co-CEO, said in a statement. In fact, the vast majority of venture capitalists – more than 95 percent – are male, as of Fortune’s most recent analysis. A few of the companies also told Fortune that they were actively looking to bring on women as board members. “Pluralsight wholeheartedly supports the need for more women in the tech industry,” company spokesperson Megan Herrick said in an emailed statement. The company currently has some empty board seats, and “we are actively looking at some extraordinary female candidates.” Fortune’s research also found: Instacart, LivingSocial, and Pure Storage each have one non-voting board observer who is a woman. The majority of unicorns did not disclose information about board observers to Fortune. Of the 81 unicorns counted by Fortune (55 U.S. companies and 26 internationals), four companies — Good Technology, Houzz, Sunrun, and Theranos – have a woman as CEO. The CEOs are the only women on their company boards. Why doesn’t having a female CEO lead to more women on boards? In large part, for the same reasons, that the male-led unicorns don’t: boards are made up of investors. But Adi Tatarko, founder/CEO of Houzz and the only woman on her four-person board, also stressed in an interview that the selection process is gender blind. Board members, she said, were selected by her and fellow teammates based on “who was the best fit for Houzz, not their gender, and because of that, we have an amazing group behind us.” Tatarko also noted that it isn’t just the diversity of the leadership team that matters but the makeup of the entire staff. “Female representation on boards matters, but the most important thing is to select people who have diversified backgrounds and expertise that can contribute to the company,” she says. “While I’m the only female on the board, our company is over 50% female, and we are fortunate to have a wonderful and balanced environment that everyone is happy to be a part of.” Still, many venture capitalists and chief executives say they want to see more women on boards — but that it’s very hard to make happen. Venture capitalist Jeff Bussgang, general partner at Flybridge Capital Partners, says he believes strongly that having gender diversity at the top leads to better business decisions. But Bussgang serves on the boards of 11 companies in which his firm has invested, and only 2 of those 80 total board seats are held by women. “I find this figure embarrassing,” he says, noting that he is in the midst of a board search for an independent director and is insisting – against what he described as pushback from other board members – that at least half the candidates under consideration be women. (Disclosure: Bussgang teaches a Harvard Business School course called “Launching Technology Ventures,” in which this reporter is a student.) “Over half the brains on this planet reside in women and by not having them represented on your team, you’re missing out on over half the planet’s talent,” he says. “Plus, diverse opinions around the table enhance the quality of any discussion and lead to better decisions.” Even venture capitalist Sonja Hoel Perkins, managing director of Menlo Ventures and founder of all-female angel investment group Broadway Angels, didn’t criticize unicorns for not having more women on their boards. She said it’s tough to recruit outside one’s often-homogenous network; VCs and unicorn CEOs alike tend to tap those who have had success before – which tends to draw from the same pool of male candidates. Perkins has served on more than 50 boards. While she hopes her and other women’s presence on boards might encourage other entrepreneurs to bring on more women, she also said that it might be time for the U.S. to follow Europe’s example and adopt a quota for female board directors, at least for public companies. Recently, Germany became the latest European country to adopt a quota. Perkins said she knows that such a law would be a hard sell in the United States. “Nobody likes government regulation, including me, but if it’s not happening naturally, I don’t think it’d hurt to try,” she says. It wasn’t until Twitter and Facebook filed their IPOs that it became widely known that their boards were all male. Both companies received fierce criticism, and after going public, both named women. Twitter now has one woman on its board; Facebook has two. Here is the list of the 33 Unicorn companies with no female directors, along with the companies’ comments. 1. Actifio The company declined to comment. 2. Airbnb The company didn’t respond to requests for comment. 3. AppDynamics The company didn’t respond to requests for comment. 4. Automattic The company didn’t respond to requests for comment. 5. Bloom Energy The company didn’t respond to requests for comment. 6. Credit Karma The company didn’t respond to requests for comment. 7. Deem The company didn’t respond to requests for comment. 8. Evernote The company didn’t respond to requests for comment. 9. Fanatics The company didn’t respond to requests for comment. 10. InMobi The company didn’t respond to requests for comment. 11. Instacart The company didn’t respond to requests for comment. 12. Jasper Technologies The company declined to comment. 13. JustFab JustFab co-CEO Adam Goldenberg told Fortune, “Our board is compiled of Don [Ressler, also co-CEO] and myself and a team of strong individuals who invested a significant amount of money into our business, because they were interested in helping us grow – it just so happens that the people who wanted to invest in JustFab were men. With that said, our executive team is an amazing group of people, both men and women, who help run our business day to day – not because they are a man or woman, but because they are great at what they do.” 14. Legendary Entertainment A spokeswoman said, “Legendary’s BOD composite is mainly comprised of men who are representative of investors or business partners, but the company is actively recruiting at least one female Board member and has acquired female owned companies as well as recently made some C-Suite female hires.” 15. Lookout “Board composition bears careful thought at every stage of a company. Today, we have eight board members comprised of the CEO, two founders, one independent director and four Venture Capital representatives that have led investments in Lookout. These investors assign board members to vigorously represent their interests. That said, diversity is important to Lookout. As our fast-paced business transitions through each new stage of growth, we will continue to develop not just the board’s but the entire Lookout team’s composition, structure and mix of skills appropriately,” Lookout CEO Jim Dolce said. 16. Magic Leap The company declined to comment. 17. MediaMath The company didn’t respond to requests for comment. 18. Moderna Therapeutics The company didn’t respond to requests for comment. 19. MongoDB The company declined to comment. 20. Nutanix The company didn’t respond to requests for comment. 21. Palantir The company didn’t respond to requests for comment. 22. Pinterest “We value diversity and believe it will help us achieve our mission as a company. While we still have a long way to go, we’re proud of the fact that we have some of the highest percentages of women in technical roles in the industry and that our finance, recruiting and sales teams are all led by women,” a company spokesperson said. 23. Pluralsight “Pluralsight wholeheartedly supports the need for more women in the tech industry. In fact, our company currently has some empty board seats and we are actively looking at some extraordinary female candidates,” company spokesperson Megan Herrick said. 24. Pure Storage The company didn’t respond to requests for comment. 25. Qualtrics The company didn’t respond to requests for comment. 26. Razer A spokesperson said, “We believe building a diverse and inclusive board is integral to the long term success of Razer. We currently have three board members and we plan to select and appoint new directors with requisite experience to our board in the near term.” 27. Slack Slack CEO Stewart Butterfield said, “Aside from me (as CEO), our current board is made up of representatives of the three firms which invested in us early in the company’s life. In each case, the firms are represented by the partner who made the investment. We have not yet brought in any independent board members. We believe in both the superior decision-making abilities of diverse groups of people and also that we have a responsibility to make a positive difference in addressing both our own and the industry’s larger problems of imbalance and underrepresentation. In the case of our existing board members, it is not possible to give the seat over to some other designate in place of our investors’ representatives: that’s simply not how it works. But as the company reaches new stages of maturity, the board will grow and the beliefs noted above will help inform decisions about who we add in the future.” 28. Snapchat “Women are well represented on the executive team (and across other functions of the company),” said Jill Hazelbaker, Vice President, Communications and Public Policy. 29. Stripe The company didn’t respond to requests for comment. 30. Tango The company declined to comment. 31. Tinder The company didn’t respond to requests for comment. 32. Uber The company didn’t respond to requests for comment. 33. WeWork The company didn’t respond to requests for comment. Erica Swallow is a technology writer, startup entrepreneur, and status quo wrecker. She is currently an MBA candidate at the MIT Sloan School of Management and her thoughts have been published in Forbes, Entrepreneur, The Wall Street Journal, and The Huffington Post, among others.