What number of startups with feminine founders are getting funding?
I usually point out that I’ve invested in 100 startups. A reader (thanks Lily York) just lately challenged me — what number of of these investments have been in startups with feminine founders?
That’s an necessary query, and I didn’t have a prepared reply. So I went again and compiled the info. Which answered just a few questions, however raised necessary new ones.
The Investments
Since I began angel investing in 2010, I’ve made 50 investments in 37 startups. (I invested in a number of rounds of some startups.)
As well as, I’ve been a part of 5 angel group funds that pooled our cash to spend money on 10–25 startups every, bringing the full to properly over 100 startups.
Nonetheless, for my evaluation of feminine founders in my portfolio, I solely seemed on the 37 startups I invested in immediately. I made these selections alone. And since I do know these founders personally, it was simpler to compile the info.
Of my 37 investments, right here’s what number of had feminine founders:
Feminine-only founders: 16.2percentFemale CEO: 24.3percentFemale co-founder: 29.7%
Not unhealthy, not nice.
Digging into the info, I discovered one thing attention-grabbing. My first spherical of angel investing ran from 2010 to 2013. Then I ended investing till 2018 once I exited my very own startup and had extra money and time to take a position once more.
Evaluating the 2 units of investments, the later cohort had considerably extra feminine founders.
Of the 27 investments from 2018, right here’s what number of had feminine founders:
Feminine-only founders: 22.2percentFemale CEO: 25.9percentFemale co-founder: 37.0%
Slicing the info additional, of the 17 investments made since 2020:
Feminine-only founders: 23.5percentFemale CEO: 29.4percentFemale co-founder: 41.2%
With this small dataset, it’s inconceivable to say whether or not the rise in feminine founders between 2018 and 2020 is an actual pattern or simply noise within the information. However I’m assured the rise between 2010–2013 and 2018–2023 is greater than a statistical fluke.
However how does that evaluate to the remainder of the enterprise ecosystem?
Pitchbook Knowledge
I had little expectation that my investments in feminine founders was uncommon. I don’t make investments particularly in feminine founders. I search for the perfect startups I can discover no matter gender.
Additional, my funding focus is hardtech, particularly chemical and materials advances for power sustainability, fields which have traditionally been male-dominated.
With all of the packages to assist feminine founders and funds centered on investing in women-led startups, I anticipated my very own ratios to be on the low facet. So I used to be shocked when I discovered the newest PitchBook information.
PitchBook studies that in 2022, women-only founders acquired solely 2.1% of complete enterprise capital funding.
This headline quantity is pitiful. Nevertheless it wants some digging into.
First, whereas solely 2.1% of enterprise capital {dollars} went to startups with women-only founders, startups with blended female and male co-founders accounted for 18.5% of funding. Put them collectively and 20.6% of enterprise {dollars} went into startups with no less than one feminine co-founder.
Second, when it comes to {dollars} invested, the overwhelming majority goes into later-stage startups that may hardly be known as startups any longer. A $2B strategic buy of fairness in Epic Video games by Sony and Lego, or Elon’s buddies throwing just a few additional billion into SpaceX is a special world from angels investing $500K in a recent startup.
To match apples to apples, I’d prefer to see information on funding in pre-seed/seed spherical, however I’m too low cost to pay for granular entry to the Pitchbook information. At the very least deal depend slightly than {dollars} invested avoids the few huge late-stage investments overwhelming the remainder of the info.
By deal depend as a substitute of {dollars}, the information is healthier, although not so good as it ought to be.
6.8% of startups receiving enterprise funding in 2022 had female-only founders19.6% had blended feminine and male co-founders
In complete, 26.4% of startups that acquired enterprise funding in 2022 had no less than one feminine founder.
Whereas nonetheless unsatisfactory, no less than that is practically double from 13.4% in 2010 once I began angel investing. And I assumed not removed from my very own investments at 41% if we seemed solely at pre-seed/seed stage offers. (Although that does open the important query of why the ratio of feminine founders decreases with deal stage.)
However then I seemed on the ratios for Y-Combinator’s most up-to-date cohort. I anticipated the founders of their program to be near 50/50. As an alternative, solely 15% of the startups within the cohort had a lady founder. Solely 9% of the founders have been feminine. Hmm. The scenario is worse than I believed.
We could also be making progress, however we’ve nonetheless acquired an extended, lengthy solution to go.
