As a female founder and a woman in tech, I am constantly encouraging females, to explore, starting their own company. When I started mine had no idea of the quite startling statistics surrounding female founders of startups. Probably a good thing, as it would have been quite discouraging.
· Only 5% of solo founders are women
· Only 15.8% of funded companies have at least one female founder
· From 2012 to 2017 female founder numbers have plateaued at no more than a 17% high
In 2016 Venture Capitalists invested 58.2 billion dollars in all male founder companies, while women founded ventures only received 1.46 billion in funding, this is according to PitchBook a VC database.
I spoke to Aaron Vick, Partner at Pearlbend Ventures, who sees a slight shift towards encouraging and funding female founders, especially in the last three years. Whether through the influence of millennials, who see gender as less of a differential than previous generations, or through the fact that women are entering the fields of science and tech in slightly higher numbers. He thinks there is a chance that venture capitalists can and should close the funding gap. Women still tend to gain most funding in the areas of Education, E-commerce, healthcare, and media, which all could still be considered “female” friendly arenas. Aaron also discussed the emerging trend of profit with purpose, which his company believes in and we see more and more companies, especially female founded ones engaging in. As the Father of a brilliant, science loving 9-year-old daughter Ava, Aaron hopes she and all females are given equal opportunity to funds, now and in future generations.
As a female founder digging deeper into the funding process, I was shocked to see that female founded companies have only 8% of late stage round funding, so I asked Mike Scanlin VC at Mistral Venture Partners to give us some tips on securing funding.
1. Assemble the best team possible as VC’s look for strongest teams.
2. Use experienced people on your team, who have proven results.
3. Have traction in your company, in revenue, users or memberships.
4. Have an exit strategy that makes sense.
5. Pitch without emotion, passion is great but VC’s love facts.
At the end of the day, even though only a low percentage of companies funded have female founders, there is no reason that with a great idea, a strong business plan, and a company with profit potential, females can’t get funding. At the end of the day Mike says, “A venture capitalists job is to make the Limited Partners money” and if your company can do this, male or female it has a good chance of receiving funds.
Valery Komissarova principal at Grishin Robotics who as a female founder and one of only 7% of female VC probably said it best- “as a female founder your focus should be on being so good, no one could say no to you”.
In a male dominated world of funding, maybe that is indeed the answer, as a woman or man, the best ideas and businesses should be the ones who are funded, we as women need to work hard, believe in our idea and company, and pursue funding with confidence and belief in ourselves and our goals. I am convinced that as women we already have 50% of the great business ideas, we just need to dream big enough to make them reality, and grow our companies to the point of needing funding.