Female Founders and Investors: Progress and Trends
By nature, innovation does not discriminate. However, the representation of females in startups and venture capital is extremely low. There is still a long way to go for gender equality in the startup ecosystem. At SkyDeck we are committed to leveraging the positive trends that support female founders in reaching their full potential. According to Crunchbase, the number of startups with at least one female founder has more than quadrupled from 117 in 2009 to 555 in 2014. Today, 18% of startups have at least one female founder. Women also perform equal to or better than men when raising money on crowd funding platforms. Despite these realities, only 10% of startups that raise a Series A have a female founder. Why? There are a multitude of reasons. We do know that 94% of decision makers at VC firms are male, and only 38% of the top 100 VC firms have even one female partner. Furthermore, only 12% of 54 active corporate venture firms and accelerators have female partners.
We also know that startups with a woman on the executive team receive a 64% higher Series A round than the average Series A Round. Precedent has suggested that successful, high-value startups place a greater importance on diversity. An extrapolation of this statistic is that VCs may be overlooking many startups from underrepresented group. Those that focus on diversity can likely capitalize on undervalued ventures.
Another trend indicates that growth in the number of female owned businesses (up 68%) is double the growth rate of businesses owned by men. 48% of female founders claim that there is a dearth of available mentors. This year, Pitchbook ranked Berkeley as the Number 2 university in VC-backed female entrepreneurs. At UC Berkeley, the resources at all tiers of the innovation ecosystem support an initiative to broaden the tools available for startup founders, indirectly creating a greater span of support for founders of all backgrounds. The UC Newsroom recently quoted SkyDeck Executive Director Caroline Winnett, along with SkyAlums Picosense and Build & Imagine, for their startups’ successes under the leadership of female founders and CEOs.
In Angel investing, women are seeing stronger representation. In 2014, 24% of angels were women, up 43% from the previous year, and 36% of companies seeking angel funding were led by female founders, up 83% from the previous year. Of the companies that received funding, women led 28% of them.
Despite the lack of female representation in venture capital and the startup landscape, women are seeing stronger growth rates in each sector than are men. Over the past 10 years, male angels have grown in number by 13%, but female angels have grown in number by 318%. While male entrepreneurs increased by 25%, female entrepreneurs increased by 635% The trends are headed in the right direction.
According to reports from JPMorgan Chase and ICIC, women and minorities are underrepresented in accelerators because of the lack of outreach and recruitment efforts. SkyDeck is not alone in our efforts to address this. Accelerators like Techstars are also looking to double the number of women applicants in the next four years.
At SkyDeck, we host a bi-annual Female Founder’s Roundtable. The event is an open forum for prominent female founders and investors to share stories of their experiences and offer advice. The atmosphere allows women to comfortably and candidly discuss their careers and it encourages networking to promote the universal mission for an equal representation of women and men in entrepreneurship.